Custom
TRT-2025-
Cestat New Delhi
Date:-08-09-22
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 08 September 2022
Facts –
- The appellant, M/s Reliance Commercial Dealers Ltd., engaged in providing "non-scheduled air transport (passenger) service.
- It is not in dispute that the appellant had submitted an application for permission to import the aircraft for operating nonscheduled (passenger) services and a permit had been granted by the DGCA to import the aircraft for non-scheduled (passenger) services.
- The appellant imported the aircraft and claimed exemption from customs duty under the exemption notification.
- The show cause notice was issued to the appellant in whom it was stated that the use of the aircraft did not constitute public use and amounted to private/personal use as a result of which the appellant had not used the aircraft for non-scheduled (passenger) service in accordance with the permit granted to the appellant by the DGCA.
- The Commissioner has held in the impugned order dated 31.08.2010 that the appellant, by entering into an agreement with RIL for providing passenger air transport service upon payment by RIL, had chartered the aircraft to RIL which is not permissible when an aircraft is imported for non-scheduled air transport (passenger) services. The order also holds that as a non-scheduled operator, the appellant was required to issue passenger tickets which had not been done and that the use of the aircraft to carry personnel of a group company amounts to private use of the aircraft.
- Aggrieved, the appellant filed an appeal.
Issue –
- Whether the use of aircraft imported by the appellant with benefit of exemption from customs duty for providing passenger air transport service to its group company by carrying personnel of the group company for remuneration would amount to violation of Condition No.104 of the said exemption notification.
- Whether it is open to Customs to contend that such use in not in accordance with the permit for nonscheduled (passenger) services granted by Director General of Civil Aviation when the DGCA has not found such use to be in violation of such permit and had renewed the permit from time to time.
Order –
- The Tribunal observed that 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’.
- The appellant imported the aircraft and claimed exemption from customs duty under the exemption notification. The said exemption is subject to Condition No.104 contained in the said notification which is to the effect that the aircraft should be imported by an operator who has been granted approval for providing non-scheduled (passenger) services or non-scheduled (charter) services and the importer should furnish an undertaking that the aircraft shall be used only for providing the said services which seems to be the non disputed facts of the case.
- Relying on VRL Logistic, the tribunal observed that the present case, the DGCA has not found the use of the aircraft by appellant to be in violation of permit for non-scheduled (passenger) service and in fact has renewed the permit year after year. There is, therefore, no violation of the undertaking and, Customs cannot demand duty in terms of the undertaking.
- Also, the Policy Guidelines states that non-scheduled operation means an air transport service other than scheduled air transport service and that it may be on charter basis and/or non-scheduled basis and that such operator is not permitted to publish time schedule and issue tickets to passengers. A operator of non-scheduled passenger service is, therefore, not required to issue tickets to passengers.
- Therefore the use of the aircraft has been in accordance with the scope of non-scheduled (passenger) services and there is no violation of the undertaking to use the aircraft for non-scheduled (passenger) services.
- Therefore the order was set aside and appeal was allowed.
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