TMI Blog2004 (12) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... 003 C/176/2003 Indian Airlines v. CC, Bangalore 129/2003 25-3-2003 C/97/2003 Indian Airlines v. CC, Bangalore 33/2003 29-1-2003 2. M/s. Indian Airlines normally function as Domestic Airlines. However, they have also International Flights. When the Aircraft returns to an airport in India and its international run is terminated, the Revenue demands Customs Duty on the fuel (ATF) remaining in the aircraft. The appellants challenge the levy of Customs Duty on the ATF onboard the aircraft. Alternatively, they claim exemption for ATF vide Notification No. 151/94, dated 13-7-1994 and similar Notification claiming that ATF is same as Superior Kerosene. In the impugned Orders-in-Appeal, the demand of duty in the original orders have been confirmed. Further, exemption to ATF has also been denied. 3. S/Shri A.N. Jayaram, learned Senior Advocate, Manoj Arora, learned Advocate and Sanjay Gupta, learned Advocate appeared for the appellants and Shri L. Narasimha Murthy, learned SDR appeared for the respondents. 4. The main thrust of the argument of Shri A.N. Jayaram, the learned Sr. Advocate is that Customs Duty is chargeable only on goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms import and export . He urged that the ratio of this decision has been followed by the Supreme Court in the case of Madras Marine and Co. v. State of Madras [1992 (61) E.L.T. 161 (S.C.) = (1986) 3 Supreme Court Cases 552]. Further, the learned Counsel took us through the judgment of the Hon ble Supreme Court reported in AIR 1958 Supreme Court 341 (V 45 C 55) wherein the Court has quoted Chief Justice Marshal s interpretation of the word importation in Para 23 of the judgment which is given below : Chief Justice Marshall dealing with the word importation said in Brown v. State of Maryland (1827) 12 Wheat 419 at p. 442 4 Law Ed. 678: (at p. 686)(O) : The practice of most commercial nations conforms to this idea. Duties, according to that practice, are charged on those articles only which are intended for sale or consumption in the country. Thus sea-stores, goods imported and re-exported in the same vessel, goods landed and carried over land for the purpose of being re-exported from some other port, goods forced in by stress of weather and landed, but not for sale are exempted from the payment of duties. The whole course of legislation on the subject shows that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined, it is not proper to take the meaning assigned to them in the context of interpreting other enactments relating to Sales Tax, etc. As per the Customs Act, 1962, any goods which are brought into India from a place outside India would be imported goods excluding the goods which have been cleared for home consumption. For any import to take place, there is no need for sale as contended by the learned Counsel for the appellants. This is clear from the definition of the importer in the Customs Act. In the Customs Act, importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes any owner or any person holding himself out to be the importer. In the case under reference, M/s. Indian Airlines brought ATF in their aircraft to India. Hence, import has taken place. Since they are the owners of the ATF in the aircraft, the appellants are the importers. As the ATF is going to be consumed in India, they are liable to pay duty as only the foreign going vessels or aircraft can consume onboard imported stores without payment of duty as per Section 87 of the Customs Act, 1962. The learned SDR further brought to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r nor an importer. Under these circumstances, the transaction cannot be called as export as understood in International Commerce. In fact, the Supreme Court held that inasmuch as ATF was sold to the Airlines in India, the same is liable for sales tax irrespective of the fact that the ATF is taken onboard the aircraft to a place outside India as this action does not amount to export. In the above case, the Supreme Court was actually interpreting the meaning of export in the context of sales tax. The same interpretation cannot be given to the word in the context of the Customs Act. When the appellants maintained that they were getting drawback on the ATF supply from the Customs, to buttress their point that the transaction amounts to export the Supreme Court observed that the word export may conceivably used in more senses than one and the Customs barrier is a barrier for customs purposes and duty drawback may be admissible if the goods once imported are taken out of the country. The Customs Duty drawback has nothing to do with the sale of aviation spirits, which takes place in West Bengal. Moreover as far as sales tax is concerned, the taxable event is sale. Since the ATF was sold i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a foreign-going vessel or aircraft. 14. From Section 87, it is very clear that the ATF in the fuel tank on-board the aircraft should be considered only as imported stores and the same is exempted from duty only when the aircraft is foreign going. It is also a common practice that whenever a foreign going vessel turns to coastal run the Customs department recovers duty on the stores consumed during the coastal run. The department has devised an elaborate procedure for collection of duty on ship stores consumed during coastal run in CBEC Circular 58/97-Cus., dated 6-11-1997. The CESTAT, Bangalore in the case of Surrendra Overseas Ltd. v. CC, Hyderabad - 2004 (168) E.L.T. 492 (Tri. - Bang.) has held that duty is demandable when foreign going vessels are reverted to coastal vessels and after operating as coastal vessels for sufficient time and again reversed back as foreign going vessels. In the Kerala High Court judgment referred to by the learned Counsel for the appellants, goods were originally destined for Cochin. Before reaching Cochin, the vessel touched Bombay and during that time an exemption notification was available for the said goods however, by the time the vessel reac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
