2019 (3) TMI 1885 - SCH - Customs

Applicability of Additional Duty of Customs on the ATF - HELD THAT - The Committee decided that as the Air India agrees as regards the applicability of Additional Duty of Customs on the ATF, as adjudged in the adjudication order dated 12.04.2017, the appropriate course of action, in the circumstances of the case, would be that the department would not press for recovery of the said amount around ₹ 1.5 crore for the period November 2010 to June 2012 and in due course would process it for write off as a special case, if Court approves the recommendations of the Committee. Mr. Radhakrishnan, learned senior counsel submits that these Civil Appeals may be disposed of in terms of the aforesaid paragraphs 6 and 7 of the Minutes. Appeal disposed off.

Summary

Issues:
1. Delay condonation for listing the case
2. Constitution of a committee to resolve the matter
3. Financial position of Air India and duty payment waiver

Delay Condonation and Committee Constitution:
The Supreme Court, in a judgment delivered by Hon'ble Mr. Justice Uday Umesh Lalit and Hon'ble Ms. Justice Indu Malhotra, granted delay condonation and directed the constitution of a committee comprising the Revenue Secretary, Commissioner of Customs, and Chairman-cum-Managing Director of Air India to resolve a dispute. The committee was instructed to provide findings, observations, and recommendations by a specified deadline. The committee, as per the order, included key officials from the government and Air India, and their meeting minutes highlighted the financial challenges faced by Air India and the consideration for a duty payment waiver.

Financial Position of Air India and Duty Payment Waiver:
The committee's minutes revealed that Air India's financial situation was precarious, leading to discussions on the viability of paying duties for a specific period. While the law did not provide for duty waiver, the government's 100% shareholding in Air India and its financial condition were considered for a possible write-off. The committee emphasized that any recommendation for waiver should be a special case due to Air India's unique circumstances and not set a precedent for other cases. Consequently, the committee agreed that the department would not pursue the recovery of around ?1.5 crore in duties for a specified period and would process it for write-off subject to court approval. Mr. Radhakrishnan, the senior counsel, requested the disposal of Civil Appeals based on the committee's recommendations, which the court accepted and disposed of the appeals accordingly.

This judgment showcases the court's approach to resolving disputes involving public sector undertakings like Air India, balancing legal obligations with the financial realities of the entity. The formation of a committee comprising relevant stakeholders and the subsequent decision on duty payment waiver exemplify a pragmatic and nuanced legal approach to address complex issues in the realm of customs and financial management.