TMI Blog2015 (6) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 3, and no other material. The finding of the Revenue that the service provided was not a passenger service as the appellant did not print passenger ticket nor the flights were opened to public is erroneous. We hold that offering the service to public at large includes entering into agreement for providing regular service to a few members of the public on a regular basis over a period of time. The expression person includes the company under various tax laws. Further, company also forms part of the general public. The members of the public (company included) due to requirement of its business enters into the agreement with the service providers for providing of service over an extended period of time, may be weeks, months or years, it cannot be said that the service was not provided to public. Further, printing of ticket is not an essential element and such a requirement is not there, where the services are provided on the basis of published tariff or agreement wherein the hourly charges and flying charges along with other charges are mentioned for providing service for extended period of time. Accordingly, we hold that the services provided by the importer are in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his failure to use the imported aircraft for the specified purposes, an amount equal to the duty payable on the said aircraft but for the exemption under this notification. Explanation.- for the purposes of this entry,- (a) Operator means a person, organization, or enterprise engaged in or offering to engage in aircraft operation; (b) Non-scheduled (passenger) services means air transport services other than Scheduled (passenger) air transport services as defined in Rule 3 of the Aircraft Rules, 1937. (c) Non-scheduled (charter) services mean services provided by a nonscheduled (charter) air transport operator, for charter or hire of an aircraft to any person, with published tariff, and who is registered with and approved by Directorate General of Civil Aviation for such purposes, and who conforms to the civil aviation requirement under the provision of rule 133A of the Aircraft Rules 1937. Provided that such Air Charter operator is a dedicated company or partnership firm, for the above purposes. Notification No. 21/02 stood amended by Notification No. 61/07, which provided for exemption of additional duty of customs also. 2. Appeal No. C/862/2012 is filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed only for providing non-scheduled (passenger) services and in the event of failure to comply with such undertaking, it will pay on demand the requisite tariff/duty. The importer subsequently also imported a 2 nd helicopter, serial No. 36097 under the Bill of entry No. 298817 dated 6.10.2007 and filed a similar undertaking, and availed exemption. 3.2 The appellant importer was operating these helicopters along with its other helicopters, under contract of service for providing transport of passengers and materials to certain companies. These contracts were mainly with oil companies for transportation of their person and materials to and from various oilrigs and other locations. One of the contract with ONGC, contact dated 10/8/2006, and another contract was with 'Gujarat State Petroleum Corporation Ltd.' entered in November, 2007, among others. The Revenue on its perception that the appellant importer is offering 'Charter services' and not 'Passenger services', as undertaken by it, pursuant to enquiry, issued show-cause notices dated 8/8/2011 which was adjudicated and the proposed demand of duty confirmed, with interest and penalty. Further the helicopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not to operate on a published timetable with the regular and/or systematic flights which constitute a recognizably systematic series. The appellant have in order to demonstrate that it have complied with the conditions as required under the said notification have filed the following facts in tabular chart on the date of arguments which is reproduced herein:- Element of Service offered by the Importer ONGC Contract dated 8 th Aug 2006 [Pg 143 DA] GSPC Contract in November 2007 [Pg 181 DA] IS AIR TRANSPORT SERVICE AS DEFINED UNDER RULE 3(9) Is a transport for person or things Contract for the carrying out ONGC's off shore operations [Recital 1 at Pg 144 DA], for the use of ONGC and its authorized personnel [Clause 4.1 - Pg 164 DA] and for carriage of passengers and cargo [Clause 4.4 - Pg 165 DA] Contract for air logistics, support of airlifting of GSPC's crew including when needed medivac [Schedule B - Pg 199DA] Is for remuneration For a contract price [Clause 1.9 - Pg 145 DA] in terms of payments sent out [Claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a stretch [Clause 6.1 (ii) - Pg 166] Flying requirement is categorized as less than 100 hours and more than 100 hours per mensem [Clause 6.1 (iii) - Pg. 167DA]. Availability of a helicopter is calculated on a operation day basis in the manner set