TMI Blog2020 (1) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ic. Since the undertaking has been given for using the imported aircraft for NSOP/C services published tariff to the public is still the mandatory requirement. Clause 2 of condition no. 104 of notification no. 21/2002 as amended by 61/2007, lays down the requirement that the importer has to furnish the undertaking to the Customs Department to use the imported aircraft only for an avowed purpose. As mentioned in the said undertaking, the purpose of such undertaking is to avail the exemption of customs duty which otherwise were to be paid to the Customs Department except in case of the use of the imported aircraft for the specific purpose in a specified manner as mentioned in the said undertaking. It becomes absolutely clear that any breach of such undertaking will definitely be actionable. The furnishing of undertaking by the importer to the Ministry of Civil Aviation (DGCA) to make the specific use i.e. NSOP/C of the said aircraft is sufficient to permit the import of the aircraft, that too with exemption from payment of customs duty. This undertaking binds the importer that he shall use the aircraft for NSOP/C. This indicates that the said use of the aircraft will be possibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has been claimed by giving an undertaking whereupon the appellant has failed to stand with the possibility of intent of the appellant to evade said duty at the time of import of the aircraft cannot be ruled out especially when there is no evidence produced on record by the appellant. There are no ambiguity or infirmity in the order under challenge - appeal dismissed. - Customs Appeal No. 558 of 2010 - Final Order No. 50094/2020 - Dated:- 14-1-2020 - HON BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) AND HON BLE Ms. RACHNA GUPTA, MEMBER (JUDICIAL) Mr. Narender M. Sharma And Ms. Anandita Saha, Advocates for the appellant Mr. Rakesh Kumar, Authorised Representative for the Respondent ORDER RACHNA GUPTA 1. The order in original no. 20-Commr-HKC-2010 dated 27.07.2010 has been assailed vide present appeal. The relevant facts in brief for the purpose are that M/s. East India Hotels Ltd. imported a new aircraft, Hawker 850 XP vide Bill of Entry no. 218981 dated 21.05.2007 with the declared value of ₹ 56.15 crores. The appellant availed an exemption from payment of customs duty under notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per officer under the provisions of the Act. 5. Learned Counsel in addition has submitted that the impugned aircraft was provisionally released after EIH Ltd. furnished a bond of ₹ 56,15,42,299/- and the Bank Guarantee of ₹ 14,03,85,600/- dated 5.7.2008 in compliance of the stay order of this Tribunal dated 1.4.2011. The said Bank Guarantee is still alive and is valid upto 31.3.2020. The same is liable to be released. Learned Counsel has brought to the notice that an order has been passed by this Tribunal in Reliance Transportation and Travel Ltd. vs. CCE New Delhi in appeal no. C/497/2010-Cus (DB) dated 15.10.2018. The Tribunal has held that Reliance Transportation and Travel Ltd. (RTTL) had rightly availed the benefit of exemption and concession of notification no. 21/2002-Cus read with notification no. 61/2007-Cus as amended. The appeal of RTTL has been allowed by the coordinate bench of this Tribunal by setting aside the order in original passed by the adjudicating authority. It is submitted that the facts of the present case are absolutely identical to RTTL case. Appellant has prayed that the similar order may be passed in the present case as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of exemption notification has been denied to the assessee on account of furnishing wrong undertaking to DGCA in compliance of condition no. 104 of the said notification. After having heard the rivals contention of both the parties and perusing the entire record as well as the relevant statutory provisions, we opine that the moot controversy to be adjudicated in this case is:- Whether the appellant herein has violated condition no. 104 (under sl. No. 347 N) of notification no. 21/2002-Cus as amended by notification no. 61/2007-Cus while importing an aircraft vide B/E No. 218981 dated 21.05.2007 by not complying with the undertaking as was given to DGCA at the time of said import. 7. Foremost requirement for the purpose is to have a look on the impugned notification which is as follows: (i) The aircraft are 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 (ii) The importer furnishes an undertaking to the Deputy Commissioner of Customs or Asstt. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by Ministry of Civil Aviation. 9. The minimum requirements for grant of permit as mentioned above, Ministry of Civil Aviation has to relate to: a. Civil Aviation Requirement Rules. Perusal of these rules, section 3 precisely, clarifies that while issuing the permit to a non scheduled operator, he has to clarify as to whether the aircraft is to be used in private category or as a non-scheduled operator. This article therefore clarifies that NSOP is different from the private aircraft operator. b. This observation further stands clarified from air transport circular no. 998 dated 21.4.1998 which makes a specific categorisation of NSOP/C flight into following: i. International Cargo Freight ii. Non Revenue passenger charter flight: a. Private aircraft owned by individuals b. Private aircraft owned by companies / corporations iii. Aircraft belonging to non scheduled / scheduled operators. c. Further, Rule 3(43) of Aircraft Rules 1937 defines the private aircraft as an aircraft other than the public / passenger transport. d. Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under the impugned notification condition no. 104 to avail the benefit of exemption from payment of customs duty, any of these operators may import an aircraft, however the exemption under Notification No.21/2002-Cus dated 01.03.2002 as amended is available only to SOP and NSOP/C and that to private operators. Scheduled air transport (SOP) services is defined under Rule 3 (49) which is para materia to clause 3.2 of Civil Aviation Rules which says that it is the air transport services undertaken between the two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, each flight being open to use by members of the public. Aircraft rules define non scheduled air transport services is under Rule 3(49) of Aircraft Rules which is para materia to clause 3.3 of CAR to mean air transport service other than scheduled air transport service being operated for carriage of passengers, mail and goods and includes charter operations. Word air transport has also been defined In Rule 43 of Aircraft Rules to mean all carriage of person effected by aircraft for a remuneration in any nature whats ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded to him at the time he importered the aircraft. The DR has relied upon the King Rotors Air Charter Case (Supra). 