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2016 (9) TMI 779 - AUTHORITY FOR ADVANCE RULINGS

2016 (9) TMI 779 - AUTHORITY FOR ADVANCE RULINGS - 2016 (340) E.L.T. 437 (A. A. R.) - 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 .....

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d for import of aircraft for providing non-scheduled (passenger) services or non-scheduled (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 .....

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roviding non-scheduled (passenger) services or non-scheduled (charter) services. - 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 n .....

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tors and friends. In view of the above, paragraph 2.5 of CAR issued in pursuance of Rule 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 t .....

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ees/directors and their family, not necessarily for business purposes. b) Charter the 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.Shukl .....

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investors, promoters and their family members/friends, as revenue flights 2. Applicant 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-schedul .....

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ble. The purview of non-scheduled (passenger) services or non-scheduled (charter) services 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 t .....

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flights undertaken should be against payment / remuneration. Therefore, even if the applicant 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 bene .....

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oyees/directors/investors and their family/friends, not necessarily for business purposes 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 expressi .....

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arly an operator having non-scheduled operator permit (charter) shall provide non-scheduled (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 .....

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in light of words employed by it and not on any other basis. A person who claims exemption 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 im .....

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mily/friends, not necessarily for business purposes iii) Lease the aircraft to group companies 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 t .....

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factor in exemption and as the applicant does not fall within the scope of the notification 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 .....

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tant Commissioner of Customs, as the case may be, at the time of importation that; a. 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) .....

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pproved 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: 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 d .....

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of time. 8. The issue raised by the Revenue is in respect of Condition No. 77 annexed 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 .....

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iding non-scheduled (passenger) services or non-scheduled (charter) services, as the case 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 ra .....

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n and provision of CAR, especially paragraph 2.5 and 2.6 cannot be invoked to extend the 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 .....

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craft 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 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 Bo .....

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il concessions/facility/ provisions, are not correct. 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. 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 conditi .....

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fit of exemption notification has been extended to operators subject to fulfillment of 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 .....

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