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TMI Blog2022 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the division benches deciding King Rotors and East India Hotels. In King Rotors it was considered to be per incuriam and in East India Hotels it was found not to apply to the facts of the case. Reliance can be placed in the case of ivision bench of the Tribunal in COMMR. OF CUS. (IMPORT) , ACC, MUMBAI VERSUS AIRMID AVIATION PVT. LTD. [ 2020 (3) TMI 922 - CESTAT MUMBAI ] , that was decided on 11.09.2019, considered the entitlement of the aircraft operator for continuance of exemption from duties of customs that had been allowed on import of aircraft against the undertaking given by the operator for complying with the condition of operating non-scheduled (passenger) service, though the aircraft was deployed on charter hire and was considered to be a private aircraft by the department. The adjudicating authority concluded that non issue of tickets to employees of group companies, or even pre dominant use by group companies for their employees did not reduce the aircraft to a private aircraft and that offering of the imported aircraft on charter was not violative of the condition for exemption - The Tribunal, after noticing the earlier division bench decisions of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uires at the stage of import, an approval from MCA to import the aircraft for non-scheduled (passenger) service and an undertaking by the importer to the customs authority that the aircraft would be used only for non-scheduled (passenger) services and that the operator would pay on demand, in the event of his failure to use the aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under the notification. Thus, if a service is covered by air transport service defined in rule 3(9) of the Aircraft Rules and is other than scheduled (passenger) air transport service defined in rule 3(49), it would be a non-scheduled (passenger) service within the meaning of clause (b) of the Explanation to Condition No. 104 of the exemption notification. Whether the aircraft was used by the appellants only for providing non-scheduled (passenger) services as defined in clause (b) of the Explanation to Condition No. 104 of the exemption notification? - HELD THAT:- Non-scheduled (charter) services have been defined in clause (c) to mean services provided by a non-scheduled (charter) air transport operator, for charter or hire of an aircraft to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in holding that the decision of the earlier division bench in Sameer Gehlot had been rendered per incuriam as neither it was pointed out that provisions of a Statue or a judicial authority of binding nature had been ignored. Infact, as noticed above, all that the division bench in King Rotors observed was that the post importation nature of the subjects of undertakings was not appreciated by the bench . Analysis of the division bench decisions - HELD THAT:- A perusal of the order passed in East India Hotels would indicate that the aircraft had been purchased by East India Hotels on 21.05.2007 and the show cause notice alleging violation of the conditions of the exemption notification was issued on 27.06.2008. This show cause notice was, however, adjudicated upon by order dated 27.07.2010. Thus, it would be the CAR 1999 that would be applicable and not CAR 2010. The two decisions in Sameer Gehlot and King Rotors could not, therefore, have been distinguished for the reason that CAR 2010 would apply and not CAR 1999. The conclusion, therefore, that emerges is that King Rotors does not lay down the correct position of law. The appeals may now be listed before the regular div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter of an aircraft, came up before division benches of the Tribunal orders were passed to connect them with Customs Appeal No. 74 of 2010. This is how all the aforesaid Customs Appeals have been placed before this larger bench. It needs to be stated that in Customs Appeal No. 338 of 2009, which is pending before the Principal Bench of the Tribunal at Delhi, submissions have been advanced as an intervenor. 3. The exemption notification dated 03.05.2007, on which revolves the entire controversy, grants 'nil' rate of duty on import of aircraft for non-scheduled (passenger) services as well as non-scheduled (charter) services subject to Condition No. 104 that is required to be fulfilled by an importer of the aircraft for availing the benefit of the exemption notification. The relevant portion of the said exemption notification is reproduced below: "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 104 would show that at the stage of import, the importer should have an approval from the competent authority in the Ministry of Civil Aviation, MCA and the importer should, at the time of importation, also furnish an undertaking to the customs authority that the aircraft will be used for the specified services, namely non-scheduled (passenger) services or non-scheduled (charter) services. The undertaking should also state that the importer shall pay on demand, the duty payable, in the event of his failure to use the imported aircraft for the specified purpose. 5. The appellants hold permits provided by DGCA for non-scheduled (passenger) services. These permits have been renewed from time to time and have been endorsed for each additional aircraft/helicopter imported by the appellants. Such operations have been carried out by the appellants without any objection from either the DGCA, which had issued the permit or from the MCA. After 03.05.2007, when the conditional exemption notification was issued, the appellants started availing the benefit of the said exemption. The customs authority, however, raised an issue that the operations carried out by the appellants were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption has been granted at the time of import. The respondents, therefore, cannot be charged with violation of a pre-import Condition at a later point of time. If the Government wanted that the customs authorities should monitor the subsequent use of the aircraft, then it would have provided a suitable post-import Condition in the exemption notification. Of course, the Department can proceed in terms of the undertaking executed for violation of the terms of the undertaking but that has not been done in this case. Rather a show-cause notice has been issued invoking Section 28 of the Customs Act, 1962 vide paragraphs 25 and 27 of the notice. It is settled law that Section 28 can be invoked only in the case of short-levy, non-levy and erroneous refund. Where an exemption has been allowed after the importer has fulfilled the pre-import Conditions, such a case cannot be categorised either as a case of short-levy or as a case of non-levy. In the absence of any post-import Condition in the exemption notification, action cannot also be taken under Section 111(o) which, in any case, has not been invoked in the show-cause notice. 