2021 (4) TMI 791 - HC - Service Tax

Permission for sale of Aircraft - requirement of furnishing the details of an unencumbered solvent security - violation of condition on which aircraft was granted permission to extend Non-Scheduled Air Transport Services (NSAT Services) to its customers - HELD THAT - There are decisions rendered by several courts, in which, it has been held, that stale show cause notices cannot be adjudicated upon by the concerned statutory authorities. The concerned statutory authority will adjudicate upon the show cause notice dated 18.09.2013 - The petitioner will have liberty to file a supplementary reply which, as Mr. Gulati says, would, inter alia, advert to the issue concerning delay in adjudicating upon the show cause notice, and its consequences in law.

Summary

Issues:
1. Compliance with conditions for selling aircraft.
2. Adjudication of show cause notice.
3. Violation of conditions for Non-Scheduled Air Transport Services (NSAT Services).
4. Interpretation of Civil Aviation Requirements (CAR).
5. Delay in adjudication of show cause notice.
6. Directions for adjudication process.

Compliance with conditions for selling aircraft:
The petitioner challenged the communication directing compliance with conditions for selling the aircraft, arguing the conditions were onerous and unnecessary. The petitioner contended that it should have been allowed to sell the aircraft without any imposed conditions. The petitioner had already paid a significant portion of the demanded duty without prejudice to its rights and contentions.

Adjudication of show cause notice:
The primary issue for adjudication was whether the petitioner violated the conditions for extending NSAT Services to customers. The contesting respondents alleged that the petitioner's use of the aircraft to ferry officials and employees constituted a violation of the granted approval conditions. The petitioner relied on CAR issued by DGCA to support its position that there was no violation. Additionally, the petitioner cited decisions by CESTAT and the Supreme Court to strengthen its case.

Violation of conditions for NSAT Services:
The petitioner's reliance on previous judgments by CESTAT and the Supreme Court, along with other cases, aimed to demonstrate that there was no violation of the conditions for NSAT Services approval. The contesting respondents argued that the use of the aircraft for employee transportation breached the approval conditions.

Interpretation of Civil Aviation Requirements (CAR):
The petitioner's argument regarding compliance with CAR issued by DGCA was crucial in determining whether there was a breach of approval conditions for NSAT Services. The interpretation of CAR played a significant role in the case.

Delay in adjudication of show cause notice:
The petitioner highlighted the delay in adjudicating the show cause notice dated 18.09.2013, emphasizing that stale notices should not be adjudicated upon. The court acknowledged the delay and directed the concerned authority to expedite the adjudication process.

Directions for adjudication process:
The court directed the concerned statutory authority to adjudicate upon the show cause notice, allowing the petitioner to file a supplementary reply addressing the delay in adjudication. The authority was instructed to provide a personal hearing to the petitioner's representative and pass a speaking order. The authority was given two weeks to complete the process, with the petitioner having the right to challenge any adverse decision. If the decision favored the petitioner, an "No Objection Certificate" was to be issued promptly.