$~21 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 01.03.2023 + CUSAA 10/2023 & CM APPL. 9883/2023 & CM APPL.

9884/2023 COMMISSIONER OF CUSTOMS, (PREVENTIVE), NEW CUSTOMS HOUSE, NEW DELHI ..... Appellant Through: Mr Ravi Prakash, Senior Standing Counsel with Mr Aman Rewaria, Advocate.

versus M/S TANEJA AEROSPACE AND AVIATION LTD. ..... Respondent Through: Mr Kishore Kunal, Mr Manish Rastogi and Ms Runjhun, Advocates. CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE AMIT MAHAJAN VIBHU BAKHRU, J.

1. The Revenue has filed the present appeal impugning an order dated 22.09.2022 (Final Order No.50929/2022) passed by the Customs Excise and Service Tax Appellate Tribunal (hereafter ‘the Tribunal’)

in Customs Appeal No. 57/2010.

2. The respondent had filed the aforementioned appeal (Customs Appeal No. 57/2010) impugning an order-in-original dated 20.11.2009, whereby the Adjudicating Authority (Commissioner of Signature Not Verified Customs) had raised a demand of ₹6,22,67,295/- (Rupees six crores twenty two lacs sixty seven thousand two hundred and ninety five) and further imposed a penalty of ₹3,00,00,000/- (Rupees three crores) under Section 112 of the Customs Act, 1962 (hereafter ‘the Customs Act’). In addition, the Commissioner also directed confiscation of the aircraft imported by the respondent (hereafter ‘the aircraft’) under Section 111(o) of the Customs Act with an option to redeem the same by payment of a redemption fine of ₹6,50,00,000/- (Rupees six crores fifty lacs only) under Section 125 of the Customs Act. The allegation against the respondent was that it had not complied with the undertaking furnished in terms of the Condition 104 of the Notification No.21/2002-Cus. dated 01.03.2002 as amended by the Custom Notification No.61/2007-Cus. (CUS dated 03.05.2007). In terms of the Condition No.104, the aircraft is required to be used for providing non-scheduled (passenger) services. According to the Commissioner, the respondent had not complied with the said condition and had used the aircraft for private purposes and not for providing non-scheduled (passenger) services.

3. The Tribunal allowed the respondent’s appeal by the impugned order. The Tribunal found that the aircraft was used in terms of the permit granted by the Director General of Civil Aviation (DGCA) and the aircraft was used for remuneration. The Tribunal decided the appeal in view of the interim order dated 08.08.2022 passed by the Larger Bench of the Tribunal in Customs Appeal No.74/2010 captioned M/s VRL Logistics Ltd. v. Commissioner of Customs, Signature Not Verified Ahmedabad. The operative part of the impugned order reads as under:

“12. The following issues were decided by the Larger Bench of the Tribunal in the order dated 08.08.2022:

(i) In terms of Condition 104 of the exemption notification, 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 NSOP (passenger) services within the meaning of clause (b) of the Explanation to Condition No. 104 of the exemption notification. These two conditions are satisfied by the importers, inasmuch as: -

a. 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;

b. There is no stipulation or restriction or a condition in the 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;

(ii) There is no requirement of having a published tariff and Condition 104 (c) to Signature Not Verified the exemption notification cannot be said to be violated on this ground;

(iii) Aircraft imported for non-scheduled (passenger)