2009 (11) TMI 703 - AT - Customs

Waiver of pre-deposit - N/N. 21/2002-Cus., dated 1-3-2002 as amended by N/N. 20/2007 and N/N. 61/2007, dated 3-5-2007 - revenue was of the view that the aircraft was not used exclusively for providing non-scheduled passenger air transport services and therefore there was violation of conditions of N/N. 61/2007 - Held that - permit has been issued only for passenger services. Prima facie, there is a different permit for charter services and, therefore, the permit given to the applicant may not be valid for rendering charter passenger services. Therefore, the condition of the exemption notification is prima facie, violated. Further, the condition given in the undertaking to the Customs authorities also stands violated. Therefore, on merits, the applicant has not made out a case for waiver of dues - appeal dismissed - decided against applicant.

Issues:
1. Interpretation of import regulations for aircraft.
2. Compliance with customs notification conditions.
3. Validity of permit for passenger services.
4. Violation of undertaking to Customs authorities.
5. Financial hardships and waiver of dues.

Interpretation of Import Regulations for Aircraft:
The case involved the import of an aircraft without payment of duty under a specific permit for non-scheduled air transport services. The Commissioner found that the aircraft was used for operations beyond non-scheduled passenger services, leading to a violation of customs notification conditions. The Tribunal noted that the permit was issued solely for passenger services, indicating a potential violation of the exemption notification. Despite arguments from the appellant, the Tribunal upheld that the conditions of the notification and the undertaking to Customs authorities were breached, justifying the duty demand.

Compliance with Customs Notification Conditions:
The Commissioner confirmed the violation of conditions specified in the customs notification due to the aircraft's usage for purposes other than non-scheduled passenger services. The Tribunal concurred with this finding, emphasizing the importance of strictly construing the notification. While considering the financial hardships faced by the appellant, the Tribunal directed a partial deposit of the demanded duty, acknowledging the breach of notification conditions and the need for compliance.

Validity of Permit for Passenger Services:
The appellant contended that the permit granted was valid not only for non-scheduled passenger services but also for charter services within the country. However, the Tribunal observed that the permit was specifically for passenger services and highlighted the distinction between permits for passenger services and charter services. This distinction played a crucial role in determining the validity of the permit and the subsequent compliance with customs regulations.

Violation of Undertaking to Customs Authorities:
The Commissioner held that the appellant violated the undertaking given to Customs authorities regarding the utilization of the aircraft solely for non-scheduled passenger services. The Tribunal agreed with this assessment, noting that the instances cited in the show-cause notice indicated deviations from the specified usage. The breach of the undertaking further contributed to the finding of non-compliance with customs regulations.

Financial Hardships and Waiver of Dues:
Considering the financial difficulties raised by the appellant, the Tribunal allowed a partial waiver of the duty demand, requiring the deposit of 50% of the amount within a specified timeframe. This decision aimed to address the appellant's financial challenges while ensuring compliance with the customs notification conditions. The Tribunal balanced the financial concerns with the need for upholding regulatory requirements, ultimately granting a partial waiver subject to the specified deposit.

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