TMI Blog2019 (11) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... at there should be a freight element attributable to such fuel in the tank. In other words, the aircraft did not transport the fuel as a cargo or goods for the purpose of freight. Such interpretation will be a result of hyper-technical approach to the facts of the case. Admittedly, the remanant fuel is construed to be an imported item for the purpose of Customs duty. In the importation of such remanant fuel, we could not discern any separate freight element, which can be added in the assessable value. The fuel in the tank is part of aircraft in operation. Fuel cost is calculated, and apparently, forms part of commercial consideration while fixing ticket charges for transporting aircraft. No freight element is attributable to fuel in the tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hary, Member (J) and P. Venkata Subba Rao, Member (T) Shri S. Guha, AR, for the Appellant. None, for the Respondent. ORDER [Order per : P.K. Choudhary, Member (J)]. - In these cases the Revenue has filed the instant appeals against Order-in-Appeal No. KOL/CUS (Air-Port)/AA/535/2018, dated 6-3-2018 passed by the Commissioner of Customs (Appeals), Kolkata. 2. The brief facts of the case are that the appellant is involved in flight operation from Kolkata to Dhaka and from Dhaka to Kolkata from NSSCBI Airport, Kolkata. The Aviation Turbine Fuel (hereinafter referred to as ATF ) in tank of the aircraft is recorded by engineers of the appellant at the time of conversion of the flight for international run as well as on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rways (India) Ltd. filed an appeal before the Learned Commissioner of Customs (Appeals), Kolkata. The Learned Commissioner (Appeals) has observed that the lower authority has charged the freight @ 20% of the invoice value on notional basis as per Rule 10 of Customs Valuation Rules, 2007. In this regard he found that the consumption of fuel depends on various factors and when the aircraft completes the inward journey to reach the Indian airport, certain quantity is leftover in the tanks of aircraft. Accordingly, the freight element is not attributable to such fuel as there is no transport of fuel as cargo for the levy of freight. In this regard, he found that the Tribunal in the case of M/s. Interglobe Aviation Ltd. v. Commissioner of Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor proper on the following grounds :- (i) That the Commissioner (Appeals), vide Order-in-Appeal Nos. KOL/CUS/(Air-Port)/AA/529/2018, dated 6-3-2018, KOL/CUS(Air-Port)/AA/535/2018, dated 6-3-2018 and KOL/CUS(Air-Port)/AA/536/2018, dated 6-3-2018, has decided the case without due consideration of the facts placed on record. Thus, the impugned order-in-appeal does not satisfy the test of being a reasoned order and is liable to be quashed. (ii) That the appellate Authority has failed to appreciate the evidence on record in proper perspective, and therefore the findings recorded by the appellate authority are improper and legally untenable. The appellate authority has failed to consider the material facts on record, legal provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dispute. However, its valuation, more specifically, addition of freight element on notional basis to arrive at the value of such ATF is in dispute. The Original Authority held that the remanant ATF is transported by the aircraft and as such, the actual freight is not ascertainable, a notional freight in terms of Rule 10(2) is to be added to arrive at the assessable value of ATF. We note that the aircraft requires ATF for its propulsion. As per the Civil Aviation Regulation requirements and also for safety, aircraft caries adequate amount of fuel in its flight. The consumption of fuel depends on various factors. Factually when the aircraft completes the inward journey to reach the Indian Airport, certain quantity of fuel is left in the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for Rule 10(2). We find that the Hon ble Supreme Court in Wipro Ltd., (2015) 14 SCC 161 = 2015-TIOL-79-SC-CUS = 2015 (319) E.L.T. 177 (S.C.), held that normally, the value of imported goods has to be the transactional value which means the price actually paid or payable for the goods imported. When the value of transaction could not be determined then the Rules are applied to arrive at the value. The endeavour is to have closest proximity with the actual price. Dealing with addition of loading and handing charges at 1% on notional basis as per Rule 9 of Valuation Rules, the Apex Court held that when the actual costs towards handling charges are available, notional addition is not legally tenable. It was held to be violative of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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