TMI Blog2022 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Hotels it was found not to apply to the facts of the case. Reliance can be placed in the case of ivision bench of the Tribunal in COMMR. OF CUS. (IMPORT) , ACC, MUMBAI VERSUS AIRMID AVIATION PVT. LTD. [ 2020 (3) TMI 922 - CESTAT MUMBAI ] , that was decided on 11.09.2019, considered the entitlement of the aircraft operator for continuance of exemption from duties of customs that had been allowed on import of aircraft against the undertaking given by the operator for complying with the condition of operating non-scheduled (passenger) service, though the aircraft was deployed on charter hire and was considered to be a private aircraft by the department. The adjudicating authority concluded that non issue of tickets to employees of group companies, or even pre dominant use by group companies for their employees did not reduce the aircraft to a private aircraft and that offering of the imported aircraft on charter was not violative of the condition for exemption - The Tribunal, after noticing the earlier division bench decisions of the Tribunal in Sameer Gehlot and Reliance Transport on the one hand, and King Rotors on the other, dismissed the appeal filed by department an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and an undertaking by the importer to the customs authority that the aircraft would be used only for non-scheduled (passenger) services and that the operator would pay on demand, in the event of his failure to use the aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under the notification. Thus, if a service is covered by air transport service defined in rule 3(9) of the Aircraft Rules and is other than scheduled (passenger) air transport service defined in rule 3(49), it would be a non-scheduled (passenger) service within the meaning of clause (b) of the Explanation to Condition No. 104 of the exemption notification. Whether the aircraft was used by the appellants only for providing non-scheduled (passenger) services as defined in clause (b) of the Explanation to Condition No. 104 of the exemption notification? - HELD THAT:- Non-scheduled (charter) services have been defined in clause (c) to mean services provided by a non-scheduled (charter) air transport operator, for charter or hire of an aircraft to any person, with a published tariff, and who is registered with and approved by DGCA for such purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gehlot had been rendered per incuriam as neither it was pointed out that provisions of a Statue or a judicial authority of binding nature had been ignored. Infact, as noticed above, all that the division bench in King Rotors observed was that the post importation nature of the subjects of undertakings was not appreciated by the bench . Analysis of the division bench decisions - HELD THAT:- A perusal of the order passed in East India Hotels would indicate that the aircraft had been purchased by East India Hotels on 21.05.2007 and the show cause notice alleging violation of the conditions of the exemption notification was issued on 27.06.2008. This show cause notice was, however, adjudicated upon by order dated 27.07.2010. Thus, it would be the CAR 1999 that would be applicable and not CAR 2010. The two decisions in Sameer Gehlot and King Rotors could not, therefore, have been distinguished for the reason that CAR 2010 would apply and not CAR 1999. The conclusion, therefore, that emerges is that King Rotors does not lay down the correct position of law. The appeals may now be listed before the regular division bench for hearing. - CUSTOMS APPEAL NO. 74 of 2010 - INTERM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption notification should be available to such an importer of an aircraft, came up before division benches of the Tribunal orders were passed to connect them with Customs Appeal No. 74 of 2010. This is how all the aforesaid Customs Appeals have been placed before this larger bench. It needs to be stated that in Customs Appeal No. 338 of 2009, which is pending before the Principal Bench of the Tribunal at Delhi, submissions have been advanced as an intervenor. 3. The exemption notification dated 03.05.2007, on which revolves the entire controversy, grants nil rate of duty on import of aircraft for non-scheduled (passenger) services as well as non-scheduled (charter) services subject to Condition No. 104 that is required to be fulfilled by an importer of the aircraft for availing the benefit of the exemption notification. The relevant portion of the said exemption notification is reproduced below: In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... published tariff, and who is registered with and approved 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; Provided that such air charter operator is a dedicated company or partnership firm for the above purposes. 4. A perusal of Condition No. 104 would show that at the stage of import, the importer should have an approval from the competent authority in the Ministry of Civil Aviation, MCA and the importer should, at the time of importation, also furnish an undertaking to the customs authority that the aircraft will be used for the specified services, namely non-scheduled (passenger) services or non-scheduled (charter) services. The undertaking should also state that the importer shall pay on demand, the duty payable, in the event of his failure to use the imported aircraft for the specified purpose. 