TMI Blog2018 (10) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... ereas the demand under the said Section has been dropped but duty has been confirmed by way of enforcement of the bond, in absence of any such proposal in the show cause notice, the demand is bad and fit to be set aside. The appellant had rightly availed the benefit of concession/ exemption under Notification No. 21/2002 Cus. read with Notification No. 61/2007-Cus as amended - appeal allowed - decided in favor of appellant. - Custom Appeal No. 497 of 2010 - C/A/53139/2018-CU[DB] - Dated:- 15-10-2018 - Mr. Anil Choudhary, Member (Judicial) And Ms. Bijay Kumar, Member (Technical) For the Appellant : Sh. Prakash Shah Ms. Diksha Rai, Advocates For the Respondent : Sh. Rakesh Kumar, AR ORDER PER: ANIL CHOUDHARY: The issue involved in this appeal is whether the appellant importer of aircraft, have violated the post imports condition for availing the concession in the custom duty under Notification No. 21/2002-Cus. as amended by Notification No. 61/2007-Cus. read with condition No. 104, rendering it liable to payment of duty on import of aircraft, alongwith penalty under Section 112(a) and further imposition of redemption fine of ₹ 30 crore under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess will have to be recovered from the importer/ appellant. Reference was also made to Air Transport Circular 1 of 1998 dated 21.04.1998 issued by DGCA, wherein guidelines for operating non-scheduled chartered flight to foreign destinations makes a specific categorization of (i) International cargo flight (ii) Non revenue passenger charter flight (a) Private aircraft owned by individuals (b) Private aircraft owned by Companies/ Corporations (c) Aircraft belonging to non-scheduled/ scheduled operators Thus, there appeared to be different category for private use from other users, namely non-scheduled operators. 5. It is further alleged in the show cause notice dated 18.07.2008, that statement of Sh. Robin Kumar Sharma, Manager Operation was recorded during the course of investigation, who inter-alia stated that the appellant company was incorporated in September, 1982 and the founder Directors were Ms. Dipti D. Ambani, daughter of Dhirubhai H. Ambani and Sh. Dinesh L. Seth. The Directors at the time of investigations were Dr. Tushar Motiwala, Sh. Aditya Anand Mitra and Sh. Prakash Beria. The issued, subscribed and paid up equity capital of the company is cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said aircraft shall be available to other parties or people only if RADAGPL does not require for their use. Para (f) of the agreement provides that the appellant shall be entitled to operate non-schedule flights by virtue of the permission given to it by DGCA and will accordingly, operate such flights. Further, para 3.1 of the said agreement states that appellant shall raise the monthly invoice or debit notes upon RADAGPL at such period as aforementioned. It further appeared that the appellant under the agreement with M/s Investec International Limited lessor, relating to dry lease agreement with the appellant, was required to pay total base rent of US$831,091on quarterly basis. This base rent corresponds to the lease agreement charged by the appellant from RADAGPL on quarterly basis. Thus, it appeared that the transaction between the appellant and the RADAGPL was not at arms length and in contravention to the condition of NSOP or service permit. It further appears that the said aircraft has not been used for the purpose it was imported namely non-schedule passenger flight, but has been used for personal use or for promoting their own business. It further appeared that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice was adjudicated on contest. Dropping the charge of undervaluation order of confiscation was passed with option to redeem on payment of fine of ₹ 30 crores. Further, reduced duty of ₹ 35,78,01,888/- was confirmed in terms of undertaking given at the time of import and the aircraft was released provisionally, order of invocation of Bank Guarantee furnished at the time of provisional release was made. Further, held that no duty was demandable under Section 28 of the Customs Act. Further, penalty of ₹ 10 crores was imposed on the appellant under Section 112(a) of the Act. Further penalty of ₹ 10 lakhs each was imposed on Sh. Ramesh A. Thadani, Sh. Robin Kumar Sharma under Section 112(a) read with Section 140 of the Act. Proceedings initiated against other co-noticees was dropped. 10. Being aggrieved, the appellant preferred appeal before this Tribunal. It is recorded in the stay order dated 21.03.2011, that the appellant have furnished Bank Guarantee of ₹ 36,82,50,371/- which was alive and accordingly appellant was directed to keep the said Bank Guarantee alive till disposal of the appeal. It is stated by the ld. Counsel that the said Bank G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 21/2002 stood amended by Notification No. 61/2007, which provided for exemption of additional duty of customs also. 11.4 It is further submitted that admittedly appellant has used the said aircraft only for providing non-scheduled charter services and thus complied with Condition No. (ii)(a). According to the impugned order, the appellant violated the alleged post import condition, namely, that the aircraft was not used for the purpose for which it was alleged to be imported and the said aircraft was used as a private aircraft. Ld. Commissioner has dropped all other charges in the show cause notice and have denied exemption on the sole ground that the appellant have used the said aircraft as a private aircraft and not for NSOP, for want of issuance of tickets to the passenger(s). 11.5 It is further urged that the permit granted by the DGCA for NSOP allows the operator/ appellant to conduct the non-schedule operation for transportation by air and pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9) ELT 235 (Tri. Mumbai). Accordingly, ld. Counsel for the appellant prays for allowing their appeal by setting aside the impugned order and for return of their Bank Guarantee, duly discharged. 11.11 It is further urged that ld. Commissioner had erred by travelling beyond the scope of show cause notice by demanding duty by enforcement of the bond. Admittedly, the show cause notice demanded duty under Section 28 of the Act and the same have been held as not applicable by the ld. Commissioner. The only option with the ld. Commissioner was to drop the proceedings and/ or the proposed demand. It is settled position of law that the adjudicating authority cannot travel beyond the scope of the show cause notice. Thus, the impugned order is liable to be set aside. Reliance is placed on the ruling of the Hon ble Supreme Court in the case of CCE, Nagpur vs. Ballarpur Industries Ltd. 2007 (215) ELT 489 (SC), on this proposition. 11.12 It is further urged that for recovery of any amount by enforcement of bond, ld. Commissioner of Custom is not empowered and to enforce such a demand is by adopting legal proceedings in a Court of law. Ld. Counsel placed reliance on the ruling of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go Charter Pvt. Limited and under such agreement it parted with the possession of the helicopter / aircraft to Heligo Charter Pvt. Limited. The said Heligo Charter was taking care of maintenance, repair and operation, payment of salaries to the crew members, etc. etc. Further, on enquiry by Revenue the said King Rotors Air Charter could not submit any documentary evidence of end use of the helicopter. Further, in the course of enquiry from the copies of passenger manifest, document evidencing payment of lease amount to the lessor -supplier of the helicopter, and copy of agreement with Heligo Charter, it was found that actually Heligo Charter was engaged in providing helicopter services to other company as NSOP, on a charter basis. The said Heligo Charter was maintaining log book, including approval from the DGCA, payment to the crew, paying for fuel bill, etc. Further, King Rotors could not furnish any letter from DGCA as to the compliance of the licensing condition as a NSOP. 14. We find that such facts are not obtaining in the facts of the present case and the facts herein are at variance and as such the reference to the Larger Bench hereinabove has got no relevance for deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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