Escorts Limited Vs Commissioner of Customs (Preventive) (CESTAT Delhi)
The case of Escorts Limited vs Commissioner of Customs (Preventive) dealt with the customs duty and associated penalties on the import of a Helicopter Bell 407 by Escorts Limited. The core issue revolved around whether the helicopter was used in accordance with the conditions stipulated in the exemption notification, specifically for non-scheduled passenger services (NSOP).
Background and Appeal
The appeal challenged the Order-in-Original No.26/HKC/Commr/2010 dated September 22, 2010, which confirmed the duty demand, redemption fine, and penalties under Section 112(a) of the Customs Act, 1962. The helicopter, imported under Permit No.02/2000 issued by the DGCA, had its permit renewed regularly and was supported by a ‘No Objection Certificate’ for providing NSOP (Passenger) services. The appellant availed an exemption under Notification No.21/2002-Cus as amended by Notification No.61/2007-Cus.
Issue Raised
A show cause notice was issued on September 18, 2009, alleging that the helicopter had been used for NSOP (Charter) services instead of NSOP (Passenger) as undertaken. It also claimed that the appellant had not issued tickets to passengers, thus violating Condition No.104 of the exemption notification. The adjudicating authority confirmed the differential duty but ruled that since the duty was not demandable under Section 28 of the Customs Act, no interest could be levied. However, the penalty under Section 112(a) was upheld against the appellant.
Tribunal’s Observations
The issue of whether a permit under NSOP (Passenger) could be used for charter services was not new. It had been settled by the Larger Bench of the Tribunal in the case of M/s. V.R.L. Logistics Ltd. vs Commissioner of Customs, Ahmedabad, affirmed by the Gujarat High Court. Following this decision, the Tribunal had consistently ruled in favor of the assessee in several cases, including Reliance Commercial Dealers Ltd., Global Vectra Helicorp Limited, and others.