11. XXXXXXXXX. We also find that the exemption notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r services and not as a Condition of the exemption notification and further, they have submitted that the respondents have obtained the exemption as a non-scheduled (passenger) service operator for which they have received the necessary permit from the Civil Aviation authorities and which requires no published tariff. We are of the view that these submissions by the respondents have substance and in any case, the exemption obtained by them as an operator of non-scheduled (passenger) service, after receiving the necessary permit from the Civil Aviation authorities, does not require to be denied on account of not having a published tariff for the charter services undertaken by them. Moreover, this was also not a ground taken in the show-cause notice." (emphasis supplied) 8. In King Rotors, that was decided on 17.06.2011, the division bench noticed that since the permit was issued for operating "non-scheduled (passenger) services, the operator could not have used the helicopter for non-scheduled (charter) services. The bench noticed that after import, the helicopter had been chartered/ hired by Heligo, which had subsequently entered into charter contracts with third party companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not exceeding nine seats excluding crew seats." "Charter CAR" cannot be applicable to the appellants' twin-engined (vide Panchanama dated 11-9-2008) helicopter which is 13-seater (vide Annexure-1 to Permit No. 11/2006 dated 29-11-2006, "No Objection for Import" dated 13-3-2008 and clause (3.2) of "Charter-Hire Agreement" dated 14-4-2008). The applicable "CAR" is "Passenger CAR". DGCA's "No Objection for Import" itself indicates the "purpose for which aircraft is required", which is "Non-scheduled Air Transport (Passenger) Services". DGCA's covering letter dated 13-3-2008 says: "This office has No Objection to the import of One Bell-412 helicopter S.No. 36454 for Non-scheduled Air Transport (Passenger) Services". Thus it is abundantly clear from the records that DGCA's permission to the assessee is only to operate non-scheduled passenger services with the helicopter imported by them. If the parenthetic appearance of both the words 'passenger' and 'charter' ["(Passenger/Cargo/Charter)"] in the description of air transport services in the printed format of Permit No. 11/2006 created any doubt in the appellants' mind, it was enough for them to read the mind of the authority which iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 in the context of defining the expression "non-scheduled (passenger) services", it is permissible to take aid of the said Rule in ascertaining the connotation of the word "passenger" used in the expression "non-scheduled (passenger) services". Rule 3(39) defines "passenger aircraft" as aircraft which effects public transport of passengers. "Public transport" is also seen defined under Rule 3(45). In the instant case, it is not the claim of the appellants that they used the helicopter for public transport of passengers. They only allowed Heligo to hire the aircraft for a remuneration and use it for transporting employees of Oil & Gas/allied companies between Vishakapatnam airport and offshore oil/gas fields under contracts awarded to Heligo by those companies. The appellants were unable to use the copter (during the tenure of the agreement) for any other purpose without the prior consent of Heligo. They did not have any control over the manner in which the helicopter was used by Heligo (who professedly entered into charter contracts with "third party companies" in respect of the aircraft which was accordingly used for transporting the personnel of these companies) and the copter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again examined by a division bench of the Tribunal in Global Vectra Helicorp Ltd. vs. Commissioner of Cus. (Import), Mumbai, 2015 (329) E.L.T. 235 (Tri. - Mumbai) that was decided on 29.04.2015. The division bench examined whether the importer of helicopters had breached Condition No. 104 rendering them liable for payment of duty on the import of two helicopters since they had previously claimed exemption in terms of the exemption notification. The division bench noticed that the operator had been granted permit by the DGCA to import helicopter for providing non-scheduled (passengers) services and that the department alleged that the assessee had not used these helicopters for providing the aforesaid services but for exclusive charters services for certain companies and charged them on monthly fixed charges as well as on flying basis. The division bench found that there was no violation by the operator of the aircraft. The division bench distinguished the earlier decision rendered by the division bench in King Rotors for the reason that there was no surrender of the helicopter in question, as was in the case of King Rotors, and all the activities were carried out by the operator i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of NSOP for passenger permit. DGCA being the appropriate licensing authority, is the best judge to decide as to whether the activity of the importer comes within the ambit of the license issued to the appellant by it. 7.1 Further, we find that in the case of the appellant unlike in the case of King Rotors' case (supra), there is no surrender of the helicopter in question and all the activities as the service provider, such as maintenance/insurance, salaries to the Pilot, etc., have been carried out by the appellant-importer. Thus, the facts in this case are clearly distinguishable from the facts in the King Rotors case and as such, we hold that the learned Commissioner has erred in relying on the earlier ruling of the Tribunal in the case of King Rotors case (supra)." (emphasis supplied) 11. A division bench of the Tribunal in Reliance Transport & Travels Ltd. vs. Commr. of Customs, New Delhi, 2019 (369) E.L.T. 1317 (Tri. - Del.), in its decision dated 15.10.2018, after referring to the earlier division bench decisions of the Tribunal in Sameer Gehlot and Global Vectra Helicorp held that the appellant had rightly availed the benefit of the exemption notification. The decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for deciding the present appeal. Further, we note that Hon'ble Supreme Court in the case of Collector v. Alnoori Tobacco Products - 2004 (170) E.L.T. 135 (S.C.) have held that in respect of following precedent, have observed that circumstantial - one additional or different facts may make a world of difference between conclusion in two cases. Disposal of cases by following settled precedent decision, is not proper. We further find that the contention raised by the Ld. AR for Revenue that the said aircraft was mainly used by the Directors, Executives and their close relatives, friends of RADAGPL is of no consequence as the CAR requirement under Section 3 of Air Transport Series Part III Issue II, dated 1-6-2010, which applies to the existing permit holder, clarifies in paras 2.4 and 2.5 as follows: "2.4 The carriage of passengers by a non-scheduled operator's permit holder may be performed on per seat basis or by way of chartering the whole aircraft on per flight basis. There is no bar on the same aircraft being used for either purpose as per the requirement of customers from time to time. The operator is also free to operate series of flights on any sector within India by selli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yees of group companies, or even pre dominant use by group companies for their employees did not reduce the aircraft to a 'private aircraft' and that offering of the imported aircraft on charter was not violative of the condition for exemption. The Tribunal, after noticing the earlier division bench decisions of the Tribunal in Sameer Gehlot and Reliance Transport on the one hand, and King Rotors on the other, dismissed the appeal filed by department and observed as follows: "35. We take note that the impugned order has placed reliance on various clarifications issued by Director General of Civil Aviation. That these are in favour of the aircraft operators is not in dispute. The harmonious construct of the finding on obligation of performance, the lack of acceptability of the sole decision relied upon by Revenue, the consistent stand adopted by the Tribunal in all other decisions, the renewal of the permit to operate as 'non-scheduled passenger service' by the competent statutory authority and the clarifications issued by that authority, in general as well as to the Commissioner of Customs, leaves us with no option but to dismiss the appeal of Revenue." 14. In M/s. East India Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... none but the public will satisfy the continuous compliance of the said undertaking. Absence of any of these Conditions will make the usage different from NSOP/C services and the said variation will definitely amount to violation of the said undertaking and the benefit of exemption from payment of customs duty as was extended to the importer of aircraft at the time of import thereof shall not be allowed to continue to still be available to the importer. xxxxxxxxxxx 25. In the present case, neither the Civil Aviation Rules nor Aircraft Rules empower DGCA to investigate about the compliance of the undertaking. The undertaking is given in furtherance of the notification issued by the Customs Department in compliance of the Statutory Provisions of the Customs Act 1962. The verification as to whether the benefit of exemption from payment of customs duty should continue or not is opined definitely to lie with Customs Department only. xxxxxxxxxxx 28. The Department's circular that the benefit of notification is still available if the aircraft is providing NSOP/C certificate to the related or group company the same also doesn't hold good in the present case because there is no evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icitor General in support of the appeals and learned counsel appearing for the assessees. We have gone through the statement of case filed on behalf of the appellant and do not find that the issues raised come within the four corners of Section 130-E of the Customs Act, 1962. We, therefore, do not see any reason to entertain these appeals in our jurisdiction under Section 130-E of the Customs Act, 1962. The civil appeals are, therefore, dismissed leaving all questions of law open to be agitated in an appropriate case." 16. It is stated that the appeal filed by the department against the decision rendered by the Tribunal in Global Vectra Helicorp is still pending disposal before the Supreme Court. 17. It would be seen from the aforesaid that all the division benches of the Tribunal, except the division benches deciding King Rotors and East India Hotels, have followed the earlier decision of the Tribunal in Sameer Gehlot that held that the aircraft operator was entitled to the benefit of the exemption notification. The decision of the Tribunal in Sameer Gehlot was placed before the division benches deciding King Rotors and East India Hotels. In King Rotors it was considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (S.C); Civil Appeal No. 87-87 of 2020 decided on 08.01.2020 (S.C.); (ii) Whether the appellant has violated one of the Conditions mentioned at serial no. 104 of notification no. 21/2002-Cus dated 01.03.2002, as amended by notification no. 61/2007-Cus dated 03.05.2007, in a case where pre-defined locations between the two or more places have not been published nor operated according to a published time- table as well when the time and place of departure/arrival is uncertain; (iii) Whether in terms of exemption notification, an Aircraft/Helicopter imported for non-scheduled operation passenger service can be used for non-scheduled charter service or vice versa and whether non publication of tariff, as prescribed in notification for non-scheduled charter services, can be said to be violative of Explanation (c) of Condition No. 104 of the notification dated 03.05.2007; (iv) Whether the aircraft imported by the appellant can be classified as "private aircraft" in view of approval granted by the Director General of Civil Aviation to import the aircraft and further grant of renewal of the permission from time to time to use the said aircraft for providing "non-schedule (passenger) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07, the