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TMI Blog2018 (11) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... t. They uplifted Aviation Turbine Fuel (ATF) from foreign destinations for their return journey to Chennai. Department took the view that on the quantity of remnant ATF on arrival at Chennai Airport, the airlines would be required to pay Customs duty on the basis of assessable value worked out. The dispute in all these appeals concerns addition / inclusability of freight, insurance and landing charges in such assessable value. The adjudicating authorities in all these cases have upheld the inclusability of the aforesaid components, confirmed resultant duty liability and imposed penalties under Section 112(a) and Section 114A ibid. Hence Appeal No. C/40577/2016 by Jet Airways (India ) Ltd. & Appeal No. C/40337/2016 by InterGlobe Aviation Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 114A along with appropriate interest should have been ordered / imposed. 5. In Order-in-Original No. 361/2015 dt. 30.11.2015 (in relation to M/s.Spicejet Ltd.) the adjudicating authority while demanded duty of Rs. 83,03,664/- with interest and imposition of penalty of Rs. 5 lakhs under Section 112 (a) ibid and imposed penalty of Rs. 2 lakhs under Section 114A ibid. However, vide corrigendum dt. 23.3.2016 the penalty imposed under Section 114A ibid was treated as deleted. Hence appeal No.C/40941/2016 by Revenue inter alia on similar grounds that when duty demand to the tune of Rs. 83,03,664/- has been confirmed under Section 28 (1) & 28 (8) ibid on account of wilful misstatement and suppression of facts invoking extended period, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods will necessarily have to be done as per the provisions of Section 4 of the Act read with the Valuation Rules by which the elements of freight, insurance and landing charges are very includible to the assessable value for working out customs duty liability. 7.2 In respect of the Revenue appeals, Ld. A.R points out that when the demands that have been confirmed have been done on the basis of the proposition in the show cause notice that the said amounts have been evaded by way of suppression of facts etc. invoking extended period of limitation, the ingredients of Section 114A are very much present, hence equal penalty under Section 114A will also have be necessarily invoked mandatorily by the adjudicating authority, which has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t attributable to such fuel in the tank. In other words, the aircraft did not transport the fuel as a cargo or goods for the purpose of freight. Such interpretation will be a result of hyper-technical approach to the facts of the case. Admittedly, the remnant fuel is construed to be an imported item for the purpose of customs duty. In the importation of such remnant fuel, we could not discern any separate freight element, which can be added in the assessable value. The fuel in the tank is part of aircraft in operation. Fuel cost is calculated, and apparently, forms part of commercial consideration while fixing ticket charges for transporting aircraft. No freight element is attributable to fuel in thetank, the usage of which varies on differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to left- over fuel in the tank of an operating aircraft. Hence, there is no question such freight being „not ascertainable‟ and hence addition of 20% notional freight." 8.2 We find that the ratio laid down by the aforesaid Tribunal decision is also applicable on all fours to the disputes concerning inclusibility of landing charges and insurance. 8.3 In the event, following the Interglobe decision, we have no hesitation in holding that in all these appeals, there cannot be any addition of freight / insurance or landing charges to the cost of ATF for arriving at the assessable value of the remnant ATF. 8.4 Accordingly, impugned Order-in-Original Nos. 360/2015 dt. 30.11.2015 and 362/2015-Airport dt. 30.11.2015 will hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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