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TMI Blog1995 (3) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... d accessories should be classified and assessed accordingly without the benefit of Notification No. 145/77-Cus. 3. Briefly stated the facts of the case are that the appellants are engaged in the business of manufacturing Powered Hang Gliders marketed as Ecomax `Kestrel Aeroplane . The appellants got permission to manufacture powerchute in India stating Though the word `Powerchute is a new terminology and has not been included in Civil Air Worthiness Requirements published by DGCA but it will be categorised with Powered Hang Gliders, as such the relevant CAR series `C Part VI will have to be followed. They also referred to a certificate given by the Director of Airworthiness, Civil Aviation Deptt., Bombay certifying this is to certify that Rotax-503 engines manufactured by M/s. Bombardier, Australia and imported by M/s. Ecomax Agro Systems Ltd. are on installation of Powerchute Kestrel. It is further certified that Powerchute is classified as aeroplane. On the strength of this certificate and also that Kestrel Aeroplane is a new technology and has been certified in the United Kingdom by their Civil Aviation Authorities under the category of Microlith Aeroplane, the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is given in the Order-in-Appeal by the ld. Collector as to why he has not followed these HSN Explanatory notes when in cases where doubt arises HSN Explanotry notes are invariably referred to; that the Asstt. Collector admittedly classified the goods as parts of Powered Hang Gliders and once it has been admitted that the subject goods are parts of aeroplane nothing has been brought on record as to why such parts are not eligible for the benefit of Notification No. 145/77-Cus; that the definition of aeroplane and glider are given in the Aircraft Rules; that there is hardly any difference between the two definitions excepting the fact that the aircraft is power driven whereas a glider is non-power driven machine; that the ld. Collector has tried to distinguish between the working of an aeroplane and a Powered Hang Glider. However, a cursory glance at the definitions given in the Aircrafts Rules will show that both the aeroplane and the glider work on the same principle or Aerodynamic reactions on the surface; that the reliance on the decision of the Tribunal in the case of CC v. O.E.N. India Ltd. reported in 1989 (42) E.L.T. 235 is totally irrelevant as the issues in the two c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax-payer. If there is any ambiguity of language in a fiscal statute, benefit of that ambiguity must be given to the assessee. The ld. counsel submitted that in view of the ratio of the decisions of the Apex Court and the Tribunal, the lower authorities should have extended the benefit of Notification No. 145/77. Concluding the submissions, the ld. counsel prayed that the appeal may be allowed and the impugned order may be set aside. 5. Shri K.K. Jha, ld. SDR opposing the contentions, submitted that the product imported by the appellants was undoubtedly a part of a glider; that Hang gliders are classifiable under Chapter Heading 88.01 whereas aeroplanes are classifiable under Chapter Heading 88.02; that aeroplane is a common term and understood so easily; that the Director of Airworthiness, New Delhi in his letter dated 10-3-1993 categorised the product manufactured by the appellants as Powered Hang gliders and since this certificate has been given by the Delhi Office, it must have precedence over the certificate given by the Bombay office of the Civil Aviation Department. Reiter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal. We find from the above definitions of aeroplane and glider that the lift in flight is derived from aerodynamic reactions on the surfaces which remain fixed under given conditions of flight. The ld. Collector had held that the position however in regard to the Hang Glider is different in as much as the wings are of textile material and not fixed on the fusilage of the body of the Powered Hang Glider and therefore the definition in regard to deriving its lift in flight will differ, having regard to this fact, the ld. Collector (Appeals) appears to have observed as indicated in his order. 8. However examining this finding of the Collector vis-a-vis the working of a Hang Glider as given in the catalogue, we find that in the Hang Gliders also the textile material provides surface which remains fixed under the given conditions of flight. With the advancement in technology, it is possible today to provide surfaces which remain fixed under given conditions of flight even in the case of powered hang gliders having textile material for deriving a lift. 9. Now coming to the classification of the item, we find that there are two headings, one for Hang Gliders and the other for aircra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial character of wings and therefore they can be classified in the category of wings and shall qualify for classification as parts of goods of Heading No. 88.01 or 88.02. Having held so, let us examine what is the requirement of Notification No. 145/77-Cus., dated 9-9-1977. For proper appreciation of the requirement, the relevant notification is reproduced : In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Deptt. of Revenue and Banking, No. 301-Customs, dated 2nd August, 1976, the Central Govt., being satisfied that it is necessary in the public interest to do so, hereby exempts - (a)aeroplanes, (b)aeroplane parts, (c)aeroplane engines, (d)aeroplane engine parts, and (e)rubber tyres and tubes used exclusively for aeroplanes. when imported into India, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule to the Customs Tariff Act, 1975 (51 of 1975), as is in excess of 3 per cent ad valorem." This notification clearly covers aeroplane parts. As we have already held that Power ..... X X X X Extracts X X X X X X X X Extracts X X X X
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