5. The appellants hold permits provided by DGCA for non-scheduled (passenger) services. These permits have been renewed from time to time and have been endorsed for each additional aircraft/helicopter imported by the appellants. Such operations have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraphs of the decision of the Tribunal are reproduced below: 10. The impugned exemption under consideration before us has only pre-import Conditions and there is no separate post-import Condition. The pre-import Conditions requiring an approval from DGCA and an undertaking to be furnished at the time of importation have already been fulfilled and thereafter, the exemption has been granted at the time of import. The respondents, therefore, cannot be charged with violation of a pre-import Condition at a later point of time. If the Government wanted that the customs authorities should monitor the subsequent use of the aircraft, then it would have provided a suitable post-import Condition in the exemption notification. Of course, the Department can proceed in terms of the undertaking executed for violation of the terms of the undertaking but that has not been done in this case. Rather a show-cause notice has been issued invoking Section 28 of the Customs Act, 1962 vide paragraphs 25 and 27 of the notice. It is settled law that Section 28 can be invoked only in the case of short-levy, non-levy and erroneous refund. Where an exemption has been allowed after the importer has fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are allowed such use. 13. As regards the requirement of published tariff for carrying out charter operations, the respondents have stated that firstly, this point was not raised in the show-cause notice but only taken up at the appeal stage and secondly, while defining non-scheduled (charter) services, published tariff has been referred to as one of the characteristics of charter services and not as a Condition of the exemption notification and further, they have submitted that the respondents have obtained the exemption as a non-scheduled (passenger) service operator for which they have received the necessary permit from the Civil Aviation authorities and which requires no published tariff. We are of the view that these submissions by the respondents have substance and in any case, the exemption obtained by them as an operator of non-scheduled (passenger) service, after receiving the necessary permit from the Civil Aviation authorities, does not require to be denied on account of not having a published tariff for the charter services undertaken by them. Moreover, this was also not a ground taken in the show-cause notice. (emphasis supplied) 8. In King Rotors, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Aircraft Act, the Aircraft Rules and any Orders, Directions or Requirements issued under the said Act and Rules.... One of the Requirements issued under Rule 133A of the Aircraft Rules is Charter CAR , and clause (2.1) thereof provides that This CAR is applicable to Non-scheduled Air Transport Services (Charter Operations) using twin-engined aeroplane having maximum seating capacity not exceeding nine seats excluding crew seats. Charter CAR cannot be applicable to the appellants twin-engined (vide Panchanama dated 11-9-2008) helicopter which is 13-seater (vide Annexure-1 to Permit No. 11/2006 dated 29-11-2006, No Objection for Import dated 13-3-2008 and clause (3.2) of Charter-Hire Agreement dated 14-4-2008). The applicable CAR is Passenger CAR . DGCA s No Objection for Import itself indicates the purpose for which aircraft is required , which is Non-scheduled Air Transport (Passenger) Services . DGCA s covering letter dated 13-3-2008 says: This office has No Objection to the import of One Bell-412 helicopter S.No. 36454 for Non-scheduled Air Transport (Passenger) Services . Thus it is abundantly clear from the records that DGCA s permission to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y) . It is evident that the agreement created an exclusive right in Heligo for use of the helicopter during its tenure. That Heligo exercised this right for the benefit of third party companies is, in turn, evident from the written submissions dated 23-3-2011 filed by the appellants advocates, which read thus: xxxxxxxxxx 24.8 As Condition No. 104 itself refers to Rule 3 of the Aircraft Rules, 1937 in the context of defining the expression non-scheduled (passenger) services , it is permissible to take aid of the said Rule in ascertaining the connotation of the word passenger used in the expression non-scheduled (passenger) services . Rule 3(39) defines passenger aircraft as aircraft which effects public transport of passengers. Public transport is also seen defined under Rule 3(45). In the instant case, it is not the claim of the appellants that they used the helicopter for public transport of passengers. They only allowed Heligo to hire the aircraft for a remuneration and use it for transporting employees of Oil Gas/allied companies between Vishakapatnam airport and offshore oil/gas fields under contracts awarded to Heligo by those companies. The appellants were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the Conditions prescribed by them for import of the aircraft for Non-Scheduled (Charter) Services. Thus the matter is prima facie a case of divergence in perception between the stand of the Ministry of Civil Aviation and that of the Ministry of Finance. In the matter of Conditions regarding import, the stand of Ministry of Civil Aviation has to prevail over the stand of the Ministry of Finance. 10. This issue was again examined by a division bench of the Tribunal in Global Vectra Helicorp Ltd. vs. Commissioner of Cus. (Import), Mumbai, 2015 (329) E.L.T. 235 (Tri. Mumbai) that was decided on 29.04.2015. The division bench examined whether the importer of helicopters had breached Condition No. 104 rendering them liable for payment of duty on the import of two helicopters since they had previously claimed exemption in terms of the exemption notification. The division bench noticed that the operator had been granted permit by the DGCA to import helicopter for providing non-scheduled (passengers) services and that the department alleged that the assessee had not used these helicopters for providing the aforesaid services but for exclusive charters services for certain compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the services provided by the importer are in the nature of non-scheduled passenger service . Further relying on the ruling of the Apex Court in the case of Titan Medical (supra), we hold that in view of the clarification dated 8-8-2008, given by the licensing authority DGCA, while interpreting the importers permit, have clarified that the services offered by the appellant under its various contracts is within the scope of NSOP for passenger permit. DGCA being the appropriate licensing authority, is the best judge to decide as to whether the activity of the importer comes within the ambit of the license issued to the appellant by it. 7.1 Further, we find that in the case of the appellant unlike in the case of King