TMI Blog2018 (9) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... use of charterer on the terms and conditions of the permit in favour of the appellant. It is evident that the Aircraft was supplied alongwith the licensed / trained Pilot and necessary Engineering Crew to operate the Aircraft. Thus, the effective control and possession of the Aircraft was still with the appellant, who was charging the charterer on the basis of actual time consumed during the said flight. An identical issue regarding charter hire of helicopter came up before the Tribunal in the case of Global Vectra Helicorp Ltd. vs. CC (Import) Mumbai [2015 (2) TMI 974 - CESTAT MUMBAI (LB)], in that case the appellant therein claimed the classification of their service as Transportation of Passengers by Air Service. But, the Tribunal after very detailed discussion of the facts and various case laws on the subject as well as CBEC Circular No. 20/2009 dt. 09.02.2009 came to the conclusion that the services will be rightly classifiable under the category of Supply to Tangible Goods Service - the classification of the service under the category of STGS upheld. Time Limitation - Held that:- It is apparent from the show cause notice dated 21.12.2010 that a demand for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals) who has upheld the said order and rejected the appeal. Being aggrieved, the present appeal has been filed. 2. We have heard Mr.Narasimhan, ld. Counsel for the appellant and Mr. Vivek Pandey, ld. D.R. for the Department. 3. It is submitted on behalf of the appellant that the appellant own two Aircrafts/Helicopters, which are being provided by them on chartered hire basis. Hence, in fact they are providing the Aircraft Operator Services and such services for the domestic region came into tax net w. e. f. 1st June, 2010. The service of the appellant falls under the category of transport of passengers by Air service, which was not taxable for the period in dispute. For the Aircraft Operator Services the appellant are duly registered and have been discharging their liability since the services have been taxable. The demand raised alleging the same to be a service as that of supply of tangible goods is unjustified. The case of Global Vectra Helicorp Ltd. v. Commissioner of Service Tax, Mumbai-II 2015 (2) TMI 974 CESTAT MUMBAI (LB) is conceded with the mention that the issue has already been decided in favour of the department. It is however impressed upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TRU dated 29th Feb., 2008, issued clarification regarding the introduction of the levy of supply of tangible goods. The relevant portion of the said clarification is extracted hereunder for ready reference: 4.4. Supply of Tangible Goods for use: .......... 4.4.2. Excavators, wheels loaders dump trucks, crawler carriers companion equipment, cranes etc. offshore construction vessels barges, geo-technical vessels, tug and barges flotillas, ring and high value machineries are supplied for use, with no legal right of possession and effective control. Transaction of allowing another person to use the goods, without giving legal right of possession and effective control, not being treated as sale of goods, is treated as service. 6. From both these definitions, it becomes clear that for an Aircraft operator service , the activity is regulated under strict observation of Aviation Industry subject to stringent regulatory controls, Director General of Civil Aviation grants permits to the scheduled aircraft transport service. Even a non-scheduled permit can be granted by DGCA and the fact remains is that any person in Aviation has at least to be a non-scheduled operator. As far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia as may be designated by the charterer in fully operational condition for the charter service. In clause 4 relating to service, it was provided that the appellant shall ensure that the helicopters are available and fully operational for the exclusive use of the charterer and the persons authorized by the charterer and the daily flight schedule was to be provided by the charterer. The contract also envisaged that the appellant shall provide experienced IFR licensed aircrews for the operation and qualified maintenance crews for servicing of the helicopters as per the prescribed standards. Passengers and/or cargo as required by the charterer was to be carried in the helicopter. All necessary clearances, permission to hold helicopter licence to operate the helicopter, compliance with all laws, rules, regulations, orders, standards and schedules as specified by the Directorate General of Civil Aviation was to be complied with by the appellant, who is the service provider. The appellant was also obligated to provide to the charterer, the helicopters daily in airworthy condition regularly on all 365 days of the year. For the services rendered the appellants were eligible for remune ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive. If this principle is applied in reading the contracts entered into by the appellant with their clients, it is seen that the contract is for charterhiring of the helicopters and not for flying of passengers/cargo. 