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2019 (11) TMI 1503 - AT - CustomsValuation - leftover ATF available in the fuel tank of aircraft landing in India from an international trip - inclusion of freight element on notional basis to arrive at the value of such ATF - HELD THAT:- The aircraft requires ATF for its propulsion. As per the Civil Aviation Regulation requirements and also for safety, aircraft caries adequate amount of fuel in its flight. The consumption of fuel depends on various factors. Factually when the aircraft completes the inward journey to reach the Indian Airport, certain quantity of fuel is left in the tanks - We are not in agreement that there should be a freight element attributable to such fuel in the tank. In other words, the aircraft did not transport the fuel as a cargo or goods for the purpose of freight. Such interpretation will be a result of hyper-technical approach to the facts of the case. Admittedly, the remanant fuel is construed to be an imported item for the purpose of Customs duty. In the importation of such remanant fuel, we could not discern any separate freight element, which can be added in the assessable value. The fuel in the tank is part of aircraft in operation. Fuel cost is calculated, and apparently, forms part of commercial consideration while fixing ticket charges for transporting aircraft. No freight element is attributable to fuel in the tank, the usage of which varies on different parameters. The aircraft did not transport ATF on which a freight element can be attributed. The plain meaning “Freight” is goods that are transported by ships, planes, trains or lorries/trucks; the system of transporting goods in this way (OXFORD Advanced Learners Dictionary 7th ed. - on this basis it cannot be said that fuel in the tank of aircraft used for propulsion can be considered as cargo/goods with attributable cost of freight. Further, Rule 10(2) was applied by the lower authority on the ground that the freight of ATF is not ascertainable. Dealing with addition of loading and handing charges at 1% on notional basis as per Rule 9 of Valuation Rules, the Apex Court in the case of WIPRO LTD. VERSUS ASSISTANT COLLECTOR OF CUSTOMS & OTHERS [2015 (4) TMI 643 - SUPREME COURT] held that when the actual costs towards handling charges are available, notional addition is not legally tenable. It was held to be violative of Article 14 of the Constitution - In the present case, there is no freight involved with reference to leftover fuel in the tank of an operating aircraft. Hence, there is no question of such freight being “not ascertainable” and hence addition of 20% notional freight - there is no freight element involved and hence, there is no application for Rule 10(2). Appeal dismissed - decided against Revenue.
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