Rotors case (supra), there is no surrender of the helicopter in question and all the activities as the service provider, such as maintenance/insurance, salaries to the Pilot, etc., have been carried out by the appellant-importer. Thus, the facts in this case are clearly distinguishable from the facts in the King Rotors case and as such, we hold that the learned Commissioner has erred in relying on the earlier ruling of the Tribunal in the case of King Ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 deciding the present appeal. Further, we note that Hon ble Supreme Court in the case of Collector v. Alnoori Tobacco Products - 2004 (170) E.L.T. 135 (S.C.) have held that in respect of following precedent, have observed that circumstantial - one additional or different facts may make a world of difference between conclusion in two cases. Disposal of cases by following settled precedent decision, is not proper. We further find that the contention raised by the Ld. AR for Revenue that the said aircraft was mainly used by the Directors, Executives and their close relatives, friends of RADAGPL is of no consequence as the CAR requirement under Section 3 of Air Transport Series Part III Issue II, dated 1-6-2010, which applies to the existin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.2019, considered the entitlement of the aircraft operator for continuance of exemption from duties of customs that had been allowed on import of aircraft against the undertaking given by the operator for complying with the condition of operating non-scheduled (passenger) service, though the aircraft was deployed on charter hire and was considered to be a private aircraft by the department. The adjudicating authority concluded that non issue of tickets to employees of group companies, or even pre dominant use by group companies for their employees did not reduce the aircraft to a private aircraft and that offering of the imported aircraft on charter was not violative of the condition for exemption. The Tribunal, after noticing the earlier division bench decisions of the Tribunal in Sameer Gehlot and Reliance Transport on the one hand, and King Rotors on the other, dismissed the appeal filed by department and observed as follows: 35. We take note that the impugned order has placed reliance on various clarifications issued by Director General of Civil Aviation. That these are in favour of the aircraft operators is not in dispute. The harmonious construct of the finding on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking for using the imported aircraft of non-scheduled passenger / charter services includes the use thereof only for private purposes or not. xxxxxxxxx 21. xxxxxxxxxx. It is definitely the Customs Department s duty to ensure continuous compliance of the undertaking as was furnished by the importer at the time of importing the aircraft. As already discussed above, the usage of aircraft for NSOP/C services continuously against the published tariff the passengers who are none but the public will satisfy the continuous compliance of the said undertaking. Absence of any of these Conditions will make the usage different from NSOP/C services and the said variation will definitely amount to violation of the said undertaking and the benefit of exemption from payment of customs duty as was extended to the importer of aircraft at the time of import thereof shall not be allowed to continue to still be available to the importer. xxxxxxxxxxx 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 Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) final impugned No. A/87028/2019 dated 11.9.2019 passed by the Customs, Excise Service Tax Appellate Tribunal, Mumbai, West Zonal Bench in Custom Appeal No.411 of 2011; and, (3) judgment and final order No. C/237-238/2011-CU(DB) dated 03.06.2011 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi in Appeal No. C/260/2010-C261/2010-CU(DB). Delay of 282 days in filing Civil Appeal Diary No.17296 of 2020 is condoned. We have heard Mr. Sanjay Jain, learned Additional Solicitor General in support of the appeals and learned counsel appearing for the assessees. We have gone through the statement of case filed on behalf of the appellant and do not find that the issues raised come within the four corners of Section 130-E of the Customs Act, 1962. We, therefore, do not see any reason to entertain these appeals in our jurisdiction under Section 130-E of the Customs Act, 1962. The civil appeals are, therefore, dismissed leaving all questions of law open to be agitated in an appropriate case. 16. It is stated that the appeal filed by the department against the decision rendered by the Tribunal in Global Vectra Helicorp is still pending disposal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, as agreed to the learned counsel for all the parties, the following questions of law are being framed: (i) Whether the reference made to the Larger Bench of the Tribunal has become infructuous by applying the principles of doctrine of merger as was held in Pernod Ricard India (P) Ltd. vs. C.C., 2010 (256) ELT 161 (SC) in view of dismissal of the Civil Appeal filed by the Revenue against the order of this Tribunal in Commissioner of Customs (Import General) vs. Reliance Transport Travel Ltd. 2020 (372) ELT A105 (S.C); Civil Appeal No. 87-87 of 2020 decided on 08.01.2020 (S.C.); (ii) Whether the appellant has violated one of the Conditions mentioned at serial no. 104 of notification no. 21/2002-Cus dated 01.03.2002, as amended by notification no. 61/2007-Cus dated 03.05.2007, in a case where pre-defined locations between the two or more places have not been published nor operated according to a published time- table as well when the time and place of departure/arrival is uncertain; (iii) Whether in terms of exemption notification, an Aircraft/Helicopter imported for non-scheduled operation passenger service can be used for non-scheduled charter service or vice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of aircraft was 3% / 12.5%. Subsequently, pursuant to the proposal made in the Finance Bill 2007, exemption notification no. 20/2009 dated 01.03.2007 was issued inserting Entry 346B and Condition No. 101 in the earlier exemption notification dated 01.03.2002, whereby, the effective rate of duty on import of aircraft for scheduled air transport service was made nil . No exemption was, however, granted to non-scheduled air transport service and private category aircraft. However, with the issuance of the exemption notification dated 03.05.2007, the effective rate of duty on the import of aircraft for non-scheduled air transport service was made nil . This exemption notification was as a consequence of the statement made by the Hon ble Finance Minister in the Parliament and it is reproduced: Honourable Members are aware that I had proposed to levy customs duty, CVD and additional customs duty on import of aircraft excluding imports by Government and scheduled airlines. Ministry of Civil Aviation has made a strong representation in favour of exemption for aircraft imported for training purposes by flying clubs and institutes and for non-scheduled point-to-point and non-sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public. 