CUS CIR NO. 47/2003 DATE 06/06/2003

Section 166 of the Finance Act, 2003- Incorporation of provisions relating to Prosecution in the Finance Act, 1989 in respect of Inland Air Travel Tax-Reg.
I am directed to invite your attention to section 166 of the Finance Act, 2003, wherein sections 46 B and 46 C have been inserted in the Finance Act, 1989 relating to Inland Air Travel Tax. The sections inserted are as under :-

“ 46B. If any carrier fails to pay to the credit of the Central Government, the inland air travel tax collected by him as required under the provisions of section 42, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.

46C. (1) Where any offence under section 46B has been committed by a company, every person who, at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in the said section, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under section 46B has been committed by a company and it is proved that the offence has been committed with the consent and connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.-For the purposes of this section,-

(a) ‘company’ means any body corporate and includes a firm or other association of individuals; and

(b) ‘director’, in relation to a firm, means a partner in the firm.”

2. It may be noted that the new sections incorporated in the Finance Act, 1989 contain provisions relating to imprisonment and fine for failure to pay inland air travel tax to credit of the Central Government. The new provisions enable the Central Government to take action against the defaulting airlines, which fail to deposit the Inland Air Travel Tax to the account of Central Government in spite of having collected the same from the passengers.

3. It may be noted that these provisions can be invoked only for offences committed after 14-5-2003.

4. Wide publicity may be given by issue of a Public Notice in this regard.

5. Kindly acknowledge receipt of this Circular.

6. Hindi version of the Circular will follow.

C.P.Goyal
STO (FTT)
Telephone No. 23093859

F. No. 307/8/1997-FTT

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