effective rate of duty on the import of aircraft for non-scheduled air transport service was made 'nil'. This exemption notification was as a consequence of the statement made by the Hon'ble Finance Minister in the Parliament and it is reproduced: "Honourable Members are aware that I had proposed to levy customs duty, CVD and additional customs duty on import of aircraft excluding imports by Government and scheduled airlines. Ministry of Civil Aviation has made a strong representation in favour of exemption for aircraft imported for training purposes by flying clubs and institutes and for non-scheduled point-to-point and non-scheduled charter operators under conditions of registration to be specified and recommended by that Ministry. Since civil aviation is a nascent and growing industry, it has been decided to accept this request and exempt these categories also from the duties." (emphasis supplied) 23. A perusal of the aforesaid statement makes it clear: (i) The exemption was granted on the basis of strong representation made by the Ministry of Civil Aviation; (ii) The exemption was subject to the conditions of registration to be specified by the Ministry of Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be a non-scheduled (passenger) service within the meaning of clause (b) of the Explanation to Condition No. 104 of the exemption notification. 31. At the time when Condition No. 104 was inserted on 03.05.2007, Civil Aviation Requirement dated 08.10.1999, 1999 CAR dealing with non-scheduled (passenger) services as well as Civil Aviation Requirement dated 17.05.2000, 2000 CAR, dealing with scheduled (passenger) services, which had been issued under rule 133A of the Aircraft Rules, were in force. The expression 'non-scheduled air transport services (passenger)' has been defined, both under the 1999 CAR as also the 2000 CAR, as follows: "Non-scheduled air transport services (passenger) means air transport services other than scheduled air transport services as defined in the rule 3 of the Aircraft Rules, 1937." 32. It is keeping in mind the aforesaid factual position and the provisions of law that the submissions advanced by the learned counsel for the appellants and the intervenors, as also the learned special counsel appearing for the Department have to be considered. 33. Shri Tarun Gulati, learned senior counsel (assisted by Shri Kishore Kunal and Shri Manish Rastogi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dify the earlier clarifications and the amended Explanation to the exemption notification and, therefore, has retrospective operation. In support of this contention reliance has been placed on the judgments of the Supreme Court in Zile Singh vs. State of Haryana, (2004) 8 SCC 1, Yogendra Nath Naskar vs. CIT, (1969) 1 SCC 555 and Sone Valley Portland Cement Co. Ltd. vs. The General Mining Syndicate Pvt. Ltd. (1976) 3 SCC 852. 34. Shri P.R.V. Ramanan and Shri Ajay Jain, learned special counsel appearing for the Department made the following submissions: (i) Questions nos. (ii), (iv) and (vi) that have been framed by the larger bench are case specific and beyond the scope of the reference made to the larger bench; (ii) The reference made to the larger bench has not been rendered infructuous as the doctrine of merger would not apply, in view of the decision of the larger bench of the Tribunal in Kafila Hospitality & Travel Pvt. Ltd. vs. Commissioner of S.T., Delhi 2021 (47) G.S.T.L. 140 (Tri. - LB); (iii) The key expressions in clause (ii)(a) of Condition No. 104 of the exemption notification are 'only' and 'as the case may be'. The word 'as the case may be' is used when there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in holding that the earlier decision of the division bench in Sameer Gehlot was rendered per incuriam. In any view of the matter, the contention of the appellants that division bench in King Rotors should have referred the matter to the larger bench of the Tribunal, gets addressed as the matter is now before the larger bench. 35. The submissions advanced by the learned counsel for the appellants and the learned counsel for the intervenor, as also the learned special counsel for the Department have been considered. DOCTRINE OF MERGER 36. Learned counsel for the appellants pointed out the division bench of the Tribunal in Reliance Transport had decided the issue in favour of the importer of aircraft holding that the earlier decisions of the Tribunal in Sameer Gehlot and Global Vectra Helicorp would apply and the decision of the Tribunal in King Rotors was distinguished. The submission advanced was that the dismissal of the Civil Appeal filed by the Department before the Supreme Court against the decision of the Tribunal in Reliance Transport would amount to a declaration of law by the Supreme Court since the order of the Tribunal merged in the order of the Supreme Court. In sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision of the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law. The Supreme Court also observed that an order refusing Special Leave to Appeal does not attract the doctrine of merger, but if the order refusing Leave to Appeal is a speaking order, then the statement of law contained in the order of the Supreme Court is a declaration of law by the Supreme Court, which would be binding under article 141 of the Constitution. The Supreme Court also observed that on an appeal having been preferred or a petition seeking Leave to Appeal having been converted into an appeal, the jurisdiction of the High Court to entertain a review petition is lost. 42. It needs to be noted that Justice R. C. Lahoti (as His Lordship then was) had observed in Kunhayammed, which was decided on July 19, 2000, that the decision of the High Court or the Tribunal would merge in the order of the Supreme Court upon dismissal of the Civil Appeal, but subsequently in 2002, His Lordship in S. Shanmugavel Nadar vs. State of Tamil Nadu and Another, (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier division bench of the High Court in Pillai and, therefore, referred the matter to a Full Bench of the High Court. When the Full Bench of the High Court took up the hearing of the writ petitions, the aforesaid order of the Supreme Court dated September 10, 1986 was brought to its notice. The Full Bench held that since the appeal against the decision of the division bench in Pillai was dismissed by the Supreme Court, the decision of the High Court merged in the order of the Supreme Court and so the Full Bench could not examine the correctness of the law laid down by the division bench in Pillai. 