29. The term scheduled (passenger) air transport services has to be interpreted according to this definition, and applied to passenger travel in contradistinction to carriage of goods or mail. 30. Thus, if a service is covered by air transport service defined in rule 3(9) of the Aircraft Rules and is other than scheduled (passenger) air transport service defined in rule 3(49), it would be a non-scheduled (passenger) service within the meaning of clause (b) of the Explanation to Condition No. 104 of the exemption notification. 31. At the time when Condition No. 104 was inserted on 03.05.2007, Civil Aviation Requirement dated 08.10.1999, 1999 CAR dealing with non-scheduled (passenger) services as well as Civil Aviation Requirement dated 17.05.2000, 2000 CAR, dealing with scheduled (passenger) services, which had been issued under rule 133A of the Aircraft Rules, were in force. The expression non-scheduled air transport services (passenger) has been defined, both under the 1999 CAR as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat published tariff to the public is a mandatory requirement of non-scheduled (passenger) service and if the tariff is not published, the use of the aircraft would be for private use; (vii) There is no requirement of issuance of tickets for non-scheduled (passenger) service; (viii) The action of the customs authorities is without jurisdiction in view of the approval granted by the DGCA for import and renewal of permission from time to time for providing non-scheduled (passenger) services; and (ix) Civil Aviation Requirement dated 01.06.2010, 2010 CAR issued by the DGCA merely codify the earlier clarifications and the amended Explanation to the exemption notification and, therefore, has retrospective operation. In support of this contention reliance has been placed on the judgments of the Supreme Court in Zile Singh vs. State of Haryana, (2004) 8 SCC 1, Yogendra Nath Naskar vs. CIT, (1969) 1 SCC 555 and Sone Valley Portland Cement Co. Ltd. vs. The General Mining Syndicate Pvt. Ltd. (1976) 3 SCC 852. 34. Shri P.R.V. Ramanan and Shri Ajay Jain, learned special counsel appearing for the Department made the following submissions: (i) Questions nos. (ii), (iv) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than that covered by the permit is not correct. In support of this contention reliance has been placed on the decisions of the larger bench of the Tribunal in Bombay Hospital Trust vs. Commissioner of Customs, Sahar, Mumbai 2005 (189) E.L.T. 374 (Tri.-LB), and the decisions of the Tribunal Patel Engineering Ltd. vs. Commissioner of Customs (Import), Mumbai, 2013 (295) E.L.T. 243 (Tri. Mumbai) and Sheshank Sea Foods Pvt. Ltd. vs. Union of India 1996 (88) E.L.T. 626 (S.C.); (ix) 2010 CAR is prospective and does not have a retrospective operation; and (x) The division bench in King Rotors was justified in holding that the earlier decision of the division bench in Sameer Gehlot was rendered per incuriam. In any view of the matter, the contention of the appellants that division bench in King Rotors should have referred the matter to the larger bench of the Tribunal, gets addressed as the matter is now before the larger bench. 35. The submissions advanced by the learned counsel for the appellants and the learned counsel for the intervenor, as also the learned special counsel for the Department have been considered. DOCTRINE OF MERGER 36. Learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the order of the Supreme Court and, therefore, ceased to exist in the eye of law and that the order of the Supreme Court would amount to affirmation of the order passed by the High Court. It was, therefore, contended that the High Court could not entertain a prayer for review of its order, much less disturb the order in exercise of the review jurisdiction. The High Court overruled the preliminary objection. It is against this order that a Special Leave Petition was filed. The Supreme Court examined the doctrine of merger and observed that where an appeal is provided before a superior forum and the superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision of the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law. The Supreme Court also observed that an order refusing Special Leave to Appeal does not attract the doctrine of merger, but if the order refusing Leave to Appeal is a speaking order, then the statement of law contained in the order of the Supreme Court is a declaration of law by the Supreme Court, which would be bindi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de a party. A challenge to the constitutional validity of the Act cannot be considered or determined, in the absence of the concerned State. The learned counsel now prays for time to implead the State of Tamil Nadu. This appeal is of the year 1973. In our view it is neither necessary nor proper to allow this prayer at this distance of time. No other point survives in these appeals. Therefore, we dismiss these appeals, but without any order as to costs. (emphasis supplied) 43. The division bench of the High Court hearing the challenge to the constitutional validity of Act No. 2 of 1996 entertained doubts on the view taken by the earlier division bench of the High Court in Pillai and, therefore, referred the matter to a Full Bench of the High Court. When the Full Bench of the High Court took up the hearing of the