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2015 (8) TMI 382 - AUTHORITY FOR ADVANCE RULINGS

2015 (8) TMI 382 - AUTHORITY FOR ADVANCE RULINGS - 2015 (325) E.L.T. 617 (A. A. R.) - Classification of goods – Duty Exemption – Replacement of Seats – Applicant intends to import seats of aircraft for replacing existing seats to providing more comfortable flying experience to fliers; that seats requiring repairing due to wear and tear shall also be replaced – Whether new seats that were imported for replacing existing seats were said to be for servicing, repair or maintenance of aircraft under .....

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interpretation of notification, was legally incorrect –There can be no doubt that seats were integral part of aeroplane – Rule 3 (33C) and Rule 60 of Aircraft Rules, 1937, maintenance inter-alia include replacement, modifications, repairs and servicing – Thus, new seats that were being imported for servicing, repair or maintenance of aircraft – Decided in favour of Assesse. - Ruling No. AAR/Cus/06/2015 ,Application No. AAR/44/Cus/05/12 - Dated:- 24-7-2015 - V. S. Sirpurkar, Chairman And Shri S. .....

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s and to improve the fuel efficiency of the aircraft as the seats would be lighter in weight; that in this process, seats requiring repairing due to wear and tear shall also be replaced. Applicant further submits that for such repair and maintenance activity under the aircraft, they had obtained approval from Directorate General of Civil Aviation (DGCA) as required under Civil Aviation Requirements (CAR)-145; that the certificate of approval allows them to carry out minor structural repair; that .....

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t, they are operating 96 Aircrafts of A-320 family; that Airbus has fixed capacity of 180 seats; that such aircrafts were originally fitted with the Weber Passenger seats, which have been replaced by Dragonfly brand in 52 aircrafts out of its fleet of 96 aircrafts; that weight of Weber seat is 13 kg, as compared to weight of Dragonfly seat, which is 9 Kg; that applicant has been able to reduce to weight of its one Airbus 320 by 700 Kg approximately; that if there is reduction of 1% in weight, 10 .....

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ption of imports of aircraft seats vide Bills of Entry No. 9654917 and 9654931, both dated 23.03.2013. Therefore, application needs to be rejected as per Section 28 E (2) (a) of the Customs Act, 1962. 4. Section 28 I (2) (a) of the Customs Act, 1962 envisages that the Authority shall not allow the application where the question raised is already pending in the applicant's case before any officer of Customs, the Appellate Tribunal or any Court. It is noticed that the applicant filed applicati .....

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Revenue that they came to know about application filed by the applicant and pending with this Authority, only when they sought clarification in respect of Bills of Entry filed. Applicant submits that vide letter dated 01.01.2013, they informed Assistant Commissioner of Customs (Import), Hyderabad i.e. concerned officer, about the same, whereas imports were made from 15.01.2013. This point has not been countered by the Revenue. Therefore, we are convinced that the applicant had informed the Reve .....

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d 17.3.2012, exempts parts of aircraft falling under any chapter from whole of basic customs duty subject to fulfillment of condition no. 21 provided therein. The relevant part of condition no. 21 reads as follows:- If imported for servicing, repair or maintenance of aircraft, which is used for operating scheduled air transport service or the scheduled air cargo service, as the case may be; 8. Applicant has mentioned that the terms servicing , repair and maintenance have not been defined under N .....

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required to ensure the continuing airworthiness of an aircraft, including any one or combination of overhaul, inspection, replacement, defect rectification and the embodiment of a modification or repair or test: Rule 60 - Maintenance standards and certification- (I) In this rule, 'maintenance' refer to performance of all work necessary for the purpose of ensuring that the aircraft is airworthy and safe including servicing of the aircraft and all modifications, repairs, replacements, over .....

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ued under Rule 133 B of the Aircraft Rules. The CAR 145 enumerates a list of activities which are permitted to be undertaken by such approved organizations. As part of the 'minor scheduled line maintenance', it allows such approved organizations to undertake replacement of passenger and cabin crew seats. 11. Applicant relied on the decision of New Holland Tractors (India) Pvt. Ltd. Vs CCE, Noida, [2010(253) ELT 249 (Tri.-Del.)], in support of their contention. Further, applicant submitte .....

