2017 (12) TMI 402 - AT - Customs

N/N. 21/2002-Cus dated 01.03.2002 - principle of estoppel - export of aircrafts without filing any shipping bill at the port of export - illegal import of aircrafts - Department has alleged that the export of aircrafts was in contravention of Section 50 of the Customs Act, 1962 and, that their import being fresh import, the appellant violated Section 46(1) of the Customs Act, 1962 - whether after initial assessment and clearance, the subsequent taking out of the two aircrafts, out of India and bringing them back into India would amount to export and import respectively under Customs Act, 1962? Held that - the aircrafts are not liable to confiscation under Section 111 or Section 113 of the Customs Act and also not liable to pay import duty as and when they are brought back into India after making trips abroad and duty cannot be demanded on these aircrafts. Considering the fact that the Department itself has dropped similar proceedings in relation to five other aircrafts, which were imported initially and subsequently gone out of India under sale and purchase agreements and came back under the lease agreement, we hold that the order of ld. Commissioner is not sustainable and the same is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Jurisdiction of the Commissioner of Customs, Misuse of notification, Alleged evasion of customs duty, Confiscation of aircraft, Import and export under Customs Act, Principle of estoppel, Extended period, Duty liability on subsequent import.

Jurisdiction of the Commissioner of Customs:
The appellant contended that the Commissioner of Customs in Amritsar had no jurisdiction as the alleged import of aircrafts took place in Hyderabad. The appellant relied on various decisions to support this argument. However, the Tribunal did not find this argument persuasive and proceeded to analyze the facts of the case.

Misuse of Notification and Alleged Evasion of Customs Duty:
The Customs department alleged that the appellant misused a notification and evaded customs duty in relation to the import and subsequent export and re-import of two aircrafts. The department issued a show cause notice confirming the demand of customs duty, imposing redemption fine, and penalties on the appellant. The appellant challenged these allegations, citing past decisions and exemptions under relevant notifications to support their case.

Confiscation of Aircraft and Import/Export under Customs Act:
The central issue revolved around whether the subsequent export and re-import of the aircrafts constituted export and import under the Customs Act. The Tribunal analyzed past judgments, including the case of Noble Asset Company Limited, to determine the duty liability on the aircrafts. The Tribunal found that the earlier clearance of the aircrafts for home consumption changed their duty status, leading to a conclusion that duty was not payable on subsequent re-import.

Principle of Estoppel and Extended Period:
The appellant argued that the department was estopped from contesting the duty liability on the aircrafts based on past decisions and the principle of estoppel. Additionally, the appellant raised concerns regarding the extended period for adjudication and the confiscation of aircrafts in the absence of dutiability.

Decision and Conclusion:
After considering the arguments presented by both parties and analyzing the facts of the case, the Tribunal found in favor of the appellant. The Tribunal relied on the judgment in the case of Noble Asset Company Limited and the department's previous decisions regarding similar aircrafts to set aside the order of the Commissioner. The appeal filed by the appellant was allowed, highlighting the inconsistency in the department's treatment of similar cases and the duty liability on the aircrafts in question.

Final Verdict:
The Tribunal allowed the appeal filed by the appellant, emphasizing the application of past judgments and the department's own actions in similar cases to determine the duty liability on the imported aircrafts. The Tribunal's decision was based on the principle established in the case of Noble Asset Company Limited and the lack of sustained arguments from the Revenue regarding the duty liability on the aircrafts.