writ petitions, the aforesaid order of the Supreme Court dated September 10, 1986 was brought to its notice. The Full Bench held that since the appeal against the decision of the division bench in Pillai was dismissed by the Supreme Court, the decision of the High Court merged in the order of the Supreme Court and so the Full Bench could not examine the correctne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement of law contained in the division bench judgment of the High Court in Pillai would continue to remain the decision of the High Court, binding as a precedent on subsequent Benches of coordinate or lesser strength but open to reconsideration by any Bench of the same High Court with a coram of judges more than two. The Supreme Court, it needs to be noted, also observed that the Full Bench of the High Court was not hearing a prayer for review of the order passed by the division bench in Pillai. Thus, a clear distinction had been drawn by the Supreme Court in cases when a larger bench is hearing a reference and when it is hearing a review petition after the dismissal of an Appeal by the Supreme Court. A review petition would not be maintainable before the High Court after the dismissal of the Appeal by the Supreme Court, but the decision can be reconsidered by a larger bench of the High Court if the Supreme Court had not adjudicated on the merits of the order of the High Court. The Supreme Court, therefore, set aside the order of the Full Bench of the High Court and restored the appeal before the Full Bench to be heard and decided in accordance with law. The relevant portions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction. (emphasis supplied). Recently a three-Judge Bench of this Court had an occasion to deal with doctrine of merger in Kunhayammed and Ors. v. State of Kerala and Anr., [2000] 6 SCC 359 and this Court reiterated that the doctrine of merger is not of universal or unlimited application; the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid, shall have to be kept in view, (emphasis supplied). In this view of the law, it cannot be said that the decision of this Court dated 10.9.1986 had the effect of resulting in merger into the order of this Court as regard the statement of law or the reasons recorded by the Division Bench of the High Court in its impugned order. The contents of the order of this Court clearly reveal that neither the merits of the order of the High Court nor the reasons recorded therein nor the law laid down thereby were gone into nor they could have been gone into. 12. Thirdly , as we have already indicated, in the present round of litigation, the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for rejection, the mere rejection by a superior forum, resulting in refusal of exercise of its jurisdiction which was invoked, could not by itself be construed as the imprimatur of the superior forum on the correctness of the decisions sought to be appealed against. In Supreme Court Employees Welfare Association v. Union of India and Ors. AIR (1990) SC 334 this Court observed that a summary dismissal, without laying down any law, is not a declaration of law envisaged by Article 141 of the Constitution. When reasons are given, the decision of the Supreme Court becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. When no reason are given, a dismissal simpliciter is not a declaration of law by the Supreme Court under Article 141 of the Constitution. In Indian Oil Corporation Ltd. v. State of Bihar and Ors., AIR (1986) SC 1780 this Court observed that the questions which can be said to have been decided by this Court expressly, implicitly or even constructively, cannot be re-opened in subsequent proceedings; but neither on the principle of res judicata n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pen to reconsideration by any bench of the same High Court with a coram of judges more than two. 18. The Full Bench was not dealing with a prayer for review of the earlier decision of the Division Bench in M. Varadaraja Pillai's case and for setting it aside. Had it been so, a different question would have arisen, namely, whether another Division Bench or a Full Bench had jurisdiction or competence to review an earlier Division Bench decision of that particular Court and whether it could be treated as affirmed, for whatsoever reasons, by the Supreme Court on a plea that in view of the decision having been dealt with by the Supreme Court the decision of the High Court was no longer available to be reviewed. We need not here go into the question, whether it was a case of review, or whether the review application should have been filed in the High Court or Supreme Court. Such a question is not arising before us. 19. Under Article 141 of the Constitution, it is the law declared by the Supreme Court, which is binding on all Courts within the territory of India. Inasmuch as no law was declared by this Court, the Full Bench was not precluded from going into the question of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reasoning of the High Court was not accepted by the Supreme Court and it was held that the order of the Board had not merged in the order of the High Court since the revision was dismissed on the ground of rejection of the application filed for condonation of delay and not on merits. The observation are as follows :- 20. It is clear that the Board vide its order dated 13-6-1985 held that the respondents were not liable to surrender any land. However, it cannot be said that the aforesaid order has merged with the order of the High Court dismissing the Revision petition of the appellant State as the same was dismissed on the ground of rejection of the application for condonation of delay and not on merits. 21. In this connection, the decision of this Court in S. Kalawati vs. Durga Prasad (1976) 1 SCC 696 may be strongly relied upon. In paragraph 7 of the said decision, this Court observed as follows: (SSC p. 699). 7. The principle behind the majority of the decisions is thus to the effect that where an appeal is dismissed on the preliminary ground that it was not competent or for non- prosecution or for any other reason the appeal is not entertained, the decision canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court, whether by a speaking order or non speaking order, the doctrine of merger does apply, unlike in the case of dismissal of special leave to appeal under Article 136 of the Constitution by a non-speaking order. 