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2023 (4) TMI 514 - HC - CustomsExemption from duty - import of helicopters - Actual user condition - To be used for non-scheduled air transport (passenger) service - Compliance of Condition No.104 of the Exemption Notification No.21/202-Cus dated 01.03.2002 as amended by Notification No.61/07-Cus dated 03.05.2007 - Confiscation alongwith interest and penalty - whether the respondent had violated the Condition No.104 of the Exemption Notification? - HELD THAT:- It is relevant to note that neither ground has been raised in the present appeal nor any specific question is projected regarding the Tribunal’s finding that the Adjudicating Authority had travelled beyond the scope of the show cause notice. The demands raised in respect of helicopters having Registration Nos.VT-AZU and VT-AZV was on the basis that the respondent had transferred the NSOP to its group company. The Tribunal found that there was no such allegation in the show cause notice and the order passed by the Adjudicating Authority was liable to be set aside. There is no challenge to the said conclusion in this appeal. In the present case, there is no dispute that the respondent had used the helicopters for air transport services as defined in sub-rule (9) of Rule 3 of the Aircraft Rules, 1937 (Aircraft Rules). Thus, the condition that the helicopters were used for non-scheduled (passenger) services/ non-scheduled (charter) services was satisfied - It is clear from a plain reading of Condition No.104 of the Exemption Notification that the exemption from custom duties would be available in respect of an aircraft used for providing non-scheduled (passenger) services or non-scheduled (charter) services. Accordingly, if the aircraft is used for either of the aforesaid purposes, the Condition No.104 of the Exemption Notification would be satisfied. In East India Hotels Ltd. [2023 (2) TMI 47 - DELHI HIGH COURT], this Court had noted that the term ‘air transport service’ is defined in wide terms and would cover transport by air of humans, animals, mails or any other thing, animate or inanimate. However, for a service to fall within the meaning of air transport service as defined in Rule 3(9) of the Aircraft Rules, it is essential that the same is provided for some kind of remuneration. Although, the requirements of Condition No.104 of the Exemption Notification are unambiguous but the explanation inserted by way of amendment of Condition No.104 of the Exemption Notification amply clarifies that the exemption condition would be satisfied if the aircraft imported is used for non-scheduled (passenger) services or non-scheduled (charter) services. The impugned order, to the extent that it holds that Customs Authorities can take action on the basis of the undertaking submitted by the importer only when the DGCA holds that the conditions of the permit issued by them have been violated, is set aside - Appeal allowed in part.
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