Cus - Notfn. 12/2012-Cus has been issued in public interest- Therefore, it is not correct on part of Revenue to state that since purpose of import of aircraft is in nature of personal use and not for public use the benefit should be denied: AAR
By TIOL News Service
NEW DELHI, AUG 30, 2016: APPLICANT is a public limited company proposing to import aircraft for providing non-scheduled (charter) service - they intend to charter the aircraft imported to related companies, primarily for use by the related company's top executives, directors, investors, promoters and their family members/friends, as revenue flights.
They seek ruling from the Authority on -
Whether the benefit of the Notification No. 12/2012-Cus is available to NSOP (Non-Schedule Operator's Permit) holder for the following categories of revenue flights proposed to be undertaken -
a) Use by the permit holder's employees/directors/investors and their family/friends, not necessarily for business purposes.
b) Charter the aircraft to group companies for use by their employees/directors/investors and their family/friends, not necessarily for business purposes
c) Lease the aircraft to group companies for use by their employees/directors/investors and their family/friends, not necessarily for business purposes.
Revenue submits -that the intended purpose of this aircraft is in the nature of personal use and not for public use; that the aircraft is intended to be used for the personal use of their employees/directors/investors and their family/friends, not necessarily for business purposes - exemption notification (Sr. No. 453 of Notification No. 12/2012-Cus) does not cover these situations to be eligible to claim the benefit of the said notification - As the public interest is always a guiding factor in exemption and as the applicant does not fall within the scope of the notification, the application made for advance ruling may be rejected.
Ruling by Advance Rulings Authority:
+ Both the conditions in condition 77 annexed to Notification 12/2012-Cus[Sr. No. 453] make it clear that approval of competent authority is required for import of aircraft for providing non-scheduled (passenger) services or non-scheduled (charter) services and importer is required to furnish undertaking to the Deputy/Assistant Commissioner of Customs at the time of import to the effect that the aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services, as the case may be.
+ Both these conditions have to be read in conjunction with Explanation 2 to the notification, which clarifies that the use of such imported aircraft by a non-scheduled (passenger) operator for non-scheduled (charter) services or by a non-scheduled (charter) operator for non-scheduled (passenger) services, shall not be construed to be a violation of the conditions of import at concessional rate of duty. It is noticed from the application filed by the applicant that the applicant is proposing to import aircraft for providing non-scheduled (charter) services; therefore, applicant may use the aircraft imported for providing non-scheduled (passenger) services or non-scheduled (charter) services.
+ Paragraph 2.5 of CAR issued in pursuance of Rule 133A of the Aircraft Rules, 1937 is regarding operation and use of aircraft and same is part of Explanation I (c) to Notification No. 12/2012-Cus. Therefore, the contention of Revenue that provisions of CAR 2.5 and 2.6 cannot be invoked to avail concessions/facility/ provisions, are not correct. It also noticed that the subject notification as well as contents of CAR does not debar the use of said aircraft for other than business purposes. In the absence of any such restriction, aircraft can be used for other than business purposes.
+ Notification No. 12/2012-Cus has been issued by the Central Govt. in public interest. As discussed, benefit of exemption notification has been extended to operators subject to fulfillment of conditions mentioned therein. Therefore, it is not correct on the part of the Revenue to state that the applicant does not fall within the scope of the notification.
Ruling on the application:
The benefit of the Notification No. 12/2012-Cus is available to NSOP (Non Schedule Operator's Permit) holder for the following categories of revenue flights (with published tariff) proposed to be undertaken;
a) Use by the permit holder's employees/directors and their family, not necessarily for business purposes.
b) Charter the aircraft to group companies for use by their employees/directors and their family, not necessarily for business purposes
c) Lease the aircraft to group companies for use by their employees/directors and their family, not necessarily for business purposes.
The application was allowed.
(See 2016-TIOL-23-ARA-CUS)
