JAGSON INTERNATIONAL Vs. COMMISSIONER OF CUSOTMS, NEW

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s. Jagson International Ltd. is at what rate duty of Customs is chargeable on, and whether benefit of Notification No. 42/92 dated 1.3.92 is available to, Dornier 228 Aircraft imported by them.

(2.) BRIEFLY stated the facts are that the Appellants brought an used Dornier 228 Aircraft with accessories ad spares ad a self flown flight on 15.10.1991. The Aircraft was got cleared under Rule 58(6) of the Aircraft Rules, 1920. The Aircraft was cleared on 28.10.91 provisionally on a bond of Rs.4.78 crores alongwith a bank guarantee. As the Aircraft was used by the Appellants for Air Taxi Operations, a case of misdeclaration was initiated against them and the Appellants paid part duty on 11.2.92 and part duty on 10.3.92. Subsequently they filed a Bill of Entry for home consumption on 25.3.92 which was assessed to duty amounting to Rs.80,94,219/ -. They filed a refund claim on 22.1.93 on the ground that the counter -vailing duty was not leviable on the Aircraft in terms of Notification No. 42/92 dated 1.3.92. The Assistant Commissioner, under Adjudication Order No. 19/96 dated 2.7.96, rejected the refund claim on the ground that the rate of duty applicable is the rate of duty in force on the date of payment of duty under Section 15(1)(c) of the Customs Act and that refund claim is also time barred as it was filed after expiry of 6 months from the date of payment of duty. On appeal, the Commissioner (Appeals), under the impugned Order, rejected their appeal, holding that the Appellants paid part of duty on 11.2.92 after they had been issued with Customs Clearance Permit dated 3.12.1991 and Customs Department initiated a case of misdeclaration against them; that the date of payment of first instalment would be the date of payment of duty on imported goods as envisaged under Section 15(1)(c) of the Act; that the expression "other goods" in Section 15(1)(c) was obviously meant to cover 'other imported goods' which had either been imported clandestinely or those goods which had otherwise escaped duty; that the impugned aircraft was covered under 'other goods which had escaped duty'; that this was evident from two letters dated 3.2.92 and 20.3.92 of the Assistant Commissioner, Customs informing D.G.C.A. that the Appellants had got the aircraft cleared on 28.10.91 by availing exemption by misrepresentation that the aircraft was not to be registered in India whereas the same had been purchased from Royal Government of Bhutan for Air -taxi operation. The Commissioner of Customs also gave his findings that there was no sign of protest from the challan of payment of Customs duty dated 11.2.92; that filing of Bill of Entry was just a formality to avail the benefit of Notification. He relied upon the decision in the case of Collector of Customs vs. Ajanta Offset Packaging Ltd., 1991 (56) ELT 771 (T) which has been upheld by the Supreme Court as reported in 1997 (94) ELT 443 (SC).

(3.) SHRI L.P. Asthana, learned Advocate, submitted that since at the stage of importation, the Appellants were not in a position to decide or categorically state whether the aircraft could be retained in India beyond a period of six months, they cleared the aircraft duty free on the basis of the bond and bank guarantee; that although correspondence had been going on with the D.G.C.A. for permission to fly the aircraft in India and permission had been accorded in principle, a number of other requirements, such as obtaining a Customs Clearance Permit (CCP) and Air taxi permit, had to be met before the aircraft could be retained in India; that before the position could crystalise and before the expiry of stipulated six months, the Customs Authorities demanded the customs duty which had to be paid by them under coercion as the Department had written to the D.G.C.A. to ground the aircraft for non -payment of the Customs duty and consequently the D.G.C.A. had actually grounded the aircraft; that after they had paid duty under coercion and under protest, the orderr grounding the aircraft was revoked; that after obtaining CCP and Air taxi permit, they filed relevant Bill or Entry for home consumption on 25.3.92. The learned Counsel, further, submitted that as in the present case, a bill of entry had been presented, the rate of duty would be the rate applicable on the presentation of the Bill of Entry; that Bill of Entry was filed as per Order; that it is not on record that there was a request for permission to file Bill of Entry; that no procedure had been prescribed under the Customs Act for making payment under protest and as such no letter of protest was necessary; that challan dated 10.3.92 clearly showed that the payment was made under protest; that although this endorsement was not made on first challan, the fact remains that duty was paid because the Aircraft had been grounded; that in any case the Commissioner (Appeals) had not upheld the Order of the Assistant Commissioner on the ground of time bar and the Department had not come in appeal; that the Revenue now cannot argue that the Commissioner (Appeals) should have rejected their refund claim on time limit. He relied on the decision in the case of India Cements Ltd. vs. CCE, 1989 (41) ELT 358 (T) wherein it was held that no form has been prescribed for payment of duty under protest. In this case a letter raising contentions against the levy of duty on the value of packing material was accepted by the Supreme Court as a letter of Protest. Reliance was also placed on the decision in Mafatlal Industries vs. U.O.I., 1997 (89) ELT 247 (SC) wherein the Apex Court held, while interpreting Rule 233B of the Central Excise Rules, that "The Assessee need not particularise the grounds of protest. It is open to him to say that according to him, the duty is not exigible according to law."