TMI Blog2011 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... the ship was manufactured in a warehouse located in India and therefore, it attracted excise duty alone need not be considered at all. In our opinion, in light of the decision and directions of this Court in C.A. 1998 of 2000, judicial discipline obliged the Tribunal to examine the entire legal issue after ascertaining the foundational facts, regardless of its earlier view in the matter. Therefore, the decision of the Tribunal cannot be sustained. Matter remanded back to tribunal for fresh adjudication and determination of the question of leviability of import duty on an Indian-built ship brought into India for breaking purpose - 3788 OF 2003 - - - Dated:- 28-2-2011 - D.K. JAIN, ASOK KUMAR GANGULY, H.L. DATTU , JJ. D.K. JAIN, J.: J U D G M E N T 1. This appeal, under Section 130E of the Customs Act, 1962 (for short "the Act"), is directed against order dated 18th February, 2003, passed by the Customs, Excise Gold (Control) Appellate Tribunal, as it existed at the relevant time, (for short "the Tribunal"). By the impugned order the Tribunal has dismissed the appeal filed by the appellant herein and confirmed the levy of customs duty on the ocean going vesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal and confirmed the order of provisional assessment dated 12th May, 1993. 6. Being aggrieved, the appellant preferred an appeal before the Tribunal. Vide order dated 10th July, 1998 the Tribunal dismissed the appeal. Relying on the decision of this Court in Union of India Ors. Vs. M/s. Jalyan Udyog Anr. (1994) 1 SCC 318 , the Tribunal observed that Notification No. 133/87-Cus was applicable in the instant case, and therefore, the appellant was liable to pay customs duty on the vessel at the rate prevalent at the time of breaking of ship. 7. Being dissatisfied, the appellant preferred an application under Section 129(B)(2) of the Act praying for rectification of mistakes in the order, dated 10th July, 1998, on the ground that the Tribunal had erroneously concluded that: (i) the goods manufactured in a customs bonded warehouse were similar to goods imported under the Act; (ii) the issue for determination before it was whether Notification No. 133/87-Cus was applicable or not, whereas the real issue for determination was whether the vessel was imported or indigenously manufactured; (iii) the customs duty under Notification No. 133/87-Cus was payable when Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e remanded to the Tribunal to be considered afresh. In so doing, the Tribunal shall determine, first, the facts and then the law. The Tribunal may take note of the judgment of the Bombay High Court delivered on 5th February, 1992 in the case of M/s. Baijnath Melaram vs. Union of India Ors. (Writ Petition No.1478 of 1983), special leave petitions whereagainst were summarily dismissed. It may be noted that we express no opinion on the merits of the case on either side." It is plain from a bare reading of the said order that this Court had directed the Tribunal to first appreciate the facts of the case and then determine the question of leviability of import duty on an Indian built ship which was sold for breaking. It is evident from the afore-extracted paragraph that the Court had observed that reliance by the Tribunal on the decision of this Court in Jalyan Udyog (supra) would be misplaced. 11.Accordingly, the Tribunal re-considered the matter. As stated above, vide the impugned order, the Tribunal has dismissed the appeal, observing thus: "The fact that Notification No. 118/59-Cus. was not in existence at the date on which the vessel was cleared by HSL having been sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Section 21 of the erstwhile Sea Customs Act, 1878 provided that when any article liable to duty forms part or ingredient of a good, then such good would be liable to full duty as if it was entirely composed of such article. In the absence of such a charging provision in the Act, ships manufactured by Hindustan Shipyard in India cannot be subjected to customs duty at the time of clearance for home consumption. Relying on the decisions of this Court in The State of Tamil Nadu Vs. M.K. Kandaswami Ors. (1975) 4 SCC 745 and In Re. Sea Customs Act, 1878 S. 20. (1964) 3 SCR 787 , learned counsel submitted that no customs duty was chargeable in the instant case, in as much as the ship was not a "taxable good" as it was not imported as defined under Section 2(25) of the Act. Moreover, there was no "taxable event" as there was no import in the instant case, and the appellant being an auction-purchaser cannot be likened to an importer under the Act. Relying on the decision of this Court in Baijnath Melaram (supra), learned counsel urged that no customs duty can be levied on Indian built ships. Learned counsel asserted that the Tribunal had not complied with the order of this Court dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to be paid in terms of Sections 12 and 15 read with Section 68 of the Act. Learned counsel also argued that Section 68 of the Act makes it clear that when the importer of any warehoused goods intends to clear them for home consumption, then a bill of entry for home consumption has be to be filed, and the import duty leviable on such goods has to be paid by the importer, as was held in D.C.M. Anr. Vs. Union of India Anr. 1995 Supp (3) SCC 223 . Learned counsel submitted that Section 9 of the Act makes it clear that clearance from a Bonded warehouse is to be treated as an import into India. It was also stressed that clearance of vessel was in terms of the exemption notification, which stipulated payment of appropriate customs duty prevalent at the time of its breaking. Reliance was placed on the decisions of this Court in Hansraj Gordhandas Vs. H.H. Dave, Assistant Collector of Central Excise Customs, Surat Ors. (1969) 2 SCR 253; Novopan India Ltd., Hyderabad Vs. Collector of Central Excise And Customs, Hyderabad1994 Supp (3) SCC 606 and Commissioner of Central Excise and Customs, Indore Vs. Parenteral Drugs India Ltd. (2009) 14 SCC 342 to contend that the terms of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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