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M/s Prajesh Marketing Limited, Mumbai Versus Commissioner of Customs (Import)

2016 (9) TMI 779 - AUTHORITY FOR ADVANCE RULINGS

Benefit of the Notification No. 12/2012-Cus - import of aircraft for providing charter service - benefit of notification available subject to the Condition No. 77 prescribed in the Notification - Whether the benefit of the Notification No. 12/2012-Cus is available to NSOP holder for the following categories of revenue flights proposed to be undertaken; a) Use by the permit holder’s employees/directors/investors and their family/friends, not necessarily for business purposes. b) Charter the aircr .....

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uled (charter) services and importer is required to furnish undertaking to the Deputy/assistant Commissioner of Customs at the time of import to the effect that the aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services, as the case may be. The conditions have to be read in conjunction with Explanation 2 to the notification, which clarifies that the use of such imported aircraft by a non-scheduled (passenger) operator for non-scheduled (c .....

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Non-scheduled (charter) services are explained under Explanation 1 and one of the ingredients of non-scheduled (charter) services is that it should conform to CAR, which is issued under Rule 133A of the Aircraft Rules, 1937. Rule 133A of the Aircraft Rules, 1937 authorizes the Director General to issue special directions through notices etc including CAR relating to operation, use, possession, maintenance or navigation of aircraft flying over India or aircraft registered in India. Paragraph 2.5 .....

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le 133A of the Aircraft Rules, 1937 is regarding operation and use of aircraft and same is part of Explanation I (c) to Notification No. 12/2012-Cus. It also noticed that the subject notification as well as contents of CAR does not debar the use of said aircraft for other than business purposes - aircraft can be used for other than business purposes - The intended purpose of the aircraft to be imported in the nature of personal use or public use - Held that: - exemption notification does not .....

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aircraft to group companies for use by their employees/directors and their family, not necessarily for business purposes. c) Lease the aircraft to group companies for use by their employees/directors and their family, not necessarily for business purposes. - Ruling No. AAR/CUS/ 25 /2016, Application No. AAR/44/CUS/6/2015 - Dated:- 22-7-2016 - V. S. Sirpurkar (Chairman), Shri S.S.Rana (Member) And Shri R.S.Shukla (Member) For the Applicant : Shri Abhinav Jaganathan, Advocate Shri S Vasudevan, Adv .....

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submits that the benefit of Notification No. 12/12-Cus (Sr. No. 453) dated 17.03.2012 is subject to the Condition No. 77 prescribed in the Notification. As per Condition No. 77, the benefit of the Notification is available as long as; a. the aircraft is 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 b. the importer gives .....

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ices and the activities permitted by NSOP holder is specified by the Civil Aviation Requirements, 2010 dated 1.6.2010 ( CAR ). Paragraph 2.5 of the CAR permits a non-scheduled operator to operate revenue charter flights for a company within its group companies, subsidiary companies, sister concern, associated companies, own employees, including chairman and members of the board of directors of the company and their family members, provided it is operated for remuneration, whether such service co .....

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plicant leases/charters the imported aircraft to related companies for use by their board members, employees, investors and their friends and families, the benefit will be available to the applicant as long as the applicant is paid for the use of the flight by the related company. Similarly, even if the applicant s own board members, employees, investors, or their families and friends use the aircraft, the benefit will be available as long as the applicant receives remuneration for the services .....

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ses c) Lease the aircraft to group companies for use by their employees/directors/investors and their family/friends, not necessarily for business purposes. 4. Revenue inter-alia submits that as per the language of the Notification No. 12/2012-Cus, non-scheduled (passenger) services and non-scheduled (charter) services are two distinct and mutually exclusive categories of services, as is clear from the expressions only and as the case may be used in the above text; that it is settled law that an .....

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duled (charter) service only. Revenue further submits that the benefit of Customs notification can be given only in accordance with the wordings of the notification and the benefit of relevant notification is available for operator having license for non-scheduled passengers who carries out non-scheduled (passenger) services or operating being non-scheduled (charter) services of the aircraft, for revenue; that the paragraph 2.5 and 2.6 of Civil Aviation Requirement (CAR) cannot be cited in this .....

