TMI Blog2010 (11) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 1-3-2002. M/s. AASPL availed the said exemption from customs duty on the basis of a Permit No. 04/2008, dated 30-1-2008 issued by the Director General of Civil Aviation (DGCA) to operate non-scheduled air-transport services (passenger). Initially, the customs authorities granted the exemption at the time of clearance of the helicopter. Subsequently, the impugned show-cause notice dated 31-7-2008 has been issued seeking to deny the impugned exemption and demanding customs duty amounting to Rs. 6,74,18,712/-. The adjudicating Commissioner has passed a detailed order running into 51 pages examining various aspects of the case and has dropped the proceedings initiated under the impugned show-cause notice. In her order, she has held inter alia that M/s. AASPL did not use the impugned helicopter as a private aircraft and that the use of the said helicopter was in terms of the permit granted to them by DGCA. Consequently, she has also held that there was no post-import contravention and that the impugned exemption has been correctly availed. Accordingly, she has dropped the duty demand and the proposals to confiscate the impugned aircraft and to impose penalty on the respondents. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes. 4. We note that the grounds of appeal taken in the impugned review order is silent on the issues raised in the show-cause notice which have been duly formulated by the adjudicating Commissioner, considered and decided by her while passing the impugned order. At this stage, we also take note of the fact that in the written submissions filed by Shri Tarun Gulati, learned counsel appearing for M/s. AASPL, objection has been taken that the appeal filed by the department, on the basis of authorization given by the Committee of Chief Commissioners, for the first time raises the ground that the respondents were granted a permit for non-scheduled (passenger) services and therefore, they were not authorized to carry on charter services. The learned counsel has stated that this ground which was not taken in the show-cause notice has been raised for the first time in the appeal petition. He further states that the show-cause notice was issued on the ground that the respondents had misused the impugned helicopter for private purposes/business development and now an entirely new ground has been taken in the appeal which is not permissible. Similar objection has been raised in the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondents have submitted before us that the Civil Aviation authorities are regularly granting renewal of the permission initially issued to them and no action whatsoever has been taken against them for any violations. Nothing contrary in this regard has also been showed to us from the department s side. It is undisputed that it is the job of the Civil Aviation authorities to ensure that the aircrafts are operated in terms of the permit issued by that authority. The customs authorities cannot obviously monitor whether an operator has violated the permit granted to him by the Civil Aviation authority. In view of the fact that no violation has been detected against the respondents by that authority and the permit is being renewed regularly from time to time, it has to be presumed in the absence of any contrary evidence that the requirement of DGFT notification is fulfilled and the customs authorities cannot take any action unilaterally on their own in this regard. 7. However, the customs authorities are well within their powers to take any action for any violation of any of the conditions in an exemption notification. An exemption notification may have certain pre-import conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n before us has only pre-import conditions and there is no separate post-import condition. The pre-import conditions requiring an approval from DGCA and an undertaking to be furnished at the time of importation have already been fulfilled and thereafter, the exemption has been granted at the time of import. The respondents, therefore, cannot be charged with violation of a pre-import condition at a later point of time. If the Government wanted that the customs authorities should monitor the subsequent use of the aircraft, then it would have provided a suitable post-import condition in the exemption notification. Of course, the Department can proceed in terms of the undertaking executed for violation of the terms of the undertaking but that has not been done in this case. Rather a show-cause notice has been issued invoking Section 28 of the Customs Act, 1962 vide paragraphs 25 and 27 of the notice. It is settled law that Section 28 can be invoked only in the case of short-levy, non-levy and erroneous refund. Where an exemption has been allowed after the importer has fulfilled the pre-import conditions, such a case cannot be categorised either as a case of short-levy or as a case of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that the adjudicating Commissioner after analyzing various legal provisions has taken a reasonable view in this regard and the same cannot be faulted especially in the absence of any restriction in the notification not to permit use of the aircraft by the importing company or its holding company on payment. If the Government finds such use not to be in line with the intended purpose of the exemption, it can always amend the notification specifically disallowing exemption for a particular kind of use such as use by Group Companies. However, as the exemption notification is worded, it would be discriminatory to object to use of the aircraft by the group companies on payment, whereas others are allowed such use. 13. As regards the requirement of published tariff for carrying out charter operations, the respondents have stated that firstly, this point was not raised in the show-cause notice but only taken up at the appeal stage and secondly, while defining non-scheduled (charter) services, published tariff has been referred to as one of the characteristics of charter services and not as a condition of the exemption notification and further, they have submitted that the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be denied to M/s. AASPL on the ground of chartering the impugned aircraft. The exemption notification does not restrict use of an imported aircraft by the group companies and so long as the flights undertaken are paid for, the aircraft does not become a private aircraft. We also find that the two grounds of appeal advanced by the department (vide paragraph 18.2.1 of the Review Order) have been taken up for the first time before the Tribunal and the same were not incorporated in the show-cause notice. The Committee of Chief Commissioners has not proposed any grounds of appeal on points which were part of the show-cause notice and which have been adjudicated by the adjudicating Commissioner. When only fresh grounds are taken up by the review committee, that itself goes to show that the Committee has not found any fault with the points determined by the adjudicating Commissioner. 15. In view of our findings as above, we are of the opinion that the impugned order passed by the adjudicating Commissioner does not require any interference. Hence, we dismiss the department s appeal filed on the basis of the grounds framed by the Committee of Chief Commissioners. The cross-objection fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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