44. It is against the aforesaid decision of the Full Bench that appeals were filed by Special Leave before the Supreme Court. The Supreme Court noted that the earlier order dated September 10, 1986 of the Supreme Court did not go into the question of constitutional validity of Act No. 13 of 1960 nor did the Supreme Court apply its mind to the correctness or otherwise of the view taken by the High Court in Pillai. The Supreme Court also noted that the appeals had been dismissed as not properly constituted and hence incompetent as the State of Tamil Nadu, which was a necessary party, had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition after the dismissal of an Appeal by the Supreme Court. A review petition would not be maintainable before the High Court after the dismissal of the Appeal by the Supreme Court, but the decision can be reconsidered by a larger bench of the High Court if the Supreme Court had not adjudicated on the merits of the order of the High Court. The Supreme Court, therefore, set aside the order of the Full Bench of the High Court and restored the appeal before the Full Bench to be heard and decided in accordance with law. The relevant portions of the judgment of the Supreme Court is reproduced below :- "10. Firstly, the doctrine of merger. Though loosely an expression merger of judgment, order or decision of a court or forum into the judgment, order or decision of a superior forum is often employed, as a general rule the judgment or order having been dealt with by a superior forum and having resulted in confirmation, reversal or modification, what merges is the operative part, i.e. the mandate or decree issued by the Court which may have been expressed in positive or negative forum. For example, take a case where the subordinate forum passes an order and the same, having been dealt wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the decision of this Court dated 10.9.1986 had the effect of resulting in merger into the order of this Court as regard the statement of law or the reasons recorded by the Division Bench of the High Court in its impugned order. The contents of the order of this Court clearly reveal that neither the merits of the order of the High Court nor the reasons recorded therein nor the law laid down thereby were gone into nor they could have been gone into. 12. Thirdly, as we have already indicated, in the present round of litigation, the decision in Varadaraja Pillai's case was cited only as a precedent and not as res judicata. The issue ought to have been examined by the Full Bench in the light of Article 141 of the Constitution and not by applying the doctrine of merger. Article 141 speaks of declaration of law by the Supreme Court. For a declaration of law there should be a speech, i.e., a speaking order. In Krishen Kumar v. Union of India and Ors., [1990] 4 SCC 207, this Court has held that the doctrine of precedents, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. In State of U.P. and Anr. v. Synthet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. When no reason are given, a dismissal simpliciter is not a declaration of law by the Supreme Court under Article 141 of the Constitution. In Indian Oil Corporation Ltd. v. State of Bihar and Ors., AIR (1986) SC 1780 this Court observed that the questions which can be said to have been decided by this Court expressly, implicitly or even constructively, cannot be re-opened in subsequent proceedings; but neither on the principle of res judicata nor on any principle of public policy analogous thereto, would the order of this Court bar the trial of identical issue in separate proceedings merely on the basis of an uncertain assumption that the issues must have been decided by this Court at least by implication. ******* 14. It follows from a review of several decisions of this Court that it is the speech, express or necessarily implied, which only is the declaration of law by this Court within the meaning of Article 141 of the Constitution. ******* ******* ******* 16. In the present case, the order dated 10.9.1986 passed by this Court can be said to be declarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court the decision of the High Court was no longer available to be reviewed. We need not here go into the question, whether it was a case of review, or whether the review application should have been filed in the High Court or Supreme Court. Such a question is not arising before us. 19. Under Article 141 of the Constitution, it is the law declared by the Supreme Court, which is binding on all Courts within the territory of India. Inasmuch as no law was declared by this Court, the Full Bench was not precluded from going into the question of law arising for decision before it and in that context entering into and examining the correctness or otherwise of the law stated by the Division Bench in M. Varadaraja Pillai's case and either affirming or overruling the view of law taken therein leaving the operative part untouched so as to remain binding on parties thereto. 20. Inasmuch as in the impugned judgment, the Full Bench has not adjudicated upon the issues for decision before it, we do not deem it proper to enter into the merits of the controversy for the first time in exercise of the jurisdiction of this Court under Article 136 of the Constitution. We must have the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application for condonation of delay and not on merits. 21. In this connection, the decision of this Court in S. Kalawati vs. Durga Prasad (1976) 1 SCC 696 may be strongly relied upon. In paragraph 7 of the said decision, this Court observed as follows: (SSC p. 699). "7. The principle behind the majority of the decisions is thus to the effect that where an appeal is dismissed on the preliminary ground that it was not competent or for non- prosecution or for any other reason the appeal is not entertained, the decision cannot be said to be a 'decision on appeal' nor of affirmance. It is only where the appeal is heard and the judgment delivered thereafter the judgment can be said to be a judgment of affirmance." 