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2014 (9) TMI 802 - AT - Central ExciseLevy of tax on fuel supplied - Penalty under Rule 25 of the Central Excise Rules, 2002 - Held that - No tax is leviable either by the Central Government or the State Government in respect of fuel supplied to foreign aircraft registered in any country other than in India, who is a party to the Convention of International Civil Aviation and operating a scheduled or non-scheduled international air service to or fro from India. Therefore, there is no need for a separate exemption under the Central Excise Act and provisions of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002 and the Notification issued thereunder shall prevail over all other laws. Therefore, the appellant is rightly entitled for benefit of exemption under Notification dated 18-11-2002. However, it is responsibility of the appellant to give the details of the aircrafts to which the ATF is supplied and country of registration of the, aircraft so as to ascertain the eligibility to exemption. Appellant has not given these details to the adjudicating authority - Matter remanded back - Decided in favour of assessee.
Issues:
1. Excise duty liability on Aviation Turbine Fuel (ATF) supplied to Foreign Aircrafts. 2. Interpretation of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002. 3. Compliance with Notification No. 3720, dated 18-11-2002. 4. Eligibility for exemption under the Central Excise Act. Analysis: Issue 1: Excise duty liability on ATF supplied to Foreign Aircrafts The appellant, M/s. Indian Oil Corporation Ltd., supplied ATF to Foreign Aircrafts without discharging excise duty. A show-cause notice was issued demanding excise duty, interest, and penalty. The lower appellate authority upheld the duty demand and penalty. The appellant contended that the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002, along with a relevant notification, exempted fuel supplied to foreign aircraft from taxes and duties. The Tribunal noted the appellant's entitlement to the exemption but emphasized the need for providing aircraft details to verify eligibility. The matter was remanded for fresh consideration to ascertain if the supplied ATF met the exemption criteria. Issue 2: Interpretation of the Foreign Aircraft Act The appellant argued that the Act, read with the notification, prevails over other tax laws, exempting fuel supplied to foreign aircraft. The Tribunal agreed that no separate exemption under the Central Excise Act was necessary if the requirements of the Foreign Aircraft Act were met. However, the appellant's failure to provide aircraft details necessitated a remand for verification of eligibility based on registration country and compliance with the International Civil Aviation Convention. Issue 3: Compliance with Notification No. 3720, dated 18-11-2002 The Revenue contended that the appellant did not furnish aircraft details as required by the notification, hindering verification of exemption eligibility. The Tribunal acknowledged the importance of providing such details for confirming the entitlement to exemption under the notification. Issue 4: Eligibility for exemption under the Central Excise Act The Revenue argued that since there was no specific exemption on ATF under excise law, the appellant was not eligible for exemption. The Tribunal clarified that the provisions of the Foreign Aircraft Act and related notification governed the exemption, emphasizing the need for compliance with eligibility criteria for availing the benefit. In conclusion, the Tribunal allowed the appeal by remanding the matter for further consideration based on the appellant's compliance with the exemption criteria under the Foreign Aircraft Act and the related notification.
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