The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently quashed the confiscation and customs duty recovery order against Chimes Aviation Private Limited for use of aircrafts for purposes other than training.
This category of import is also exempted from payment of customs duty in the same manner as Aircrafts for “flying training‟ purposes. The permission was initially granted by the DGCA for ten Aircrafts, but it was subsequently reduced to five Aircrafts after an amendment was made in the Civil Aviation Requirement dated 01.06.2017.
The appellant was served with a show-cause notice alleging that the earlier undertaking submitted by the appellant before the customs authorities was to the effect that the Aircrafts would be used only for flying training purpose but subsequently the appellant changed the purpose and started using the Aircrafts for non-scheduled air transport (charter) services without submitting any further undertaking, though a permit may have been granted by the DGCA to operate the Aircrafts for non-scheduled air transport (charter) services.
The show cause notice thereby alleges that the appellant had violated the terms of conditions of the exemption notification as a result of which the customs duty was required to be paid by the appellant in terms of the undertaking.
The Bench of Justice Dilip Gupta and Justice P V Subba Rao observed that the appellant had submitted an application before the Ministry of Civil Aviation (MCA) for grant of a No Objection Certificate (NOC) to operate non-scheduled (charter) services, which certificate was granted by the MCA on 15.06.2009 and on 28.07.2009 an endorsement was made in the permit.
The Customs, Excise and Service Tax Appellate Tribunal therefore observed that, “that the customs authorities could have proceeded to recover the duty on the basis of the undertaking only when the competent authority in the DGCA found as a fact that the appellant had violated the conditions of the permit.”
Further observing that, “In the present case, such a finding has not been recorded and on the other hand, the permits have been renewed from time to time”, the tribunal bench set aside the impugned order of detention and demand, ruling in favour of the assessee, Chimes Aviation Private Limited.
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