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2023 (12) TMI 1077 - AT - CustomsConfiscation of imported goods - import of aircrafts/helicopters - whether non-scheduled (passenger) services permit would qualify as non charter services permit also? - whether the appellant would qualify for providing charter service? - HELD THAT - These issues were decided by the Larger Bench of the Tribunal in M/S VRL LOGISTICS LTD VERSUS COMMISSIONER OF CUSTOMS, AHMEDABAD 2022 (8) TMI 720 - CESTAT AHMEDABAD (LB) where it was held that It is, therefore, clear that an operator providing non-scheduled (passenger) services can always provide such services either on individual seat basis or by chartering the entire aircraft and such a restriction is not contained either in Condition No. 104 or Aircraft Rules or the Civil Aviation Requirements - The Larger Bench also held that remunerative flights qualify as a air transport services and would be covered under the exemption. Whether the appellant had violated Condition No. 104 of the notification merely because on one occasion one aircraft had been used without remuneration? - HELD THAT - In reply to the show cause notice the appellant had pointed out that in regard to the aircraft VT-RAN which was imported on 13.11.2007, the first flight was undertaken on 25.01.2008 and the second flight was undertaken on 27.01.2008. The second flight was for crew familiarization and it had two pilots and Mr. Sunil Godhwani and Mrs. Dhillon, who as prospective users were travelling on the flight only for experiencing the aircraft. The flight was also from Delhi-Raipur-Bagdogra-Delhi with no stoppage time at the airports. Thus, it cannot be urged by the department that Condition No. 104 of the notification had been violated merely because one particular flight was undertaken without any remuneration - the order dated 30.09.2010 passed by the Commissioner confiscating the imported aircrafts/helicopters with an option to the appellant to redeem the same after payment of redemption fine and also confirming the demand of customs duty with interest and penalty cannot be sustained. The appellant would, therefore, be entitled to refund of the redemption fine paid by the appellant in terms of the order passed by the Commissioner. Whether the appellant would be entitled to interest on the redemption fine amount deposited by the appellant, which is now liable to be refunded? - HELD THAT - The issue, therefore, stands settled against the appellant in the aforesaid decision of the Larger Bench of Tribunal in Advance Mechanical Works 2004 (12) TMI 107 - CESTAT, MUMBAI . The Larger Bench of the Tribunal had placed reliance upon the decision of the Supreme Court in Union of India vs. Orient Enterprises 1998 (3) TMI 137 - SUPREME COURT to hold that no interest would be payable on redemption fine, while refunding the same in pursuance of an order of a higher judicial forum - The appellant would, therefore, not be entitled to any interest on the refund of the redemption fine. The bank guarantees, however, furnished by the appellant are liable to be discharged as the order passed by the Commissioner has to be set aside. The order dated 30.09.2010 passed by the Commissioner is set aside with a direction to the department to refund the redemption fine deposited by the appellant within a period of two months from the date of service of a copy of this order - Appeal allowed.
Issues Involved:
1. Whether non-scheduled (passenger) services permit would qualify as non-scheduled (charter) services permit. 2. Whether the appellant qualifies for providing charter services. 3. Whether the appellant violated Condition No. 104 of the exemption notification. 4. Entitlement to refund of the redemption fine with interest and discharge of bank guarantees. Summary: Issue 1 & 2: Non-scheduled (passenger) services permit and qualification for charter services: The Tribunal referred to the Larger Bench decision in *VRL Logistics Ltd. vs. Commissioner of Customs, Ahmedabad* and the Delhi High Court decisions in *East India Hotels Ltd. vs. Commissioner of Customs Central Excise and Central GST, New Delhi*, among others, which clarified that non-scheduled (passenger) services can include non-scheduled (charter) services. The Tribunal noted that the definitions of air transport service and non-scheduled (passenger) service do not restrict the service to per-seat basis and that non-scheduled operators can conduct charter operations. The Tribunal concluded that the appellant's permit for non-scheduled (passenger) services qualifies for providing charter services. Issue 3: Violation of Condition No. 104: The Tribunal found that the appellant had used the aircraft for transporting personnel of Group Companies for remuneration, except for one instance where a flight was undertaken without remuneration for crew familiarization. The Tribunal held that this solitary instance does not constitute a violation of Condition No. 104, which requires the aircraft to be used for non-scheduled (passenger) or charter services. The Tribunal emphasized that the appellant had complied with the conditions of the exemption notification. Issue 4: Refund of redemption fine with interest and discharge of bank guarantees: The Tribunal set aside the Commissioner's order confiscating the aircrafts and confirming the demand of customs duty with interest and penalty. The Tribunal directed the department to refund the redemption fine deposited by the appellant within two months and discharge the bank guarantees. However, the Tribunal, relying on the Larger Bench decision in *Advance Mechanical Works vs. Commissioner of Customs & Central Excise, Rajkot* and the Supreme Court decision in *Union of India vs. Orient Enterprises*, held that the appellant is not entitled to interest on the refund of the redemption fine. Conclusion: The Tribunal allowed the appeal, set aside the impugned order, and directed the refund of the redemption fine without interest and the discharge of bank guarantees.
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