The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench has upheld the benefit of duty exemption on the import of aircraft for non-scheduled (passenger) services.
The division bench while hearing the appeal filed by assessee VRL Logistics Ltd. noticed that two contradictory views had been expressed by division benches of the Tribunal in Commissioner of Customs, New Delhi vs. Sameer Gehlot and King Rotors & Air Charter P. Ltd. vs. C.C. (ACC & Import), Mumbai.
In Sameer Gehlot’s Case, the benefit of the exemption notification No. 61 of 2017 was held to be available to the importer of an aircraft that had been granted a permit by the Director General of Civil Aviation for operating non-scheduled (passenger) services, while the benefit of the aforesaid exemption notification was denied in King Rotors. The division bench, accordingly referred the matter to a larger bench of the Tribunal to express its view as to which of the two views expressed by the division benches was the correct view.
The exemption notification grants Nil rate of duty on the 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 division bench in King Rotors’s caseexamined Condition No. 104 of the exemption notification and proceeded to take a view that was at variance with the view taken by the earlier division bench in Sameer Gehlot. The division bench held that the 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 ‘mistake vitiated the decision’ and, therefore, was rendered per incuriam.
It is not possible to accept the reasoning given by the division bench in King Rotors for holding that the earlier division bench decision in Sameer Gehlot was rendered per incuriam. The principle of per incuriam can be applied for such decisions which have been given in ignorance of some statutory provision or some authority that is binding.
By relying on the decision of the Supreme Court in State of Bihar vs. Kalika Kuer Alias Kalika Singh and Ors. the Tribunal observed that earlier decision may have appeared to be incorrect by a bench of co-ordinate jurisdiction on the ground that a possible aspect of the matter was not considered or more aspects should have been considered. This cannot be a reason to hold that the earlier decision by a co-ordinate bench was rendered per incuriam. The earlier judgment may seem to be not correct, but it would still have a binding effect on a bench of co-ordinate jurisdiction.
The Tribunal observed that the division bench in King Rotors was not justified in holding that the decision of the earlier division bench in Sameer Gehlot had been rendered per incuriam as neither it was pointed out that provisions of a Statue or judicial authority of binding nature had been ignored. The Coram of Mr. Justice Dilip Gupta, President, Mr. Ramesh Nair, Member (Judicial), and Mr. Raju, Member (Technical) has held that “the division bench in King Rotors was not correct in holding that the decision of the Tribunal in Sameer Gehlot was rendered per incuriam”
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