2016 (3) TMI 558 - AT - Customs

Provisional release of aircraft - Seizure under Section 110 of the Customs Act, 1962 - Seeking relief from conditions imposed - Held that - as the appellant possess a valid DGCA Licence for operating as Non Scheduled Passenger Aircraft and did not exported the aircraft for any other purpose which are re-imported but was sold the aircraft to the overseas buyer. Therefore, provisional release under Section 110 A of the Customs Act is allowed subject to execution of bond equivalent value of the goods of ₹ 128 crores(Rupees One hundred twenty eight crores only) and the bank guarantee is reduced from ₹ 25,89,44,000/- to ₹ 5,00,00,000/- (Rupees five crores only). - Decided partly in favour of appellant

Summary

Issues:
1. Provisional release of seized aircraft under Section 110 of Customs Act.
2. Applicability of exemption notifications on re-imported goods.
3. Validity of conditions imposed for provisional release.
4. Discretion of Principal Commissioner in allowing provisional release.
5. Modification of provisional release order by the Tribunal.

Analysis:
1. The appellant filed an appeal against the seizure of their aircraft by the Officer of AIU, Madurai Airport under Section 110 of the Customs Act. The appellant imported the aircraft into India and later took it out on a voyage, leading to its seizure upon re-entry into India. The Principal Commissioner granted provisional release subject to onerous conditions, prompting the appeal before the Tribunal.

2. The appellant argued that the aircraft's sale and subsequent lease did not constitute export and re-import, as it was in their possession throughout. They relied on exemption notifications to support their claim for a NIL rate of duty or a reduced duty amount. The appellant contended that they complied with all relevant regulations and should be granted provisional release without the need for a bank guarantee.

3. The Revenue, represented by the Ld. A.R, opposed the appellant's arguments, asserting that the seizure was justified due to the lack of shipping bill or Bill of Entry during the export and import of the aircraft. The Principal Commissioner's decision to allow provisional release upon payment of 28% of the aircraft's value was defended as a discretionary measure.

4. After considering both sides and reviewing the seizure mahazar, the Tribunal found that the aircraft had been seized under a valid belief of illegal export and import. However, upon examining the sale and lease agreements, it was determined that the appellant's case did not fall under the exemption notifications claimed.

5. Ultimately, the Tribunal modified the provisional release order, reducing the bank guarantee amount significantly based on the circumstances of the case. The appellant was granted provisional release under Section 110 A of the Customs Act, subject to executing a bond equivalent to the value of the aircraft and a reduced bank guarantee. The appeal was allowed in favor of the appellant with the modified terms.