15. Per contra it is the case of the appellant that there is no violation of the said undertaking as the competent authority i.e. DGCA is renewing the permit given to the appellant from time to time. While laying this emphasis learned counsel has re-impressed upon the case of Sameer Gahlot (Supra). 16. We observe that both these decisions are diagonally contrast decision rendered by two coordinate benches of this Tribunal due to which a reference was made for the matter to be considered by the Larger Bench. However, before Larger Bench could take into consideration the impugned controversy that the pendency of another appeal titled as CC Mumbai Vs. Global Vectra Helicorp Ltd. 2016 (332) ELT A188 (SC) involving the same issue of violation of the undertaking given in furtherance of notification no. 61/2007-Cus dated 3.5.2007 before the Hon ble Supreme Court was brought to the notice and the Larger Bench thus kept the issue pending till the decision of the Hon ble Apex court. However, subsequently the Division Bench of this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases are very much different from the facts o the present case, the earlier cases being prior the amendment of year 2010 and the present one being post amendment in CAR. The issue in the earlier cases is as to whether undertaking for using the aircraft for non-scheduled operator services includes the use thereof for non-scheduled charter services. The amendment of CAR 2010 clarifies that both are inclusive. The issue in the present case primarily is whether the undertaking for using the imported aircraft of non-scheduled passenger / charter services includes the use thereof only for private purposes or not. 20. Reverting back to the present case, since the undertaking has been given for using the imported aircraft for NSOP/C services published tariff to the public is still the mandatory requirement. Clause 2 of condition no. 104 of notification no. 21/2002 as amended by 61/2007, lays down the requirement that the importer has to furnish the undertaking to the Customs Department to use the imported aircraft only for an avowed purpose. As mentioned in the said undertaking, the purpose of such undertaking is to avail the exemption of customs duty which otherwise wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n should also be rigid unless and until is required for the intent of legislature. The exemptions from payment of customs duty are granted to the importers with the sole object of extending some benefit to the public at large. Otherwise there seems no reason to have any such exemption clause to air transport service operators. As already discussed above private operators have been differentiated from the scheduled / non scheduled air transport passenger services. Thus we are of firm opinion that any usage of imported aircraft, if amounts to private usage of the said aircraft though under the guise of it being non scheduled NSOP/C air transport services, the same shall definitely be in violation of the undertaking as furnished under condition no. 104 of the impugned notification. Since in absence of the said undertaking the importer was liable to pay customs duty while importing the aircraft, the violation of the undertaking subsequent thereto shall definitely be a case of non payment of customs duty. We therefore, hold that the Customs Department has committed no error while initiating the investigation the Commissioner (Preventive) has committed no error while confirming the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that such power does not by itself preclude the Customs Authority from doing verification on their part. 25. In the present case, neither the Civil Aviation Rules nor Aircraft Rules empower DGCA to investigate about the compliance of the undertaking. The undertaking is given in furtherance of the notification issued by the Customs Department in compliance of the Statutory Provisions of the Customs Act 1962. The verification as to whether the benefit of exemption from payment of customs duty should continue or not is opined definitely to lie with Customs Department only. 26. In the facts of the present case we observe that the appellant has imported Hawker 850 XP aircraft pursuant to the permission / no objection certificate give by the Ministry of Civil aviation vide B/E No. 21898 dated 21.5.2007. The undertaking as is required under the impugned notification was furnished by the importer appellant on 22.5.2007 to the effect that the aircraft once imported would only be used for providing non scheduled air transport services (passenger only). No doubt the permit is renewed from time to time. It was specifically stated in the undertaking as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he public on a regular basis over a period of time. The expression person included company which also forms part of the general public. Further, printing of tickets was not the essential requirement of the Notification. Therefore, denial of benefit of Notification no. 21/2002-Cus as amended by Notification no. 61/2007-Cus on the ground that imported helicopters were not used in providing non-scheduled passenger services and no printing tickets issued, could not be justified. 28. The Department s circular that the benefit of notification is still available if the aircraft is providing NSOP/C certificate to the related or group company the same also doesn t hold good in the present case because there is no evidence about anyone else except the Oberoi Group to have used the impugned aircraft in the given circumstances that too without any tariff. The usage, of the impugned aircraft post import is not for non scheduled passenger/ charter air transport services but only for private use. The same amount to violation of the undertaking based upon which the exemption was granted to the appellant from paying the customs duty. Consequent to the said violation the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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