49. It needs to be noted that while deciding the Civil Appeal filed by the Department against the decision of the Tribunal Reliance Transport, the Supreme Court had not expressed any view on the reasons given by the Tribunal as it merely observed that the appeal, being devoid of any merit, has to be dismissed. As noticed above, the Supreme Court in Nadar had explained what part of the order would merge in the order of the Supreme Court. The Supreme Court pointed out that since the reasons recorded by the High Court nor the law laid down had been dealt with by the Supreme Court, the statement of law contained in the division bench judgment of the High Court would continue to remain the decision of the High Court. Only the operative part of the order of the division bench stood merged in the decision of the Supreme Court and the remaining part of the order of the division bench of the High Court cannot be said to have merged in the order of the Supreme Court nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Explanation to Condition No. 104 of the exemption notification. 54. Non-scheduled (passenger) services has been defined in the aforesaid clause (b) to mean air transport services other than scheduled (passenger) air transport services as defined in rule 3 of the Aircraft Rules. Thus, what has to be seen is whether the use of the aircraft satisfies the following two requirements of clause (b): (i) the use should be for air transport service; and (ii) such air transport service should be other than scheduled (passenger) air transport service as defined in rule 3 of the Aircraft Rules. 55. Air transport service has been defined in rule 3 (9) of the Aircraft Rules to mean service for transport by air of persons for any kind of remuneration whatsoever. There is no dispute that the appellants have used the aircraft for the transport of persons for remuneration. There is no stipulation or restriction or a condition in the said definition that a tariff should be published or that such service should be rendered only on per-seat basis and not by chartering or about the category or class of persons to be transported. Thus, the contention of the department that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide non-scheduled (charter) service only if the service satisfies the requirements of clause (c). The appellants are not registered and approved with DGCA as non-scheduled (charter) air transport operator and in some cases there is no published tariff. The appellants, therefore, cannot be said to have provided non-scheduled (charter) services as defined in clause (c). 61. The appellants have, therefore, provided non-scheduled (passenger) services, as defined in clause (b) of the Explanation to the exemption notification. Non-scheduled (passenger) operator can carry out charter service 62. It would now have to be seen whether there is any restriction or prohibition against providing air transport service by way of charter of aircraft, while providing non-scheduled (passenger) services. 63. As noticed above, the definitions of air transport service and non-scheduled (passenger) service do not stipulate any restriction or impose a condition that such service should be rendered only on per-seat basis and not by chartering nor is there any stipulation in CAR 1999 issued by DGCA for grant of permits to operate non-scheduled air transport (passenger) services. In fact pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air transport service only means that air transport service which has the essential features mentioned in the definition in rule 3 (49) of Aircraft Rules, namely, it must be undertaken between the same two or more places, operated according to a time table or with flights so regular or frequent that they constitute a recognizable systematic series, each flight being open to use by the members of the public ; and (c) If a service is covered by air transport service defined in rule 3(9) and is other than scheduled (passenger) air transport service defined in rule 3(49), it is a non-scheduled (passenger) service within the meaning of clause (b) of the Explanation to the exemption notification. 66. It needs to be noticed that Condition No. 104 specifically refers to the definitions contained in the Aircraft Rules as also Civil Aviation Requirements issued under the provisions of rule 133A of the Aircraft Rules. Both, CAR 1999 that deals with non-scheduled (passenger) services operator and CAR 2000 that deals with non-scheduled (charter) services operator define a non-scheduled air transport services (passenger) in the same manner as defined in clause (b) of the Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s registered under the non-scheduled (charter) category. What needs to be noticed is that the exemption is available to both non-scheduled (passenger) services and non-scheduled (charter) service and neither the exemption notification nor the Aircraft Rules or Civil Aviation Requirements excludes charter operations from the ambit of non-scheduled (passenger) services. 73. The provisions of CAR 1999 and CAR 2000 do indicate that CAR 2000 was issued for charter operation only so as to provide some relaxation to smaller aircrafts. Pre-dominantly, the two contain identical provisions with the exception that the CAR 2000 contains some relaxed provisions meant for smaller aircraft, as can be noticed while comparing the provisions of the two Civil Aviation Requirements:- Particulars Non-scheduled (passenger) service Non-scheduled (charter) service Applicability and Scope Applies to all aircraft without restriction on the type and seating capacity of the aircraft. (paragraph 5.1) Restricted to small aircraft not exceeding sitting capacity of 9 seats. (Paragraph 2 and Paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption notification. The use of the term only signifies that the use of the aircraft is restricted to non-scheduled (passenger) services or non-scheduled (charter) services and the use for any other purpose would not be permissible for the claiming exemption. As a non-scheduled (charter) permit holder cannot carry out passenger operations , the expression as the case may be has been used and it would not mean that a non-scheduled (passenger) permit holder cannot carry out charter operations. 