The central legal point established in the judgment is that the exemption condition for customs duty would be satisfied if the imported aircraft is used for non-scheduled (passenger) services or non-scheduled (charter) services, as per the interpretation of the Exemption Notification and related legal provisions.

JUDGMENT

Vibhu Bakhru, J. We have heard the counsel for the parties.

2. The Revenue has filed the present appeal impugning an order dated 22.09.2022 (Final Order No.50920-50928/2022, hereafter the `impugned order') passed by the Customs, Excise & Service Tax Appellate Tribunal (hereafter the `Tribunal') in Customs Appeal No.415/2009 filed by the respondent.

3. The impugned order is a common order which also disposed of the Revenue's cross objections (Cross Objection No.212/2009) in Customs Appeal No.415/2009 as well as eight other appeals filed by the Revenue.

4. The principal controversy involved in the present appeal relates to the compliance of Condition No.104 of the Exemption Notification No.21/202-Cus dated 01.03.2002 as amended by Notification No.61/07-Cus dated 03.05.2007 (hereafter the `Exemption Notification').

5. The Commissioner of Customs (Preventive) had issued a show cause notice dated 06.08.2008 in respect of three helicopters, which were imported by the respondent by availing the benefit of the Exemption Notification. It was, inter alia, alleged in the said show cause notice that the helicopters (Registration No.VT-AZV and Registration No.VT-AZU) were imported for `non-scheduled air transport (passenger) service'; however, the said helicopters were not used for the said purpose. It was alleged that the respondent has not complied with the Civil Aviation Requirement, Section 3, Air Transport Service `C', Part 3 dated 08.10.1999, which requires the non-scheduled operators to issue passenger tickets in accordance with the provisions of Carriage by Air Act, 1972. It was further alleged that the respondent had charged fixed monthly charges for the period August, 2007 to January, 2008 from M/s Vectra Aviation Pvt. Ltd. (hereafter `Vectra') - a group company of the respondent - therefore the helicopters were not used for non-scheduled (passenger) services. It was alleged that this was in violation of the Condition No.104 of the Exemption Notification and thus the respondent was liable to pay duty.

6. In respect of another helicopter (Registration No.VT-AZX), it was, inter alia, alleged that the same was given on a long-term lease contract to M/s Dhillon Aviation Pvt. Ltd. and the same was in violation of the Exemption Notification as the permit obtained by the respondent was for non-scheduled (passenger) services.

7. In view of the allegations contained in the show cause notice, the respondent was called upon to show cause as to (a) why the helicopters should not be confiscated under Section III(d) and 111(o) of the Customs Act, 1962 (hereafter the `Customs Act'); (b) penalty under Sections 112 and 114A of the Customs Act not be imposed; (c) and an amount of Rs.23,79,24,458/- along with interest be not recovered as customs duty in respect of the three aircrafts.

8. A tabular statement setting out the import details and the breakup of the customs duty demanded in respect of the three aircrafts is set out below:

* Sold on 19.03.2008"

9. Thereafter, by an order dated 27.04.2009 (Order-in-Original), the Adjudicating Authority confirmed the demand of Rs.21,21,95,030/- along with penalty of Rs.5,00,00,000/- under Section 112(a) of the Customs Act in respect of the two helicopters bearing registration signs VT-AZU and VT-AZV. In addition, a redemption fine of Rs.5,00,00,000/- was also imposed in respect of the helicopter bearing registration sign VT-AZU. However, the custom duty demand of Rs.2,57,29,428/- in respect of the helicopter bearing registration sign VT-AZX was dropped.

10. The Adjudicating Authority found that the allegation that conditions of the Exemption Notification were not satisfied on account of private use by the group company of the