The Delhi High Court has recently held that Customs authorities cannot take action on the sole basis of undertaking submitted by importer and the finding of Directorate General of Civil Aviation that the permit conditions were violated.
The impugned order is a common order which also disposed of the Revenue’s cross objections (Cross Objection No.212/2009) in Customs Appeal No.415/2009 as well as eight other appeals filed by the Revenue.
It was alleged in the said show cause notice that the helicopters were imported for ‘non-scheduled air transport (passenger) service’; however, the said helicopters were not used for the said purpose. It was alleged that the respondent has not complied with the Civil Aviation Requirement, Section 3, Air Transport Service ‘C’, Part 3 dated 08.10.1999, which requires the non-scheduled operators to issue passenger tickets in accordance with the provisions of Carriage by Air Act, 1972.
In regard to the use of helicopter, for operations by Oil and Natural Gas Corporation Limited
(hereafter ‘ONGC’), the Adjudicating Authority held that the long term contracts would fall within the purview of Charter Operations and, accordingly, there was no violation of the Exemption Notification on account of the use of the said aircraft for operations by ONGC.
The respondent filed an appeal against the Adjudicating Authority to the extent that it confirmed the demand of custom duty in respect of helicopters.
The principal question before the learned Tribunal was whether the respondent had violated the Condition No.104 of the Exemption Notification. The Tribunal found in favour of the respondent that it had not.
The Tribunal held that since the helicopters were used for passenger services for remuneration, the same were compliant with the Condition No.104 of the Exemption Notification.
The Bench observed that the Revenue representative Harpreet Singh’s contention that the respondent was not permitted to use the helicopters for non-scheduled (passenger) services
as it had imported the aircrafts for non-scheduled (charter) services is insubstantial.
It was noted that, “Condition No.104 of the Exemption Notification would be satisfied even if the aircraft imported is used for non-scheduled (passenger) services. It is further relevant to note that non-scheduled (passenger) services would also include non-scheduled (charter) services if provided for passengers.”
The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan thus held that, “The impugned order, to the extent that it holds that Customs Authorities can take action on the basis of the undertaking submitted by the importer only when the DGCA holds that the conditions of the permit issued by them have been violated, is set aside.”
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