ORDER
K.C. Mamgain, Member (T)
1. These 7 (seven) stay applications are filed by M/s. Indian Airlines Ltd. Since the issue involved in all these applications are common, therefore these are being taken up together for consideration.
2. 7 (seven) appeals were filed by the appellants against Orders-in-Appeal No 17/2002-Cus., dated 23-1-2002 passed by Commissioner of Central Excise & Customs (Appeals), Bangalore; No. 7 to 9/2000-Cus., & 51/2002-Cus., dated 21-3-2002 passed by Commissioner of Customs & Central Excise (Appeals), Cochin; and No. 33/2003-Cus., dated 29-1-2003, passed by Commissioner of Customs (Appeals), Bangalore.
3. Sim A.N. Jayaram, learned Sr. Advocate, Shri Sanjay Gupta and Shri Vidya Prakash, learned Advocates appeared for the appellants and Shri L. Narasimha Murthy, learned SDR appeared for the Revenue.
4. The learned Senior Advocate pleaded that M/s. Indian Airlines are liable to pay total duty amounting to Rs. 36,01,660/- confirmed in these seven appeals. He pleaded that the appellant’s company are operating domestic and international flights. When there is shortage of Aircrafts in International sector, they divert aircrafts from domestic sector for international flight. The aircrafts fly on international flights using the duty paid fuel while going out of the country. When they return to the country, they get refilled at the foreign destination and return back to India where these are again diverted to domestic flights. The issue involved in these appeals is that the Customs authorities have charged Customs Duty on the fuel, which was brought in excess of the quantity of the fuel taken out to foreign country. He pleaded that bringing fuel from foreign destination into the country while flying the aircraft from foreign destination to India does not amount to import. He relied on the following decision of the Supreme Court and that of the Kerala High Court.
(i) Burmah Shell Oil Storage & Distributing Co. of India Ltd. and Standard Vacuum Oil Co. v. The Commercial Tax Officer and Ors. – AIR 1961 Supreme Court 315.
(ii) The Central India Spinning and Weaving and Manufacturing Co. Ltd. and The Empress Mills Nagpur v. The Muncipal Committee, Wardha -AIR 1958 Supreme Court 341
(iii) Shri Ramlinga Mills Pvt. Ltd. and Ors. v. Assistant Collector of Customs and Anr. – 1983 (12) E.L.T. 65 (Ker.)
5. He stated that the gist of these decisions is that the notion of export and import go in pairs. The test of export is that the goods must have a foreign destination where they can be said to be imported. It matters not that there is no valuation consideration from the receiver at the destination end. The crucial fact is the sending of goods to a foreign destination where they would be received as imports. He said that in the present case, the fuel is not exported by any person from the foreign destination. The fuel is sold to Indian Airlines for re-fueling the aircraft and, therefore, there cannot be any export from a foreign destination and thus import into India. He also stated that every sale or purchase preceding the export is not necessarily to be regarded as within the course of export. The import is not merely the ‘bringing into’ but comprises something more i.e. incorporating and mixing up of the goods imported with the mass of the property in the country. Here, in the present case, the fuel remains within the aircraft and is not mixed up with the property in the country. Therefore, it cannot be said that the fuel has been imported. The essential ingredient for import of goods is transaction of sales, consideration and delivery of property. Therefore, the concept of import cannot be dis-associated with person exporting the goods and a person who imports them. He pleaded that in this case, neither a foreign supplier of fuel is exporting the goods as he is selling the fuel to the Indian Airlines for use in the aircraft nor there is any importer of the goods as the goods are being carried in the fuel tank of the aircraft.
6. He also pleaded that Aviation Turbine Fuel (ATF) is classifiable as kerosene and it is entitled for benefit of Exemption Notification No. 19/94-Cus., dated 1-3-1994 as it is hydro-carbon oil having smoke point of 18 mm or more. He, therefore, pleaded that prima facie, the case is in favour of the appellants and an unconditional stay from recovery may be allowed.
7. Shri L. Narasimha Murthy, learned SDR appearing for Revenue, pleaded that the term ‘import’ has been defined in Section 2(23) of the Customs Act which means ‘bringing into India from a place outside India’, and the term ‘imported goods’ is defined in Section 2(25) of the Customs Act which means ‘any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption’. He stated that it is not necessary that for import, there must be a sale for export. A person can bring the goods into India for the purpose of use, enjoyment, consumption, sale or distribution. He said that since the fuel is being brought by the appellants for consumption, therefore, the Customs Duty has been correctly demanded from the appellants after giving set of the quantity of fuel, which was taken out by them from India. He stated that as per Notification No. 151/94 dated 13-7-1994, as amended, fuel in tank of the aircraft of an Indian Airlines or of Indian Air Force is exempt to the extent, the quantity of the said fuel is equal to the quantity of same type of fuel which was taken out of India in the tanks of the aircrafts of the same Indian Airlines or of Indian Air Force as the case may be, and on which duty of Customs or Central Excise has been paid. In this case, the duty has been demanded only on that quantity of the fuel, which was in excess of the fuel, which was taken out of India. He also relied on the Tribunal decision in the case of Indian Airlines Ltd v. CC, Cochin reported in 2002 (150) E.L.T. 496 and stated that Notification. No. 19/94-Cus. exempts only kerosene and not ATF. Therefore, the appellants have no case and they may be put to terms.
8. We have carefully considered the submissions made by both the sides. We find that the duty has been demanded on the fuel, which was in excess of the fuel, which was taken out of India. The fuel is being brought into the country for consumption by Indian Airlines in their aircraft. Once the fuel is cleared by the Customs, then it looses its identity whether it is imported fuel or indigenous fuel as it gets mixed up with the property of the country. We also find that it well settled that exemption granted to kerosene is not applicable to ATF. This issue has been decided in their own case as reported in 2002 (150) E.L.T. 496. Therefore, prima facie, we are not convinced that the Indian Airlines has any strong case in their favour. We, therefore, direct them to pre-deposit an amount of Rs. 20,00,000/- (Rupees twenty lakhs only) within a period of two months from the date of receipt of this order. The case is posted for reporting compliance on 6th August, 2004.