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Aidek Tourism Services Pvt. Ltd. v. Commnr. of Customs, New Delhi

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 2616 of 2001)Decided 19 Mar 2015
Civil Appeal No. 2616 of 2001
Justice A.K. Sikri · Justice Rohinton Fali Nariman

Background

Aidek Tourism, a tourist-taxi operator, imported Honda Accord cars in 1995 and claimed a concessional rate of Countervailing Duty (CVD) under a customs exemption notification meant to benefit importers of vehicles used as tourist taxis. Identical claims by the same company were decided differently by two benches of the Customs, Excise and Gold (Control) Appellate Tribunal, the Mumbai bench ruled in the company's favour, while the Delhi bench ruled against it, leading to cross-appeals by the assessee and the Revenue that were all taken up together by the Supreme Court to resolve the conflict.

Decision Breakdown

The Supreme Court held that the purpose of the exemption notification was specifically to benefit importers who use such vehicles as tourist taxis, and that a foreign manufacturer itself could never realistically claim this benefit, meaning the notification was effectively written for importer-operators like Aidek. Applying the principle from its earlier decision in Thermax Private Limited, which dealt with a similarly structured exemption, the Court held that an importer need not be treated as a "manufacturer" to claim this concessional CVD. It therefore allowed Aidek's appeal, reversed the Delhi Tribunal bench's unfavourable ruling, upheld the Mumbai bench's favourable view, and dismissed the Revenue's appeals, meaning Aidek was entitled to its claimed 10% CVD refund.

Lesson Learnt

When a tax exemption notification is designed with a particular category of beneficiary in mind, courts will interpret it in line with that practical purpose rather than a literal reading that would make the benefit impossible for anyone to actually claim.

Official source (sci.gov.in)View Judgment (PDF)

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