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Notice issued to Naveen Jindal`s JSPL by DRI for duty evasion

The DRI has sent a notice to Congress MP, Naveen Jindal`s company JSPL.

Zee Media Bureau
Mumbai: The DRI has sent a notice to Congress MP, Naveen Jindal`s company JSPL. DRI Mumbai in its initial investigation has found that JSPL has indulged in duty evasion of Rs 55 crore regarding the aircraft that it bought in November 2008 from California`s J Aviation for Rs 244 crore. It is said that to get licence in India, it was told that the aeroplane was being taken to be used under non-schedule (passenger) service. Huge rebate is given in custom`s duty in this category. It has been alleged that JSPL availed of the rebate by taking licence under this rule. The notice says. “ Intelligence was gathered by the Mumbai Zonal Unit of the Directorate of Revenue Intelligence that the said aircraft was not being used for the declared purpose, and consequently, they have violated the conditions of the said exemption notifications, leading to evasion of duty.” It also says, “It is seen that the aircraft has been mostly used, i.e., for 89 % of the flying time, for self use (own group companies) and by BAL (who contributed towards the cost of the aircraft and used the aircraft for 50% of the time under ‘Priority Charter Agreement’). Only sometimes (11 % of the flying time), the aircraft has been used by others.” It is further outlined in the notice, “It appears that while the aircraft was used mostly by common set of persons belonging to JSPL, on paper it was shown as charter to different companies within their own group to share both the variable and fixed cost of the aircraft... JSPL required one ‘Bombardier Global Express’ aircraft mainly to meet the needs of promoters and senior management officials of its own group companies and that of BAL. However, on paper they have resorted to NSOP route, apparently to avoid payment of customs duty on the imported aircraft.” Further details as revealed in the notice is as follows, “Accordingly, they approached Ministry of Civil Aviation to obtain permission to operate Non-Scheduled Air Transport (Passenger) Services and for import of the said aircraft. They obtained permit no. 35/2008 dated 23.12.2008 for Non-Scheduled Air Transport Service (Passenger) issued by the DGCA, apparently misrepresenting facts and purpose.” The DRI adds, “JSPL is neither in the business of “Air Transport Service” nor is an “Air Transport Undertaking” as defined under Rule 3 of the Aircraft Rules, 1937. They are engaged in the business of manufacturing steel & power... From the scrutiny of documents and analysis of statements of persons recorded, it appears that the impugned aircraft was not effecting public transport of passengers. This is further corroborated by the fact that JSPL does not have a published tariff, nor it is their authorized business activity... From the scrutiny of the documents, it appears that JSPL has not provided even a single public transport of passengers. In fact, the aircraft was mostly used by their own group companies. In 11 % of cases, it has been given on charter, which is different from Non-Scheduled Passenger Service.” “JSPL had applied for and obtained DGCA approval and permit for providing Non-Scheduled Passenger Service, which they have not provided. They had also availed customs duty exemption by giving specific undertaking to provide Non-Scheduled Passenger Service, which they have not provided. Hence they appear to have violated the terms of exemption condition and are thus liable to pay duty due but for the said exemption,” the DRI notice said. It also says, “JSPL do not fulfill any of the conditions of Non-Scheduled (Charter) Service, as enumerated above, because JSPL did not have the necessary Non-Scheduled (Charter) Operator Permit. What they had was Non-Scheduled (Passenger) Permit, under which the aircraft was imported.”