76. In this connection, it would be pertinent to refer to the clarifications issued by DGCA for non-scheduled (passenger) services operator. The letter dated 08.08.2008 issued by DGCA states that a non-scheduled (passenger) permit holder can conduct charter operations and such operations would be within the purview of the non-scheduled (passenger) services permit holders. The relevant portion of the clarification is as under: The non-scheduled operators permit entitles the permit holder to use the aircraft for hire and reward i.e. for commercial activity. This may include per seat hiring of the aircraft or a full aircraft charter. The NSOP holder may also enter into a long or sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owered to issue Civil Aviation Requirements under rule 133A of the Aircraft Rules. Thus, charter operations can be carried out by a permit holder of non-scheduled (passenger) services. 80. Learned counsel for the appellants have also submitted that in fact DGCA has amalgamated CAR 1999 and CAR 2000 into CAR 2010. This CAR 2010 has restated and codified the earlier position stated by DGCA through clarifications and is explanatory in nature. It is, therefore, the submission that for this reason also a non-scheduled (passenger) service operator can carry out charter operations. 81. A perusal of paragraph 1 dealing with introduction does indicate that the CAR 1999 and CAR 2000 have been amalgamated and a uniform code for operation non-scheduled air transport services has been laid down. The relevant paragraphs of CAR 2010 are reproduced below: 2.4 The carriage of passengers by a non-scheduled operator s permit holder may be performed on per seat basis or by way of chartering the whole aircraft on per flight basis, or both. There is no bar on the same aircraft being used for either purpose as per the requirement of customers from time to time. The operator is also free to op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether, non publication of tariff is violative of Explanation (c) of Condition No. 104 83. Learned special counsel for the department placed reliance on the definition of non-scheduled (charter) services contained in Explanation (c) of Condition No. 104 to the exemption notification to contend that the condition of the exemption notification has not been fulfilled by the appellant. 84. Learned counsel appearing for the appellants submitted that it is only while defining non-scheduled (charter) services that reference has been made to published tariff and, therefore, it cannot be termed as a condition to the exemption notification. The submission is that while defining non-scheduled (passenger) services in clause (b) of the Explanation, there is no requirement of having a published tariff. 85. The submission advanced by learned counsel for the appellants deserves to be accepted. Merely because the appellants can also conduct charter operations would not mean that the appellant would becomes a non-scheduled (charter) permit holder and consequently required to have a published tariff. The definition of non-scheduled (passenger) service given in clause (b) of the Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with. 88. Learned special counsel for the appearing for the department submitted that the aircraft is being provided for private use and is not available to use by the public. 89. Learned counsel for the appellants submitted that the aircraft is available not only to group companies but also to other customers. 90. In the first instance, personnel of companies which are group companies of the appellant are also members of public. The aircraft is, therefore, available for used by the public. Even otherwise, this cannot be a reason to hold that the air transport service provided by the appellants would fall outside the scope of non-scheduled (passenger) service. Whether the customs authorities have the jurisdiction to decide violation of the exemption notification 91. A perusal of the exemption notification clearly shows that it merely requires the conditions set out by the DGCA and the conditions imposed by the Civil Aviation Ministry be complied with for the operations of the non-scheduled operators. It, therefore, follows that it should be the jurisdictional authorities under the Civil Aviation Ministry which alone can monitor the compliance. As stated above in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emicals Ltd. vs. State of Andhra Pradesh 2005 (192) E.L.T. 33 (S.C.). 94. Learned special counsel appearing for the department has however placed reliance upon the decision of a larger bench of the Tribunal in Bombay Hospital Trust vs. Commissioner of Customs, Sahar, Mumbai 2005 (188) E.L.T. 374 (Tri.-LB), and also division bench decision of the Tribunal in Patel Engineering Ltd. vs. Commissioner of Customs (Import), Mumbai 2013 (295) E.L.T. 243 (Tri.- Mumbai). Learned special counsel for the department also placed reliance upon the decision of the Supreme Court in Sheshank Sea Foods Pvt. Ltd. vs. Union of India 1996 (88) E.L.T. 626 (S.C.). 95. In Titan Medical Systems, by an exemption notification, certain goods which were imported into India against an advanced licence for the purpose of manufacture were exempted from duty of customs. A show cause notice was, however, issued by the customs to show cause as to why penalty should not be imposed for not having complied with the conditions of the exemption notification. The Supreme Court found that the licencing authority had not taken steps to cancel the licence, and infact the licencing authority did not even claim tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the one hand and the Director General of Health Services on the other. This decision, therefore, does not help the respondents. It also needs to be noted that the decision of the larger bench of the Tribunal was delivered by a learned Member who had also delivered the decision of the Tribunal in Sameer Gehlot. The learned Member was, therefore, aware of the difference between the nature of conditions involved in the two cases. 