2010 (9) TMI 432 - AT - Customs

Waiver of pre-deposit Aircraft import - Notification exempts use of aircraft both for the non-scheduled (passenger) service and non-scheduled (charter) service Exemption denied as assessee mis-used permit - appellants furnish bond for the full value of the aircraft and bank guarantee for 50% of the differential duty Bank guarantee sufficient security towards the differential Customs duty - offer of the appellants to keep the bank guarantee valid till pendency of the appeal, accepted pre-deposit waived

Summary

Issues:
1. Confiscation and redemption of impugned Aircraft
2. Demand of duty and imposition of penalty
3. Misuse of non-scheduled operators permit (NSOP)
4. Bank guarantee towards duty and waiver of pre-deposit

Confiscation and Redemption of Aircraft:
The Adjudicating Commissioner confiscated the impugned Aircraft but allowed redemption upon payment of a fine of Rs.6.5 crores. Additionally, the bank guarantee of Rs. 3.12 crores was invoked to partly recover the redemption fine. A demand of Rs. 6,22,67,295/- towards duty was confirmed, and a penalty of Rs. 3 crores was imposed. The appellants argued that the interchange of non-scheduled (passenger) permit for non-scheduled (charter) flights was permissible as per DGCA authorities and statutory provisions governing Civil Aviation requirements.

Misuse of NSOP and Bank Guarantee:
The Department contended that the appellants misused the NSOP by operating non-scheduled (charter) flights instead of non-scheduled (passenger) services as permitted. They highlighted the condition in the Notification No. 21/02-Cus dated 1-3-2002, emphasizing the word 'only' in Condition No. 104 and the requirement of a published tariff. The appellants argued that the impugned Notification exempted the use of aircraft for both non-scheduled (passenger) and non-scheduled (charter) services, making their case arguable for a waiver of partial pre-deposit.

Waiver of Pre-Deposit and Decision:
The Tribunal found that the appellants had made out an arguable case in their favor for a waiver of partial pre-deposit. The bank guarantee, initially meant for duty as per the High Court's order, was considered sufficient security towards the differential Customs duty. The Tribunal accepted the appellants' offer to keep the bank guarantee valid during the appeal's pendency and waived the requirement of pre-deposit. The case was scheduled for regular hearing, with both sides put on notice for further proceedings.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, New Delhi, provides insights into the issues of confiscation and redemption of the aircraft, demand of duty, misuse of NSOP, and the decision regarding the bank guarantee and waiver of pre-deposit.