24. Keeping these principles as enunciated by this Court in the aforesaid three decisions in mind and applying the said principles in the facts of this case, we have no hesitation in our mind to conclude that the High Court in the impugned order did not at all consider that in the earlier revision order of the High Court, revisional application was rejected not on merits but only on the ground of delay. Therefore, it must be held that since earlier revision applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Supreme Court pointed out that since the reasons recorded by the High Court nor the law laid down had been dealt with by the Supreme Court, the statement of law contained in the division bench judgment of the High Court would continue to remain the decision of the High Court. Only the operative part of the order of the division bench stood merged in the decision of the Supreme Court and the remaining part of the order of the division bench of the High Court cannot be said to have merged in the order of the Supreme Court nor did the Supreme Court make any declaration of law within the meaning of article of 141 of the Constitution, either expressly or by necessary implications. In the present case also, the Supreme Court has not dealt with the reasons recorded by the Tribunal or the statement of law. It cannot, therefore, be contended that a declaration of law under article 141 of the Constitution had been made by the Supreme Court upon dismissal of the Civil Appeal by order dated 08.01.2020. 50. Thus, it is not possible to accept the contention of the learned counsel for the appellants that the reference to the larger bench has been rendered infructuous for the reason that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to mean service for transport by air of persons for any kind of remuneration whatsoever. There is no dispute that the appellants have used the aircraft for the transport of persons for remuneration. There is no stipulation or restriction or a condition in the said definition that a tariff should be published or that such service should be rendered only on per-seat basis and not by chartering or about the category or class of persons to be transported. Thus, the contention of the department that the appellants have rendered 'air transport service' to their group companies by carrying personnel of their group companies is not of any relevance as there is no prohibition in the said definition against any kind of persons to be transported. 56. Rule 3 (49) of the Aircraft Rules defines 'scheduled air transport service' to mean an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public. Thus, for an 'air transport service' to qualify as 'scheduled air transport service', it mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport service by way of charter of aircraft, while providing non-scheduled (passenger) services. 63. As noticed above, the definitions of air transport service and non-scheduled (passenger) service do not stipulate any restriction or impose a condition that such service should be rendered only on per-seat basis and not by chartering nor is there any stipulation in CAR 1999 issued by DGCA for grant of permits to operate non-scheduled air transport (passenger) services. In fact paragraph 9.2 of CAR 1999, which deals with non-scheduled air transport (passenger) services, categorically provides that a non-scheduled operator can conduct charter operations. 64. The submission advanced by learned special counsel appearing for the department is that an operator who has been granted a permit by the DGCA to operate non-scheduled (passenger) service cannot be permitted to carry out charter services for the reason that this would be in violation of the terms of the exemption notification and the undertaking given by the operator. Learned special counsel pointed out that non-scheduled (charter) services means services provided by a non-scheduled (charter) air transport operator who is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t needs to be noticed that Condition No. 104 specifically refers to the definitions contained in the Aircraft Rules as also Civil Aviation Requirements issued under the provisions of rule 133A of the Aircraft Rules. Both, CAR 1999 that deals with non-scheduled (passenger) services operator and CAR 2000 that deals with non-scheduled (charter) services operator define a non-scheduled air transport services (passenger) in the same manner as defined in clause (b) of the Explanation to Condition No. 104. 67. CAR 1999 contains the following relevant provisions: (a) There will be no restriction on the type and seating capacity of the aircraft to be importer/acquired by the applicant. (b) Non-scheduled operators can conduct charter/non-scheduled operations for transportation by air of persons, mail or goods. In such operations, the operators shall not publish their time schedules as the operations are of non-scheduled nature. 68. It is, therefore, clear that an operator providing non-scheduled (passenger) services can always provide such services either on individual seat basis or by chartering the entire aircraft and such a restriction is not contained either in Condition No. 104 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the two Civil Aviation Requirements:- Particulars Non-scheduled (passenger) service Non-scheduled (charter) service Applicability and Scope Applies to all aircraft without restriction on the type and seating capacity of the aircraft. (paragraph 5.1) Restricted to small aircraft not exceeding sitting capacity of 9 seats. (Paragraph 2 and Paragraph 6) Definition Clause Non-scheduled (passenger) service is defined as air transport services other than scheduled air transport services as defined in rule 3 of the Aircraft Rules. (Paragraph 2) Apart from defining non-scheduled (passenger) service, the CAR also defines charter operations to include an operation for hire and reward for which departure time, departure location and arrival location is specifically negotiated with the customer for the entire aircraft. Further, it is required that an aircraft operating for charter operations is not required to issue tickets. (Paragraph 3) Aircraft and airworthiness requirements There is no restriction on the basis of seating capacity. (Paragraph 5) Nine Seats (Paragraph 6) Eligibility requirement Requirement of Aircraft Maintenance Engineer is mandatory. (Paragraph 3.2(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a full aircraft charter. The NSOP holder may also enter into a long or short term lease contract to provide aircraft to a client including its operations, maintenance and other associated services." (emphasis supplied) 77. In regard to a specific query dated 16.08.2008 raised by