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TMI Blog2024 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ted was that if the aircraft is used for carriage of persons for remuneration, it is a public transport aircraft and not a private aircraft. Noticing the facts of the case, there is no dispute that the respondent had used the aircraft for the transport of persons for remuneration as there is no prohibition in the definition of Air Transport Service as defined under Rule 3(9) of Aircraft Rules for transporting the employees/personnel of the group companies. Applying the analogy of the Larger Bench in M/s.V.R.L. Logistics, we find that in terms of the definition of Scheduled Air Transport Service in Rule 3(4), the respondent does not satisfy the conditions enumerated in the definition. Therefore, the services rendered were other than scheduled (Passenger) air transport service and therefore, ipso facto were non-scheduled (Passenger) service as defined in clause (b) of the explanation to Condition No.104 of the exemption notification. Thus, the controversy has been settled by the decision of the M/s.V.R.L. Logistics [ 2023 (1) TMI 1378 - GUJARAT HIGH COURT ] and following the same, we do not find any reason to interfere with the impugned order. The Tribunal concluded that the aircraft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or on charter basis (hiring the full aircraft) and since all the flights were charter flights, it cannot be said that the Aircraft was used for private purpose. On reviewing the impugned order, Revenue has filed the present appeal before this Tribunal. 4. We have heard Shri P.R.V. Ramanan, learned Special Counsel for the Revenue and Shri B.L. Narasimhan, learned counsel for the respondent. 5. Learned Special Counsel submitted that the Permit was issued by the DGCA to the respondent for operating NSOP (Passenger) Services whereas they used it for providing charter services to its group companies and thereby violated the provisions of DGFT Notification. The undertaking given by GMR was only for providing NSOP (Passenger) services and not for non-scheduled (Charter) services and the same cannot be construed to cover the charter services and hence, GMR failed to satisfy the conditions applicable to the non-scheduled charter services. Learned Special Counsel heavily relied on the decision of the Delhi High Court in M/s.East India Hotels Ltd. Vs. Commissioner of Customs, Customs, Central Excise and CGST, New Delhi 2023 (2) TMI 47 - Delhi High Court , where the High Court affirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (9) TMI 1300 - CESTAT New Delhi affirmed by Hon'ble Delhi High Court 2023 (4) TMI 514 -Delhi High Court (iii) M/s.Taneja Aerospace and Aviation Ltd. Vs. Commissioner of Customs (Preventive), New Customs House, Delhi 2022 (10) TMI 70-CESTAT New Delhi affirmed by Hon'ble High Court 2023 (3) TMI 304 (Delhi HC) (iv) M/s.Chimes Aviation Private Limited Vs. Commissioner of Customs, Delhi 2023 (1) TMI 1056 - CESTAT New Delhi (v) M/s. Ligare Aviation Limited Vs. Commissioner of Customs (Preventive) 2023 SCC Online CESTAT 163 7. Before adverting to the controversy as to whether the respondent had violated the conditions of the exemption notification i.e. though the permit was issued by the DGCA to import the aircraft for providing the NSOP (Passenger) services, it was utilised for providing non-scheduled charter services, it is necessary to quote the relevant portion of the exemption notification as under:- No. Chapter or Heading or subheading Description of goods Standard rate Condition no. 347B 8802(except 8802 60 00 All goods NIL 104 Condition No.104: (i)....... (ii) the importer furnishes an undertaking to the Deputy Commissioner of Customs or As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duled operation (Passenger) service can be used for non-scheduled charter services or vice-a-versa and whether the aircraft imported can be classified as 'private aircraft'. 10. The relevant observations of the Larger Bench, particularly with reference to the nature of services relating to non-scheduled (Passenger) services or (Charter) services, necessary for the present case also are set out below:- "Non-scheduled (Passenger) operator can carry out charter service" "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 nonscheduled air transport (passenger) services. In fact paragraph 9.2 of CAR 1999, which deals with nonscheduled air transport (passenger) services, categorically provides that a non-scheduled operator can conduct charter operations. 68. It is, therefore, clear that an operator providing non-scheduled (passenger) services can always provide such services either on individual seat basis or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stry of Civil Aviation, namely Director General of Civil Aviation to mean that the appellants had not used the aircraft for non-schedule passenger service in terms of the permit issued by the said authority. 104. Under the Carriage by Air Act, 1972, the issuing of tickets is governed by the Second Schedule. Further, as per section 8 of the said Act, the Schedule will only be applicable to domestic carriage, once a notification is published applying the said provision to domestic carriage. In this regard, a notification dated 30.03.1973 was published in the Gazette, wherein Part I and II of Second Schedule dealing with the passenger tickets were not notified to apply to domestic carriage. Therefore, there is no requirement for issuing the tickets under the said Act for domestic carriage. In any event, in terms of paragraph 3 of the CAR 2000, no tickets are required to be sold for carrying out charter operations. 105. This apart, even if air tickets are not issued to the passenger, it may only lead to non fulfilment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aircraft is based by the public. Thus there is no dispute that the aircraft was used by the public at large and therefore, the aircraft was not a private aircraft and was never used for private purpose. 14. We may now examine whether the test laid down by the Larger Bench in M/s.V.R.L. Logistics for the use of the aircraft as nonscheduled (Passenger) service is satisfied, i.e. : "i) the use should be for air transport service and ii) such air transport service should be other than scheduled (passenger) air transport service as defined in rule 3 of the Aircraft Rules." Noticing the facts of the case, there is no dispute that the respondent had used the aircraft for the transport of persons for remuneration as there is no prohibition in the definition of 'Air Transport Service' as defined under Rule 3(9) of Aircraft Rules for transporting the employees/personnel of the group companies. Applying the analogy of the Larger Bench, we find that in terms of the definition of 'Scheduled Air Transport Service' in Rule 3(4), the respondent does not satisfy the conditions enumerated in the definition that : - "(i) It must be undertaken between the same two or more places; (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the meaning of 'air transport service' as defined in Rule 3(9) of the Aircraft Rules, it is essential that the same is provided for some kind of remuneration. Clearly, flight service for no remuneration at all would not qualify to be considered as air transport service within the meaning of sub-rule (9) of Rule 3 of the Aircraft Rules. 32. In the facts of the present case, the appellant has used the aircraft for its own use without any remuneration whatsoever, either from the passengers transported by it or from any other person. In the circumstances, it would be difficult to accept that the appellant has used the aircraft for providing 'air transport service' within the meaning of Rule 3(9) of the Aircraft Rules." Thus, the determinative factor noticed by the High Court in the case of M/s. East India Hotels Ltd. was evidently the factor of remuneration and in view thereof concluded that the conditions of exemption notification were not complied with as the appellant therein had not used the aircraft for rendering any 'Air Transport Service' within the meaning of Rule 3(9) of the Aircraft Rules. We are, therefore, of the view that the decision of the Delhi High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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