SPICEJET LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition impugns the order of the Government of India dated 30-4-2001 which upheld the Order-in-Appeal dated 25-8-2000 passed by the Commissioner of Customs (Appeals), New Delhi. The Order-in-Original dated 30-4-2001 passed by the Commissioner of Customs, New Delhi had imposed a demand of Rs. 8,65,06,850/- being Inland Air Travel Tax (IATT) for the period from March, 1996 to August, 1996 along with interest @ 20% in terms of Section 43A(1) of the Finance Act, 1989 ('the Act') read with Notification No. 4/94-IATT, dated 12-8-1994. A penalty amount of Rs. 25 crores too was imposed on the petitioner under Section 46(3) of the Act. However, this was reduced to Rs. 10 crores by the Order-in-Appeal.

(2.) Section 42 of the Act imposed a compulsory 'Inland Air Travel Tax' upon every carrier obliging it to collect tax on every inland journey from the passenger @ 10% of the fare. The carrier has to credit the amount to the Central Government failing which an interest on the amount of tax not paid for the delayed period is payable at the rate not below 20% and not exceeding 30%. Admittedly, the petitioner/carrier under the Act, did not pay the amount although it had collected it from its passengers. Therefore, the minimum rate of 20% was imposed on the unpaid amount. In default of payment of the demanded amount the aircraft which was then leased to the petitioner from M/s. Air U.K. Leasing Limited (Lessor) had been distrained. It was later released and de-registered upon the lessor depositing a sum of Rs. 15 crores under the order of this Court in WP (C) 110/1997 which had been filed by the Lessor. Subsequently, by Writ Petition (C) No. 1908/1997, the Lessor sought refund of the said amounts of Rs. 15 crores contending that it was not liable to pay the said amount towards the IATT dues. That writ petition was disposed of on 18-1-1999 in view of the order passed by the Assistant Commissioner of Customs on 13-1-1999 holding that the aforesaid amount of Rs. 8,65,06,850/- along with interest @ 20% and penalty amount of Rs. 25 crores was payable.

(3.) Aggrieved by the aforesaid Order-in-Original dated 13-1-1999, the petitioner preferred an appeal wherein the Commissioner of Customs (Appeals) confirmed the aforesaid demand. However, the penalty amount was reduced to Rs. 10 crores. It reasoned as under :