The Supreme Court has upheld the verdict given by Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) in the case determining the status of service of the assessee. The Supreme Court concurred with the CESTAT’s finding that the appellant’s operations could be classified as non-scheduled passenger service.
The assessee, Global Vectra Helicorp Ltd was operating helicopters under contract of service for providing transport of passengers and materials to certain companies. These contracts were mainly with oil companies for transportation of their personnel and materials to and from various oil rigs and other locations. One of the contract was with ONGC, contact dated and another contract was with Gujarat State Petroleum Corporation Ltd. entered in November among others.
Revenue on its perception that the appellant importer is offering Charter services and not Passenger services, as undertaken by it, pursuant to enquiry, issued show-cause notices dated 8/8/2011 which was adjudicated and the proposed demand of duty confirmed, with interest and penalty. Further the helicopters were held liable to confiscation, giving option to redeem.
The assessee had contended before CESTAT that there has been no breach of Condition No. 104 of the said notification as the services offered by the appellant meet the definition of “non-scheduled passenger services” contained in explanation to the said notification. Non-scheduled passenger services means a transport service other than scheduled passenger air transport services as defined in Rule 3 of the Aircraft Rules, 1937.
The assessee further pointed out that all such air transport services which is other than scheduled passenger air transport services, as defined in Rule 3 of the Aircraft Rules, 1937, would amount to being non-scheduled passenger services in terms of Notification No. 21/2002 particularly Condition No. 104 therein. Rule 3(9) defines Air transport service and Rule 3(49) defines scheduled Air transport services, as under:
Assessee further contended that while passing the impugned order,Revenue had failed to appreciate that in the particular case, there is a clarification dated 8.8.2008 by the Director General of Civil Aviation ( DGCA ), which categorically confirms and clarifies that the activity being conducted by the assessee were within the scope of their NSOP.
Revenue had contended before CESTAT that Assesseee is not using the helicopter in question for providing Non-Scheduled ( Passenger ) Service, but had used the helicopter with call sign VT AZW for exclusive charter services at Mumbai for ONGC and British Gas Exploration and Production India Ltd ( BGEP ) and that helicopter with call sign VT AZT for exclusive charter services at Rajhamundary to Gujrat State petroleum Corporation and Reliance Industries Ltd., on monthly fixed charge as well as flying hours basis. Revenue contended that Assessee had violated the conditions of the exemption notification. Revenue had further contended that the assessee had not published tariff and having failed to do so, amounts to Non-Scheduled Operating Passenger Service.
CESTAT had held that the services provided by the assessee are in the nature of non-scheduled passenger service.offering the service to public at large includes entering into agreement for providing regular service to a few members of the public on a regular basis over a period of time. CESTAT further held that printing of ticket is not an essential element and such a requirement is not there, where the services are provided on the basis of published tariff or agreement wherein the hourly charges and flying charges along with other charges are mentioned for providing service for extended period of time.
The two judge bench comprising Abhay S. Okha and Ujjal Bhuyan upheld CESTAT’s finding that the appellant’s operations could be classified as passenger service.
The assessee was represented by N. Venkatraman, Mukesh Kumar Maroria, Rupesh Kumar, V.C. Bharathi, Shantnu Sharma, Anmol Chandan and Udai Khanna. Revenue was represented by Tarun Gulati ,Mr. Kishore Kunal, Ms. Runjhun Pare and Jayesh Sitlani Adv.
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