The customs case against the illegal use of Non Scheduled Operators Permits (NSOPs) by corporates gained momentum on Friday as customs officials shot off letters to the director general of civil aviation and the civil aviation ministry to cancel NSOP licenses of aircraft seized so far in the scam (15 at last count). The two departments have also been advised to take “suitable action” against the errant operators for the private use of the aircraft.

Significantly, the customs department, in one of the missives issued today has instructed the DGCA to refrain from sending letters of “clarification” to operators whose aircraft have been seized suggesting that NSOPs — which are basically for either charter or passenger use — can also be interchanged with leasing.

Currently, NSOPs have been issued to 89 firms which own more than 200 aircraft. The customs department had seized 13 aircraft and is presently investigating duty evasion by other operators including Vijay Mallya and Gautam Adani.

The DGCA’s clarification letters to the operators is contrary to customs regulation. According to notification No.61/2007-Cus dated May 3, 2007, exemption from custom duty on aircraft is exempted when they are imported by an operator who is granted approval by DGCA to import aircraft for providing non-scheduled (passenger) service or non-scheduled (charter) service.

However, duty is leviable on the import of private aircraft. This exemption is subject to a condition that the importer furnishes an undertaking to customs officials at the time of importation promising two things — that the aircraft shall be used only for providing non-scheduled (passenger) services or non-scheduled (charter) services, as the case may be, and that the operator shall pay on demand, in the event of his failure to use the imported aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under this notification.

... contd.