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2017 (12) TMI 1162 - AT - CustomsDemand the duty that had not been paid at the time of import - Non-compliance with import procedure - case of Revenue is that the goods were not ship stores and, covered by transhipment provisions in the Customs Act, 1962, are liable to the customs duties that had not been discharged at the time of clearance - the case of the appellants is that the goods, having been placed on board a vessel and not intended for home consumption, was not required to follow any procedure other than that of transhipment and was not liable to duties of customs. Held that: - Description in the airway bill is of no statutory relevance under the Customs Act, 1962 which bases liability to import duty on the entry made under section 46 of Customs Act, 1962. The airway bill is of relevance in the filing of the import general manifest under section 30 which enables shifting of the responsibility for due discharge of duty liability from the person-in-charge of conveyance to the importer acknowledging the latter as possessor of right to clear the goods. The manifest will clearly indicate the destination of the goods for home consumption at port of discharge or for transhipment to another customs station or on transit to another customs station or place outside India. Needless to say, goods that are described as spares/stores in the airway bill may well be destined to other customs stations or locations outside India with the liability to duty also deferred accordingly till due arrival at such destination. In the absence of such details, goods that have been found to be excluded from stores cannot be subject to duty liability unless it has been destined for home consumption in India. The impugned order has proceeded to recover duty and visit the appellants with detrimental consequences after considering the nature of the goods and holding that these are not ship spares ; however, there is a marked lack of material pertaining to the goods or any finding on the ultimate disposal of the goods. Taking note of the submission of the appellants that the vessel is a research vessel for which research equipment are 'ship stores', the adjudicating authority finds that the vessel, even if under a foreign flag, does not become a foreign going vessel merely for that reason and, more so, as research vessels are excluded from scope of engagement in foreign trade. Rejecting the claim of the appellants that these are ship stores covered by the inclusive portion - other articles of equipment. With the contractor having absented itself from proceedings, the adjudicating authority, placing reliance on section 147 of Customs Act, 1962, transferred the duty liability to M/s JM Baxi & Co as deemed agent of the contractor inferred from the inclusion of their name in the commercial invoice and in the airway bill, the filing of application for transhipment permit and the execution of transhipment bond on behalf of the Master of MV Mezen - all of which, according to her, would bring them under the ambit of agent. The correspondence and electronic mail are cited by the adjudicating authority to conclude that the appellants were all aware that they were circumventing the provisions of Customs Act, 1962 and, hence, by acts that rendered the goods liable to confiscation, they were subject to the penalties under section 112 of Customs Act, 1962. Matter remitted back for fresh determination.
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