the Commissioner of Customs, Mumbai, the DGCA interpreted the position of law in the following manner: "The matter has been examined in this office in light of the provisions of the Civil Aviation Requirements Section (CAR) 3 Series C Part III and Part V (copies enclosed). Paragraph 9.2 of the CAR (Part III), which relates to Non-Scheduled Operator's Permit (Passenger), clearly provides that Non-Scheduled Operators can conduct both charter as well as Non-Scheduled operations for transportation by air of persons, mail or goods. While there is no express provision regarding entering into long term arrangements for charter operations, yet this office feels that if the permit holder chooses to give such aircraft on long term lease along with crew (wet lease) for charter operations on behalf of the client, such operations will also fall under the category of charter operations. It is only the form o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from time to time. The operator is also free to operate a series of flights on any sector within India by selling individual seats but will not be permitted to publish time table for such flights. Operation of revenue charters to points outside India may also be undertaken as per paragraph 9.2. 2.5 A non-Scheduled Operator is also allowed to operate revenue charter flights for a company within its group companies, subsidiary companies, sister concern, associated companies, own employees, including Chairman and members of the Board of Directors of the company and their family members, provided it is operated for remuneration, whether such service consists of a single flight or series of flights over any period of time. ****** 2.7 This CAR applies to all Non-Scheduled Operator's Permit holders including to those, who have obtained their permits prior to the coming into force of this CAR. However, they shall comply with the requirements of Para 4.2 (b) of this CAR, within 06 months of the date of effectivity of the CAR. ****** 3.1 'Air transport service' means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in clause (b) of the Explanation, as analyzed above, does not require the publication of tariff. It is also seen that under rule 135 of the Aircraft Rules, 1937, it is only the air transport undertaking offering scheduled air transport services in accordance with rules 134(1) and 134(2) that are required to publish their tariff. Whether the aircraft can be used by members of public 86. The definition of "private aircraft" under rule 3(43) of Aircraft Rules, does not warrant the view that if tariff is not published, the use of aircraft would be private. In terms of rule 3(43), private aircraft is other than public transport aircraft. Public transport aircraft is defined in rule 3 (46) as aircraft which effects public transport and public transport is defined in rule 3(45) to mean all carriage of persons or things effected by aircraft for a remuneration of any nature whatsoever, and all carriage of persons or things effected by aircraft without such remuneration if the carriage is effected by an air transport undertaking. Air transport undertaking is defined in rule 3(9A) to mean an undertaking whose business includes the carriage by air of passengers or cargo for hire or rew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above initially by exemption notification dated 01.03.2007, entry no. 346B and Condition No. 101 was introduced in the exemption notification dated 01.03.2002 whereby the effective rate of duty on import of aircraft for scheduled air transport service was made 'nil'. As no exemption was granted to non-scheduled air transport service and private category aircraft, the Ministry of Civil Aviation made a strong representation for granting exemption for non-scheduled (passenger) service and non-scheduled (charter) services under conditions to be specified and recommended by the Civil Aviation Ministry. It is for this reason, as would be apparent from the statement made by the Hon'ble Finance Minister in the Parliament, that the exemption notification dated 03.05.2007 was issued granting 'nil' rate of duty on import of aircraft for non-scheduled (passenger) service as well as non-scheduled (charter) services subject to Condition No. 104. 92. The alleged misuse of the aircraft, as suggested by the customs authority, has repeatedly been clarified by DGCA and the Civil Aviation Requirements relating to non-scheduled (passenger) services. It is the DGCA which is empowered to issue the Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was any misrepresentation. Thus, when an advanced licence had been issued and not questioned by the licencing authority, the customs authorities could not refuse exemption on an allegation that there was a misrepresentation and even if there was any misrepresentation, it was for the licencing authority to take steps. The relevant portion of the judgment of the Supreme Court is reproduced below: 13. As regards the contention that the appellants were not entitled to the benefit of the exemption notification as they had misrepresented to the licensing authority, it was fairly admitted that there was no requirement, for issuance of a licence, that an applicant set out the quantity or value of the indigenous components which would be used in the manufacture. Undoubtedly, while applying for a licence, the appellants set out the components they would use and their value. However, the value was only an estimate. It is not the respondents' case that the components were not used. The only case is that the value which had been indicated in the application was very large whereas what was actually spent was a paltry amount. To be noted that the licensing authority having taken no steps to can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the Customs Notification which was in issue was that the exempted goods shall not be sold, loaned, transferred or disposed of in any manner. The Supreme Court held that customs had jurisdiction to investigate whether said condition was violated. Verification of compliance with the said condition was one purely of fact, namely whether the goods had been sold or otherwise transferred, and did not involve any interpretation of the provisions of another enactment. This decision will also, therefore, not help the respondents. 