97. In Patel Engineering Ltd., the undertaking was that the machinery shall be used exclusively for construction of roads and shall not be sold or disposed of in any manner for a period of five years from the date of import. The allegation was that the importer had diverted the machine to other entities before completion of the said period of five years. The verification of compliance of the undertaking was one purely of fact, namely whether the machine had been disposed of before expiry of five years. It was held that the customs had jurisdiction to verify the same. Such verification did not involve any interpretation of the provisions of another enactment. The said decision, therefore, would also not help the respondents. 98. In Sheshank Sea Foods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide that non-scheduled operator is not permitted to publish time schedule and issue tickets to passengers. There is, therefore, no obligation on the part of the appellants to issue tickets to passengers. 103. In any event, non-issuance of passenger ticket has not been considered by the competent authority under Ministry of Civil Aviation, namely Director General of Civil Aviation to mean that the appellants had not used the aircraft for non-schedule passenger service in terms of the permit issued by the said authority. 104. Under the Carriage by Air Act, 1972, the issuing of tickets is governed by the Second Schedule. Further, as per section 8 of the said Act, the Schedule will only be applicable to domestic carriage, once a notification is published applying the said provision to domestic carriage. In this regard, a notification dated 30.03.1973 was published in the Gazette, wherein Part I and II of Second Schedule dealing with the passenger tickets were not notified to apply to domestic carriage. Therefore, there is no requirement for issuing the tickets under the said Act for domestic carriage. In any event, in terms of paragraph 3 of the CAR 2000, no tickets are requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aircraft for the avowed purpose. Both are things to happen post-importation. This crucial aspect did not receive the attention of the Hon ble Bench when it took the view that the condition was only a pre-importation condition. xxxxxxxxxxxxx In Sameer Gehlot s case (AASPL s case), the post-importation nature of the subjects of undertaking was not appreciated by the Bench while taking the view that the requirement of undertaking to be made by the importer was a pre- importation condition. The mistake vitiated the decision. This is the reason why, with great respect, we consider the decision in AASPL s case as having been rendered per incuriam. (emphasis supplied) 107. It is, therefore, clear that the division bench examined Condition No. 104 of the exemption notification and proceeded to take a view which was at variance with the view taken by the earlier division bench in Sameer Gehlot. The division bench held that post importation nature of the subjects of undertaking was not appreciated by the bench while taking of the view that the requirement of undertaking to be made by the importer was pre-importation condition . According to the division bench this mist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A decision should not be treated as given per incuriam, however, simply because of a deficiency of parties, or because the court had not the benefit of the best argument, and as a general rule, the only cases in which decisions should be held to be given per incuriam are those given in ignorance of some consistent statue or binding authority. Even if a decision of the Court Appeal must follow its previous decision and leave the House of Lords of rectify the mistake. 112. In Babu Parasu Kaikadi (Dead) by Lrs. vs. Babu (Dead) Through Lrs. (2004) 1 Supreme Court Cases 681, the Supreme Court observed: 14. Having given our anxious thought, we are of the opinion that for the reasons stated hereinbefore, the decision of this Court in Dhondiram Tatoba Kadam having not noticed the earlier binding precedent of a coordinate Bench and having not considered the mandatory provisions as contained in Section 15 and 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent. 113. In Yeshbai vs. Ganpat Irappa Jangam AIR 1975 Bom 20: (1974) 76 BOMLR 278 , a Division Bench of the Bombay High Court observed: 27. Now, a precedent is not bind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question later, on the ground that a possible aspect of the matter was not considered or not raised before the Court or more aspects should have been gone into by the Court deciding the matter earlier but it would not be a reason to say that the decision was rendered per incuriam and liable to be ignored. The earlier judgment may seem to be not correct yet it will have the binding effect on the later bench of coordinate jurisdiction. Easy course of saying that earlier decision was rendered per incuriam is not permissible and the matter will have to be resolved only in two ways either to follow the earlier decision or refer the matter to a larger Bench to examine the issue, in case it is felt that earlier decision is not correct on merits. Though hardly necessary, we may however, refer to a few decisions on the above proposition. (emphasis supplied) 117. This position was reiterated by the Supreme Court in Central Board of Dawoodi Bohra Community vs. State of Maharashtra 2010 (254) ELT 196 (SC), Amrit Lakshmi Machine Works vs. CC (Import) 2014 (303) ELT 161 (Bom.), State of UP Anr. vs. Synthetic and Chemicals Ltd. Anr. (1991) 4 SCC 139 and Hyder Consulting (UK) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as charter services simultaneously. ******* 19. ******** Hence we are of the opinion that irrespective of pendency of issue related to this notification before the Hon ble Apex Court, the facts of these other cases are very much different from the facts of 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. (emphasis supplied) 122. A perusal of the order passed in East India Hotels would indicate that the aircraft had been purchased by East India Hotels on 21.05.2007 and the show cause notice alleging violation of the conditions of the exemption notification was issued on 27.06.2008. This show cause notice was, however, adjudicated upon by order dated 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
