2010 (10) TMI 715 - AT - Customs

Application for modification of stay - exemption under notification No. 21/2002-Cus. dated 1-3-2002 - exemption from payment of duty to the aircraft - The letter dated 22-8-08 clearly clarifies that it may also be added that non-schedule (Charter) permit holder is expected to use his aircraft only for Charter services whereas non-scheduled (passenger) permit holder is free to use his aircraft for both charter and passenger services and this explanation clearly goes to the root of the matter. And therefore it was certainly expected that such clarification must have been placed before the Bench by the officers of the Customs Department and even if it had not been done so the moment the said letter had come to the knowledge of the department it was necessary for the department to come forward with necessary explanation in that regard. Whether this point is considered or not is a totally different issue. Certainly the department could have taken different view for valid reason if any but the suppression of that letter is certainly non-appreciable.- Condition of pre-deposit waived.

Summary

Issues:
1. Modification of stay orders granted earlier based on directions from Delhi High Court.
2. Interpretation of notification regarding exemption from duty for aircraft.
3. Permission for import of aircraft for non-scheduled passenger services and charter services.
4. Compliance with regulations for non-scheduled charter services.
5. Relevance of letter dated 22-8-2008 in the investigation process.
6. Consideration of CAR provisions in granting permission for aircraft import.
7. Impact of non-compliance with exemption conditions on availing benefits.
8. Requirement of pre-deposit amount under the impugned order.

Issue 1 - Modification of Stay Orders:
The appellants sought modification of stay orders based on directions from Delhi High Court, allowing them to file an application for modification of stay. The High Court expected the Tribunal to dispose of the application promptly after hearing the matter.

Issue 2 - Interpretation of Notification:
The dispute revolved around the interpretation of the notification granting exemption from duty for aircraft. The appellants argued that the import of the aircraft was for both non-scheduled passenger and charter services, as clarified in various documents, while the department contended that the license was restricted to non-scheduled charter services only.

Issue 3 - Permission for Import of Aircraft:
The appellants highlighted permissions granted for the import of the aircraft for non-scheduled passenger services, emphasizing the flexibility to use the aircraft for charter services as well. The department argued for compliance with regulations, including the publication of tariffs for charter services.

Issue 4 - Compliance with Regulations:
The department raised concerns about non-compliance with regulations, specifically regarding the pre-publication of tariffs for charter services. The show cause notice mentioned the absence of ticket issuance but did not specifically address the tariff publication requirement.

Issue 5 - Relevance of Investigative Letter:
The appellants emphasized the significance of a letter dated 22-8-2008 in clarifying the scope of use of aircraft for charter and passenger services. They criticized the department for not disclosing this letter earlier in the investigation process.

Issue 6 - Consideration of CAR Provisions:
The CAR provisions were brought into the discussion to determine the permissibility of using the aircraft for non-scheduled services. The appellants argued that the CAR provisions allowed for flexibility in service usage, which was not adequately considered earlier.

Issue 7 - Impact of Non-Compliance on Exemption:
The department highlighted the importance of compliance with exemption conditions, such as the publication of tariffs, to avail benefits. Non-compliance with even one condition could disentitle the assessee from exemption benefits, but it was crucial to provide an opportunity to show cause against proposed actions.

Issue 8 - Pre-Deposit Requirement:
The Tribunal found it challenging to insist on compliance with pre-deposit requirements at the interim stage, considering the High Court's decision. Therefore, the pre-condition of pre-deposit was recalled and waived in this case.

This detailed analysis covers the various issues addressed in the judgment, providing insights into the arguments presented by both parties and the Tribunal's considerations in reaching its decision.