6.4 The Hon‟ble High Court of Bombay, in a case of charter hiring of vessel for offshore oil operations, considered an identical issue in Indian National Shipowners Association v. UOI. The question before the Hon‟ble High Court was whether the transaction involved in charter hiring of vessels for offshore explorations, is liable to tax under mining services or under supply of tangible goods for use service. Hon‟ble High Court in the said case held as follows:- 37. Entry (zzzzj) is entirely a new entry. Whereas entry (zzzy) covers services provided to any person in relation to mining of mineral, oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tangible goods by sea without transferring right of possession and effective control thereof. The services rendered by the members of the 1st petitioner are covered by entry (zzzzj) because they inter alia supply vessels, offshore support vessels, barges, tugs etc. without transferring right of possession and effective control over them. In contrast entry (zzzy) was introduced to comprehensively bring under the service tax net activities having a direct nexus to mining activities. Entry (zzzzj) is not a carve out of entry (zzzy). Both entries are independent. Entry (zzzzj) was not inserted into the Finance Act by amending entry (zzzy). It is not possible to invent a remote connection of the services rendered by the members of the 1st petitioner to mining activities and hold that they fall in entry (zzzy). Entry (zzzzj) is not a specie of what is covered by entry (zzzy). Nature of the services rendered by the members of the 1st petitioner, legislative history of the two entries, various circulars to which, we have made reference and the relevant judgments which we have noted hereinabove lead us to hold that the entry contained in Section 65(105)(zzzy) of the Finance Act, 1994 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilities in respect of passengers, cargo, crew, helicopter and third party would be incurred by the assessee and reimbursed to them by Heligo. Heligo would also pay monthly remuneration to the pilots of the assessee. They would also bear the costs of maintenance of the helicopter and also the costs of fuel and consumables required for its operation. On a perusal of the charter-hire agreement between the assessee and Heligo, we find that Heligo chartered/hired the helicopter for their exclusive use and they incurred the entire costs of operation and maintenance of the helicopter and even the cost of insurance to cover all liabilities. One significant term of the contract was that the helicopter shall be utilized solely for the purpose of providing the services pursuant to the agreement and the contractor shall not utilize the helicopter for any other purpose without the prior consent of the company. Accordingly, the helicopter could not be used by the assessee (contractor) for any other purpose without the prior consent of Heligo (company). It is evident that the agreement created an exclusive right in Heligo for use of the helicopter during its tenure. That Heligo exercised t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the appellants has argued that two distinct requirements have to be satisfied by an air transport service to be called scheduled air transport service . According to him, the two essential requirements are the following : (a) there must be regular or frequent flights or flights operated according to a published time table between the same two or more places; (b) each flight must be open to members of the public. The learned counsel has argued that any air transport service that does not meet the above two requirements will be a non-scheduled (passenger) service. On this basis, it has been claimed that the assessee was providing non-scheduled (passenger) service under the permit granted by DGCA and was thereby complying with condition No. 104. This argument is fraught with analytical error. Any such dissection of the definition of scheduled air transport service as attempted by the counsel is not warranted to obtain the meaning of non-scheduled air transport service . This is because requirement (b) mentioned by him is not determinative of whether the air transport service is scheduled or nonscheduled . To our mind, the only difference between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft , the flight operations cannot be called non-scheduled (passenger) services . The ratio of the above decision would apply squarely to the facts of the case before us. As can be seen, the service provided by the appellant cannot be covered by transport of passengers by air service since in that case, the definition specifically provides that the service is in relation to scheduled or unscheduled air transport of passengers. The thrust in the definition is on transport of passengers. In the case of the appellant, the service is provided to various companies, who chartered the aircraft for specific time or for specific journey. The payment is not based on number of passengers. No tickets are issued to the passengers and no charges are collected from the passengers. Therefore, the service provided cannot be considered as transport of passengers, but has to be considered as charter of aircraft. There is no doubt that the right of possession and effective control while in use by the charterer is not parted with. Thus the charter hire of helicopters to ONGC and other clients for flight operations as per their requirements cannot be said to be non-scheduled (passenger) servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in proviso to Section 73 of the Act. The law for invoking extended period of limitation is stated that the onus heavily rest upon the Department to prove the alleged suppression of facts. Perusal of entire record shows no such discharge on part of the Department, except merely raising the oral allegation of suppression. The Hon‟ble Supreme Court in the case of Gopal Zarda Udyog vs. CCE, Delhi 2005 (188) ELT 251 SC has held that extended period is applicable only when something positive other than mere inaction or failure on part of the assessee is proved conscious and deliberate with holding of information by the assessee is necessary for invoking the extended period. It was clarified by the Hon‟ble Apex Court that if it comes to the knowledge of Department that assessee had reasonable belief that he is not required to give a particular information only normal period of limitation i.e. one year is applicable. In an earlier decision also in Cosmic Dye Chemical vs. CCE, Bombay 1995 (75) ELT 721 (SC), it was clarified that for invoking extended period of limitation, there should be an intention to evade duty. The alleged suppression must be wilful and it is fo ..... 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