Law:

Section:

THIS ORDER PASSED BY: JAWAID MASOOD TAHIR BHATTI, CHAIRPERSON:---.--- Through this Miscellaneous Application, the applicant company has sought clarification regarding the following points which are claimed to arise out of the order passed by the Headquarters Bench of this Tribunal in CEA&FEA No. 05 to 07/IB/2010 dated 27-12-2010. (1) Whether FED is chargeable on the foreign travel of the employees of the airline, who are allowed to undertake these journeys in accordance with the terms and conditions of their employment; (7 what staff is included within the definition and scope of 'supernumerary crew'? (3) will the 'frequent flyers' be liable to levy of FED in respect of the free ticket to which they are entitled under the sales promotion scheme of airline? We have heard the representatives of both the parties at length and have also gone through the earlier order passed in CEA&FEA No. 05 to 07/IB/2010 dated 27-12-2010 carefully. We are of the considered opinion that the earlier bench made extensive discussion on the rationale of exemption available to the 'supernumerary crew' being the staff responsible for the operation of the flight. Whether or not other employees of the company can be treated at par 'supernumerary staff for the purpose of award of incentives and benefits and whether they are entitled to exemption from the levy of FED is a mixed question of law and fact which needs a little bit discussion and elaboration. We are conscious of the fact that the practice of extending incentives and benefits to the employees which are peculiar to the business of a company is not alien to the known business concerns all over the world. In our context, instances of supply of free electricity to the employees by electric distribution companies and free telephone facility to the employees of PTCL and cellular companies are quite well known. These benefits are not meant exclusively for the line employees but are also admissible to the support (staff) employees. The logic behind the extension of the facilities across the board is that although the support staff may not be directly involved in the business operations of the relevant companies, the company cannot…

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