The Delhi High Court in a recent ruling held that non-scheduled passenger services do not include providing air transport services to public at large on payment of published tariff.
The appellant in the present matter is East India Hotels.
The Director General of Civil Aviationissued a permit to the appellant to operate the aircraft for providing non-scheduled (passenger) services.
In terms of Condition no.104 of the Notification, importers of aircrafts are required to furnish an undertaking to the Deputy Commissioner of Customs/Assistant Commissioner of Customs, committing that the aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services. On failure to comply with the condition to use the aircraft for the aforementioned services, the importer would be required to pay an amount equivalent to the duty payable on the said aircraft.
The Tribunal did not accept that the appellant had complied with the conditions for exemption as set out in the Customs Notification No.21/2002-CUS, as amended by Customs Notification 61/2007-CUS. TheTribunal held that the aircraft imported by the appellant was used for private purposes and not for providing non-scheduled (passenger) services or non-scheduled (charter) services. Thus, the Condition no.104 of the Notification was violated.
The question that arises for consideration was whether the learned Tribunal had erred in misinterpreting the Notification and concluding that the appellant had not complied with the conditions for availing duty exemption under the Notification.
The Counsel for the appellant submitted that submitted that it was not open for the customs authorities to question whether the aircraft was used for non-scheduled air transport service, as that question was required to be addressed only by the DGCA and that the Customs Department was not empowered to examine the validity of any permissions granted by the DGCA.
In the present case, the appellant has not used the aircraft for providing air transport service for remuneration of any kind.
The Bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “We are not in agreement with the Tribunal that the provision of non-scheduled (passenger) services as defined under clause (b) of explanation to Condition no.104 of the Notification, entails providing air transport services to public at large on payment of published tariff; we agree with the conclusion that the appellant has not complied with the Condition no.104 of the Notification.”
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