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ndian Airlines vs. Collector of Customs [1988 (37) E.L.T. 420 (Tribunal)]. As such, 'Aircraft seats' cannot be considered as 'Spares / Parts' Aircrafts. Further, Revenue submits that the new seats are not meant for replacing damaged or unworkable seats but for up-gradation of the aircraft in order to make it more comfortable as an activity of servicing, repairing or maintenance. Therefore, the benefit of exemption notifications cannot be extended to aircraft seats as they do not .....

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the standard rate specified in the corresponding entry in column (4) of the said Table; b) from so much of the additional duty leviable thereon under sub-section (i) of Section 3 of the Customs Tariff Act, 1975 as is in excess of the additional duty rate specified in the corresponding entry in column 5 of the said Table, subject to any of the conditions, specified in the Annexure to the notification, the condition number of which is mentioned in the corresponding entry in column (6) of said Tab .....

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s the case may be; or (ii) The parts are brought into India for servicing, repair or maintenance of an aircraft mentioned in clause (ii) of Condition No.(75) Explanation.- The expression scheduled air transport service and scheduled air cargo service shall have the meanings respectively assigned to them in Condition No. 75. 15. Condition No. 75 of the Notification No. 12/2012 dated 17.03.2012 read with Notification No. 334/2012- TRU dated 23.03.2012, is reproduced as under; 75 If,- (i) Imported .....

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competent authority in Ministry of Civil aviation, not exceeding sixty days, from the date of entry. 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) scheduled air transport service means an 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 sys .....

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eats are to be classified under CTH 94011000 and not under Heading 8803, benefit of Notification No. 12/2012-Cus is not available to import of aircraft seats. Further, Revenue relied on the judgment in Indian Airlines Vs Collector of Customs [1988 (37) ELT 420 (T)], wherein it was held that benefit of exemption notification no. 145/77-Cus dated 1977 is not to be extended to aircraft seats imported by Indian Airlines, as Heading 94.01/04 and not Heading 88, specifically covers seats of a kind use .....

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on Nos. 145/77-Cus dated 9- 7-1977 and 99/81-Cus dated 1.4.1981 to ascertain whether imported aeroplane tyres can be exempted from custom duty as aeroplane parts. It was held that neither of the two Notifications places the goods covered by it under any specific head of the Customs Tariff and it appeared that the law makers were conscious of the fact that the goods they are listing for exemption fell under different headings or chapters of the Customs Tariff. For example, of the articles mention .....

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s which would go under the machinery heading, and so on and so forth. By not writing the chapter head into the notifications, the exemption become possible for all kinds of aeroplane parts described under these notifications. This Larger Bench judgment also negates the decision rendered by the Tribunal, on similar issue and relied upon by the Revenue. 18. Hon'ble Supreme Court in case of Collector of Customs, Bangalore vs. Maestro Motors Ltd. [2004 (174) ELT 289 (SC)] while deciding whether .....

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ther, a Notification has to be interpreted in terms of its language. If in the Notification exemption is granted with reference to tariff items in the First Schedule to the Customs Tariff Act, 1975, then the same Rules of Interpretation must apply. In that case the goods will be classified, even for the purposes of the Notification, as they are classified for purposes of payment of customs duty. But where the language is plain and clear effect must be given to it. In this Notification what is ex .....

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hus components in completely knocked down packs would get the exemption under this Notification, even though for purposes of classification they may be considered to be cars. 19. Applicant proposes to import seats of aircraft claiming exemption of Notification No. 12/2012-Cus (S. No. 454), wherein parts (other than rubber tubes) of aircraft of heading 8802 are subjected to nil rate of duty. Contention of the applicant is that seats of aircrafts are parts of aircrafts, thus, Notification No.12/20 .....

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is plain and clear, effect must be given to it. Plain reading of the notification show that all parts (other than rubber tubes) of aircraft of Heading 8802 are exempt from Customs duty including seats of aircraft. As per S. No. 454 of subject notification, parts of aircraft of Heading 8802 falling under any Chapter of Customs Tariff are exempt from duty. Tariff item 8802 contains Other aircrafts (For example, Helicopters, Aeroplanes), Spacecrafts (including Satellites) and suborbital and Spacec .....

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Import Tariff, even for interpretation of notification in this case, is legally incorrect. 20. The benefit of Notification No. 12/2012-Cus (S.No. 454) is available to parts (other than rubber tubes), of aircraft of heading 8802. There can be no doubt that seats are integral part of the aeroplane. This is also confirmed by the Department of Civil Aviation by clarifying that the seat would form part of the aircraft. Further, it is not possible for the airline to operate the flight without seats. .....

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