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tion or concession is required to establish clearly that he is covered by the provision concerned and in case of doubt or ambiguity, the benefit of it would go to the State. It is settled law that the words, meanings and conditions of notification have to be strictly construed. Unless the conditions of the notification are fulfilled, the benefit of the notification cannot be derived. In the instant case, the importers have not fulfilled the condition of the notification in toto. Therefore, they .....

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ompanies for use by their employees/directors/investors and their family/friends, not necessarily for business purposes iv) The use of the aircraft in all the above cases will be against remuneration. No use will take place free of cost. Further, the above, it can be seen that the intended purpose of this aircraft is in the nature of personal use and not for public use. The aircraft is intended to be used for the personal use of their employees/directors/investors and their family/friends, not n .....

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ation as explained above, the application made by M/s Prajesh Marketing for advance ruling may be rejected. 6. Notification No. 12/2012-Cus dated 17.03.2012 exempts all goods from basic Custom duty and additional duty as in excess of the amount specified as per table below, subject to conditions mentioned in column 6 of the said table. TABLE S.No Chapter or Heading or Sub- heading or tariff item Description of goods Standard rate Additional duty rate Condition No. (1) (2) (3) (4) (5) (6) 453 880 .....

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the said aircraft shall be used only for providing non-scheduled(passenger) services or non-scheduled(charter) services, as the case may be; and b. he shall pay on demand, in the event of his failure to use the imported aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under this notification. Explanation.- 1. For the purposes of this entry,- (a) operator means a person, organization, or enterprise engaged or in offering to engage .....

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o the civil aviation requirement under the provision of rule 133A of the Aircraft Rules 1937: 2. For the purpose of this exemption, use of such imported aircraft by a non-scheduled (passenger) operator for non-scheduled (charter) services or by a non-scheduled (charter) operator for non-scheduled (passenger) services, shall not be construed to be a violation of the conditions of import at concessional rate of duty. 7. Para 2.5 of Civil Aviation Requirements (CAR) is reproduced as under: 2.5 A no .....

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to the Notification No. 12/2012-Cus. Condition No. 1 inter-alia prescribes that aircraft would be imported by the importer, who has been given approval by the Ministry of Civil Aviation for providing non-scheduled (passenger) services or non-scheduled (charter) services. Condition No. (ii) is regarding importer furnishing undertaking to the Customs authorities inter-alia to the effect that said aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charte .....

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ase may be. However, both these conditions have to be read in conjunction with Explanation 2 to the notification, which clarifies that the use of such imported aircraft by a non-scheduled (passenger) operator for non-scheduled (charter) services or by a non-scheduled (charter) operator for non-scheduled (passenger) services, shall not be construed to be a violation of the conditions of import at concessional rate of duty. It is noticed from the application filed by the applicant at Annexure I th .....

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he provisions/concessions/facilities provided by the DGCA. Explanation 1(c) to Notification No.12/2012-Cus while explaining non-scheduled (charter) services mean services, where all below mentioned ingredients are satisfied; I) Provided by a non-scheduled (charter) air transport operator; II) There should be charter or hire of an aircraft to any person; III) There should be published tariff; IV) Operator should be registered with and approved by DGCA for said purpose; and V) Operator should conf .....

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notices etc including CAR relating to operation, use, possession, maintenance or navigation of aircraft flying over India or aircraft registered in India. Paragraph 2.5 of CAR inter-alia also allows non-scheduled operator to operate revenue charter flights for a company within its group companies, subsidiary companies, sister concern, associated companies, own employees, including Chairman and members of the Board of Directors of the company and their family members, provided it is operated for .....

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notification as well as contents of CAR does not debar the use of said aircraft for other than business purposes. In the absence of any such restriction, aircraft can be used for other than business purposes. 10. Final contention of Revenue is that the intended purpose of the aircraft to be imported is in the nature of personal use and not for public use; that exemption notification does not cover such conditions; that public interest is always a guiding factor in exemption notification and app .....

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conditions mentioned therein. Therefore, it is not correct on the part of the Revenue to state that the applicant does not fall within the scope of the notification. 12. It is to be observed that during the hearing before this Authority, following judgements on the Tribunal were mentioned before us; a) CC, New Delhi vs. Sameer Gehlot 2011(263) ELT 129 (Tri.-Del.) b) King Rotors & Air Charter (P) ltd vs. CC, Mumbai 2011 (269) ELT 343 (Tri-Mum) (c) Dove Airlines (P) Ltd. vs. CC (P), New Delhi .....

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