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2017 (9) TMI 926 - CESTAT NEW DELHIValuation - leftover ATF available in the fuel tank of aircraft landing in India from an international trip - includibility - notional freight charges - Rule 10(2) of Customs Valuation Rules - Held that: - 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 remnant fuel is construed to be an imported item for the purpose of customs duty. In the importation of such remnant 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. Rule 10(2) was applied by the lower authority on the ground that the freight of ATF is not ascertainable - there is no freight element involved and hence, there is no application for Rule 10 (2). There is no freight involved with reference to left over fuel in the tank of an operating aircraft. Hence, there is no question such freight being “not ascertainable” and hence addition of 20% notional freight. Penalty u/s 112 - Held that: - The procedure followed by the appellant and regularly intimated to the Department has not been varied by the Revenue. No loss of revenue has been alleged except for non-addition of notional fright in the value of ATF. As such notional additional is not legally sustainable. In view of these observations, there is no sustainable reason for imposing penalty on the appellant under Section 112. Appeal allowed - decided in favor of appellant.
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