out in Clause 7.2 [Pg 169-DA]. Payment is therefore as per actual availability and the actual flying hours done by the helicopters [Proviso to Clause 1.1 (b) - Pg 161 -DA] Flying time has been separately defined [Clause 1.1 (i)- Pg 162 DA] The lack of any system or regularity may be seen from the existence of a definition of a Temporary Base Station from where temporarily the helicopter could be called upon to have its operations / facilities [Clause 1.1 (s) - Pg 162 DA] Even on the number of aircraft, ONGC has an option to seek 2 additional helicopters for offshore operations after 90 days notice [Clause 2.2. - Pg 163 DA] The invoices upon which the Department has relied will show a random patterns of flights, persons ranging from: . No flights in April 2008, except for 2 flights daily from 26 Apr - 30 Apr carrying passengers ranging from from 0-47 persons on a given day and cargo ranging from 31 kg - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n aircraft, there must be a published Tariff issued by the importer, the importer must be registered and approved with the DGCA for such purposes and must confirm to the Civil aviation Requirements under Rule 133A of Aircraft Rules. In the present case there was no Charter/hire of an Aircraft, rather under the contract with ONGC under clause 3.1, 9 helicopters were listed which were to be provided and none of the helicopters involved in the present appeal are even mentioned in the contract. That in reality such addition, alteration and substitution of helicopters has in fact taken place, will also be seen from the invoices raised in the matter, where it can be seen that the 2 helicopters in question were used as standby helicopters and were swapped and used between contracts, with different companies, as per the mobilization schedules and availability. The fact that the 2 helicopters in question were used as standby helicopters is evident and made out on the face of the appellant's letter dated 21/6/2008, enclosing the invoices wherein it is stated that: 3. Here it is pertinent to note that the aircraft VT AZT (36422) and VT AZW (36097) being the standby aircraft, the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices (Passengers). In view of the clarification given by the licensing authority (DGCA) there is no alleged violation of Condition No. 104 vide Notification No. 21/02 (as amended) and as such the impugned order is bad and fit to be set aside. 5.3 The appellant further relies on the ruling of the Hon'ble Apex Court in the case of Titan Medical Systems (P) Ltd. vs. Commissioner of Customs - (2003) 9 SCC 133, wherein the hon'ble Supreme Court has held that it would be for the licensing authority to take action on any much mis-representation and it was not for the Customs authority to deny the benefit of an exemption notification based on such alleged mis-representation. It is further urged that in the case of King Rotors (supra), the importer had entered into an agreement with one Heligo Charter Pvt. Ltd. and under such agreement it parted with the possession of the helicopter to Heligo Charter, which was taking care of its maintenance, repair and operation etc. On enquiry by the Revenue regarding import condition, King Rotors did not submit any documentary evidence of end-use of the helicopter. In course of further enquiry, the assessee submitted, in part, copies of passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it. 5.5 It is further urged that NSOP license did not permit the lease of aircraft to other persons/companies and clearly DGCA while issuing such permit had only intended its use for purely passenger services and no other. Further, in the case of King Rotors, this Tribunal took notice of the submissions that the assessee-importer holding NSOP, was entitled to use helicopter for charter operations. The licensing authority was aware of the use of aircraft for charter operations and has never objected to it and further the permit was renewed from time to time, which indicates that DGCA have considered and accepted the charter operation to be permissible for NSOP (Passenger). Further, reliance was placed by Counsel for King Rotor on clause 9.2 of Passenger CAR , which reads thus:- Non-scheduled operations can conduct charter/non-schedules operations for transportation by air of persons, mail or goods. In such operations, the operators shall not publish their time schedules as the operations are of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of contract and accordingly, the helicopter was not being operated for the use or purpose of public, in general. 5.8 So far condition No. 104 as amended is concerned, it strikes out the following definition of Non-Scheduled Passenger Service that:- (a) Non-Scheduled passenger Service means air transport service other than scheduled (passenger) air transport service as defined in Rule 3 of the Air Craft Rules, 1937 . From the definition of scheduled (passenger) aircraft service under the Air Craft Rules, 1937, it is evident that such service is to be provided as per published schedule and tariff, which is not so in the case of the appellant herein. Further, schedule of air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public as defined under Rule 3 (49) of the Air Craft Rules, 1937. 