Custom
TRT-2025-
Cestat New Delhi
Date:-19-01-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 19 January 2023
Parties: Bharat Hotels, Ms. Jyotsna Suri, and Mr. Madhav Sikka Vs Commissioner of Customs (Preventive)
Facts –
- The Appellant, Bharat Hotels, had imported aircraft claiming customs duty exemption under Notification No. 61 of 2017 dated 03.05.2007. Due to time taken by DGCA for renewal of the permit, the aircraft used for non-revenue purposes for the period from 06.02.2008 to 18.06.2008.
- A show cause notice was issued alleging that the appellant had used the aircraft for charter purposes only for fifty hours out of the total 244.9 flown hours and, therefore, the appellant had violated Condition No. 104 of the exemption notification which provides Nil rate of duty on import of aircraft for non-scheduled (passenger) services as well as non-scheduled (charter) services.
- The same was confiscated under section 111(0) of the Customs Act 19624 with an option to redeem the same. Imposed penalty on the appellant, its Chairman and Senior Vice President.
Issue –
- Whether there has been any violation of Condition No. 104 of the exemption notification?
Order –
- The Tribunal held that private non-revenue flights undertaken by the aircraft for the Chairman and other employees are private flights and though such flight may be permissible under the Civil Aviation Law but the same cannot be interpreted to be also permissible under the provisions of the exemption notification.
- The Larger Bench held that even if it is assumed that some flights had been conducted for carriage or persons without remuneration, it would still be a public transport aircraft and not a private transport aircraft, and the use of the aircraft by the Chairman/Managing Director for non-revenue purpose would not make the aircraft a private aircraft.
- The demand can be made under the undertaking only when DGCA finds that the use of the aircraft is not in accordance with the permit granted by the DGCA. In the present case, DGCA has not initiated any proceedings against the appellant and in fact has renewed the permit from time to time.
- Once it is held that the demand could not have been confirmed, the penalties imposed upon the Chairman/Managing Director and the Vice President of the appellant cannot also be sustained.
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