99. It, therefore, follows that it is the jurisdictional authorities under the Civil Aviation Ministry that alone can monitor the compliance of the conditions imposed and the Customs Authorities can take action on the basis of the undertaking submitted by the importer only when the authority under the Civil Aviation Ministry holds that the conditions have been violated. Requirement of issuing air-tickets 100. The definitions of 'air transport service' and 'non-scheduled (passenger) service' do not stipulate any restriction or condition that such service should be rendered only on per-seat basis. Nor is there any stipulation in the said definitions for is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations. 105. This apart, even if air tickets are not issued to the passenger, it may only lead to non fulfillment of the liability. The consequence is itself mentioned in rule 3(2) to the Second Schedule. Thus, there cannot be any violation of the conditions, if tickets are not issued. Per incuriam. 106. This issue has arisen because of the view taken by the division bench in King Rotors that the earlier decision of the division bench in Sameer Gehlot was per incuriam. The relevant paragraphs of the decision of the division bench in King Rotors on this issue are reproduced below: "24.19 With great respect, we have to say that we are unable to persuade ourselves to follow Sameer Gehlot (supra) as a binding precedent, for the following reasons:- (a) The decision in that case holding the importer (AASPL) to be eligible for exemption from payment of duty of customs on the helicopter under Notification 21/2002-Cus. (serial No. 347B) as amended by Notification 61/2007-Cus. is based inter alia on the premise that the second part [i.e., clause (ii)] of condition No. 104 is also a pre-importation condition. This part of the condition is to the effect that the importer should furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am. 108. It is not possible to accept this reasoning given by the division bench for holding that the earlier division bench decision in Sameer Gehlot was rendered per incuriam. 109. The principle of per incuriam has been developed in relaxation to the rule of stare decisis. While referring to exception to the rule of stare decisis, it has been observed in 'Precedent in England Law' by Rupert Cross, 1961 Edition: "No doubt any court would decline to follow a case decided by itself or any other court (even one of superior jurisdiction), if the judgment erroneously assumed the existence or non-existence of a statute, and that assumption formed the basis of the decision. This exception to the rule of stare decisis is probably best regarded as an aspect of a broader qualification of the rule, namely, the courts are not bound to follow decisions reached per incuriam." 110. In State of U.P. vs. Synthetics and Chemicals Ltd (1991) 4 SCC 139, the Supreme Court observed: "40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rule apparently applies even though the earlier court knew of the statute in question. If it did not refer to and had not present to its mind, the precise terms of the statute. Similarly, a court may know of the existence of a statute and yet not appreciate its relevance to the matter in hand; such a mistake is again such incuriam as to vitiate the decision. These are the commonest illustrations of decision being given per incuriam. In order that a case can be decided per incuriam, it is not enough that it was inadequately argued. It must have been decided in ignorance of a rule of law binding on the court, such as a statute. (See the observations in 'Salmond on Jurisprudence" Twelfth Edition, pages 150 and 169)." 114. It, therefore, follows that the principle of per incuriam can be applied for such decisions which have been given in ignorance of some statutory provision or some authority that is binding. 115. The earlier decision may have appeared to be incorrect by a bench of co-ordinate jurisdiction on the ground that a possible aspect of the matter was not considered or more aspects should have been considered. This cannot be a reason to hold that the earlier decision by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e division bench in King Rotors was not justified in holding that the decision of the earlier division bench in Sameer Gehlot had been rendered per incuriam as neither it was pointed out that provisions of a Statue or a judicial authority of binding nature had been ignored. Infact, as noticed above, all that the division bench in King Rotors observed was that 'the post importation nature of the subjects of undertakings was not appreciated by the bench'. Analysis of the division bench decisions 119. The division bench of the Tribunal in King Rotors held that since the flight operations are not open to the public, the aircraft would not be considered to have been used for non-scheduled (passenger) services. This view, as discussed above, proceeds on an incorrect appreciation of the definition of non-scheduled (passenger) services. 120. The division bench of the Tribunal in East India Hotels held that published tariff to the public is a mandatory requirement of a non-scheduled (passenger) service and so if the tariff is not published, the use of the aircraft would be as a private aircraft. It was also held that it is the customs department that has to ensure compliance of the under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not, therefore, have been distinguished for the reason that CAR 2010 would apply and not CAR 1999. 123. The conclusion, therefore, that emerges is that King Rotors does not lay down the correct position of law. 124. Thus, for the reasons stated above, the answers to the reference are as follows: (i) The reference made to the larger bench has not been rendered infructuous on dismissal of the Civil Appeal filed by the department against the order of the Tribunal in Reliance Transport; (ii) The appellants have not violated condition (b) of the Explanation contained in the exemption notification; (iii) The aircraft imported for non-scheduled (passenger) services can be used for non-scheduled (charter) services; (iv) Aircraft imported by the appellants cannot be classified as private aircraft; (v) The customs authority cannot examine the validity of the permission granted by the DGCA, in the absence of cancellation of the permit by the DGCA; (vi) It is not mandatory for the importer to issue air tickets for providing non-scheduled (passenger) service; (vii) CAR 2010 merely amalgamates CAR 1999 and CAR 2000 to provide a uniform code for operation of non-scheduled air ..... 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