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TMI Blog1998 (7) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... the permission on 10-10-1991. The Aircraft reached IGI Airport, New Delhi on 15-10-1991 and the appellants under their letter dated 14-10-1991 and 16-10-1991 requested for duty free clearance under the provisions of Rule 58(6)(a) of the Indian Aircraft Rules, 1920 stating therein that the Aircraft is not to be registered in India and shall be removed from India within six months of its entry. The Aircraft was cleared on 28-10-1991 provisionally on a bond of Rs. 4.78 crores along with a bank guarantee of Rs. 84.16 lakhs. Subsequent inquiries revealed that the appellants under their letter dated 14-6-1990 had sent a proposal to the DGCA for operating Dornier Aircraft in India; that the sale agreement with Druk Air Corporation showed that the appellants had agreed to purchase two Aircrafts and they were permitted by the DGCA to operate Air Taxi Service under letter dated 20-7-1990. That under their letter dated 26-4-1991, they had submitted the details about the maintenance facilities and proposed operations of the Aircraft to DGCA and on 10-10-1991 they had informed the DGCA about the purchase of two Dornier Aircrafts; that the DGCA had granted them permission for operation of Dorni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not invalidate the clearance nor does it entail any penal consequences. That the true effect of these provisions is that if the person is certain that the Aircraft will be returned within six months, he can avail duty free clearance; that however, if the person is not sure whether or not he will be able to retain Aircraft beyond six months, he can also avail the duty free clearance subject to undertaking in terms of Rule 58(6)(b) to pay duty if the Aircraft is not removed out of India within six months. The learned Advocate submitted that this is exactly what happened in the present case that while they were interested in retaining Aircraft they can never be sure about it because of the various formalities required for which they had to seek the approval from various authorities concerned. With reference to the correspondence referred to in the impugned order, the learned Advocate submitted that their letter dated 14-6-1990 is a request to DGCA for operating Air Taxi Service which is a general request and has no reference to Aircraft in question; that the permission granted by DGCA on 20-7-1990 is again a permission in principle for issue of Air Taxi operator permit having no be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also contended that they had no intention to evade payment of duty and as such no penalty is imposable on them; that the Commissioner himself had observed in the impugned order that in the normal circumstances, Department had to regulate the import under Rule 58(6)(b) if subsequently Aircraft is retained in India. 3.3 Shri L.P. Asthana, learned Advocate submitted that the show cause notice was issued to them alleging contravention of the provisions of Section 111(f) and 111(o) of the Customs Act; that Section 111(o) provides for the confiscation of the goods if any dutiable or prohibited goods required to be mentioned in a import manifest or import report and which are not so mentioned. He submitted that an import general manifest is to be filed in respect of conveyance and not in respect of Aircraft itself which is being imported. As per the definition of goods in Section 2(22) of Customs Act, Aircrafts are also goods. He placed reliance on the decision in the case of Union of India v. Chowgule and Co. Pvt. Ltd. - 1985 (20) E.L.T. 57 in which the Bombay High Court held that vessel would be goods under Section 2(22). Bombay High Court also observed that the provisions of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later on duty, the Customs authorities have sanctioned the non-observance of the condition and as such confiscation of the goods under Section 111(o) of the Customs Act is illegal and not sustainable. 4. Countering the arguments, Shri H.K. Jain, learned SDR, submitted that it is evident from all the steps taken by the appellants and action completed that they had all along the intention to register the aircraft in India except obtaining the CCP which had also been applied already; that their agreement with the supplier of the aircraft contains the clause that the seller agrees to assist the buyer (the appellants) in the registration with the Deptt. of Civil Aviation India; that they had permission to fly the aircraft in India for 120 days with conditions of registration of the aircraft in India. He further submitted that there is no evidence to show that they had informed the Customs Department about their application; that the Bond executed by the appellants was meant to cover the absence of ITC licence or CCP; that Rule 58(6)(a) of the Aircraft Rules does not provide for execution of bond; that CCP is required even for retaining the aircraft for 120 days in India. Regarding san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Collector on arrival. (b) In the case of an aircraft in respect of which such a declaration has been made and which is not removed from India within six months the duty leviable in respect of it shall be paid to the Customs Collector before the aircraft is again flown. 7. We observe that Customs duty is not to be levied on an aircraft which is brought into India for the purpose of a flight to or across India subject to the following conditions :- (i) Aircraft is not intended to register in India. (ii) It is intended to remove from India within six months from the date of entry. (iii) Person in charge makes a written declaration to the above effect to the Customs on arrival of the aircraft. 7.2 The Department is of the view, after taking into consideration the various acts of commission by the appellants that they always intended to register the aircraft in India. A question, thus, arises that what is intention? Intention is a conscious state in which mental faculties are aroused into activity and summoned into action for the purpose of achieving a conceived end as held by Supreme Court in Jaiprakash v. State - JT 1991 (1) S.C. 288. A man s intentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted to get the aircraft registered in India after 120 days. It is also observed that in their letter dated 27-5-1991 addressed to the Chief Controller of Import Export, they had clearly mentioned that We intend to purchase from Bhutan 2 Nos. old Dornier 228 aircrafts for a value of Rs. 4.21 crores for which payment is to be made in Indian rupees and bring it to Delhi for air taxi purpose. From all this correspondence it is apparent that the appellants had intended to register the aircraft in question in India. Therefore, their claim in their letter dated 14-10-1991 addressed to the Assistant Collector, Customs for clearance of the aircraft without payment of duty, to the effect that Aircraft is not to be registered in India and shall be removed from India within six months of its entry was not correct and we find that the Commissioner was justified in arriving at the conclusion that the appellants were having full intention to retain the aircraft in India. The Bond executed and Bank Guarantee furnished by them do not take away the intention of the appellants of getting the aircraft registered in India. We find substantial force in the submission of the learned SDR that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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