5.9 It is further urged that in order for the services/flights being operated by the assessee to be in compliance with Condition No. 104 it must possess all of the elements cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication. It is an application of this principle that a statutory notification may not be extended so as to meet a casus omissus. As appears in the judgement of the Privy Council in Crawford vs. Spooner. ... we cannot aid the legislature's defective phrasing of the Act, we cannot add, and mend, and, by construction, make up deficiencies which are left there. Learned Counsel for the respondents is possibly right in his submission that the object behind the two notifications is to encourage the actual manufacturers of handloom cloth to switch over to power looms by constituting themselves into Cooperative Societies. But the operation of the notifications has to be judged not by the object which the rule-making authority had in mind but by words which it has employed to effectuate the legislative intent... 5.11 It is further urged that what was required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the helicopter with call sign VT AZW for exclusive charter services at Mumbai for ONGC and British Gas Exploration and Production India Ltd (BGEP) and that helicopter with call sign VT AZT for exclusive charter services at Rajhamundary to Gujrat State petroleum Corporation and Reliance Industries Ltd., on monthly fixed charge as well as flying hours basis. Thus, M/s. Global Vectra have violated the conditions of the exemption notification. It is admitted fact that Global Vectra have the approval from Ministry of Civil Aviation for import of helicopter for providing non-scheduled (passenger) service under the Customs Notification No. 21/02 (as amended), provides for exemption from payment of Basic Customs Duty subject to the following condition - (i) the aircrafts are imported by an operator who has been granted approval by the competent authority in the Ministry of Civil Aviation to import aircraft for providing Non-Scheduled (Passenger) Services or Non-Scheduled (Charter) Services; and (ii) the importer furnished an undertaking to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, at the time of importation that:- a. The said air ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and have charged them on monthly fixed charge as well as flying hours basis. The copy of agreement submitted by M/s. Global Vectra supports this contention. The issue therefore is whether an importer who has been permitted to import helicopter for providing non schedule (passenger) services can use it for providing charter services. The Adjudicating authority has held that they cannot use the helicopter for providing non Scheduled (charter) services whereas the appellant has claimed otherwise. That this issue has been examined by the Hon'ble CESTAT in the matter of KING ROTORS AIR CHARTER P. LTD. vs. C.C. (ACC IMPORT), MUMBAI 2011 (269) ELT 343 (Tri-Mum) and Hon'ble Tribunal has held that as per wording used in the notification helicopter imported for providing passenger services cannot be used for providing charter services. The paras of the judgments relied on are 24.1, 24.2, 24.4, 24.5, 24.8, 24.9, 24.10, 24.11, 24.12, 24.14. 6.2 The Spl. Counsel states that requirement (b) as mentioned is not determinative of whether the air transport service is scheduled or non-scheduled . The only difference between the two types of Air Transport Service lies in the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, it is prayed that this Tribunal be pleased to dismiss the appeal of the assessee and allow the appeal of the Revenue by imposing penalty on the interest component. 7. Having considered the rival contentions, we find that there is no violation by the importer-appellant to the post import condition No. 104 of Notification No. 21/07, as amended. Accordingly, under the undertaking given by the importer, it was required to offer only non-scheduled passenger service. Such service has been defined in Explanation (b) of the said Notification as 'Air Transport Service other than a Scheduled Air Transport (Passenger) Services' with reference to Rule 3 of the Aircraft Rules, 1937. Hence, the one and only source of definition and strictly interpreting the exemption Notification, reliance has to be placed on the said Rule 3, and no other material. On reading the definition of Air Transport Service under Rule 3(9) with the definition of Scheduled Air Transport Service under Rule 3(49), it is evident that in order to classify as the 'non-scheduled passenger service', the service must be for transportation of persons or things for remuneration, operating to a single ..... X X X X Extracts X X X X X X X X Extracts X X X X
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