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2020 (3) TMI 271 - AT - CustomsForeign Going vessel or not - benefit of duty free supply - time limitation - whether the vessel in question can be considered as a Foreign Going Vessel in terms of the Customs Act, 1962? - HELD THAT:- The impugned vessel is engaged for cable repair and cable-laying work in the areas specified therein; the ship requires to be in readiness to leave for repairs should an exigency arise and the vessel is paid both fixed charges as well as operational charges. Therefore, we find that the appellants have a strong case in their favour inasmuch as the (ii) inclusive definition is concerned. It is squarely covered by the terms “any vessel engaged in fishing or any other operations outside the territorial waters of India”. We find that the term “engaged in” has not been defined in the Customs Act - The vessel ASEAN Explorer was a foreign going vessel in terms of inclusive definition contained in Section 2(21)(ii) of the Customs Act, 1962. The crux of the argument of the department was that the Vessel was berthed in Cochin for most of the time during the disputed period and thus it ceases to be foreign going vessel. Moreover, we find that the vessel was anchored in Cochin Port and was under the watchful eyes of Customs and Port authorities. Many times, Customs authorities have boarded the Vessel as demonstrated by the counsel for the appellants. Customs officers were supervising the bonded stores of the vessel. It was well within the right and mandate of Customs authorities to advise the appellants to ensure that there were no procedural and other infractions. No proof of such efforts and correspondence, if any, has been placed on record before us. It can be seen that the arguments of adjudicating authority were controverted and we are inclined to hold that the impugned vessel is foreign going vessel and as such the exemption in terms of Section 87 of the Customs Act, 1962 is available to the appellants, despite the fact that it was lying berthed at Cochin for most part of the time. The impugned vessel ASEAN Explorer is a foreign-going vessel, within the ambit of (ii) of Section 2(21) of the Customs Act, 1962, being engaged for performing repair/cable laying activities in the designated areas in terms of the Agreement with SEAIOCMA. The berthing of the vessel for long periods at Cochin Port does not alter this position and accordingly, the appellants are eligible to avail the exemption contained under Section 87 of the Customs Act, 1962 on the ship stores. However, they are required to pay duty on the ship stores consumed only during the period the said vessel was performing its designated work in Indian territorial waters, for the normal period. As the vessel is held to be a foreign-going vessel and that the exemption under Section 87 of the Customs Act, 1962 is available, the seizure of the vessel and consequent imposition of redemption fine in lieu of confiscation need to be set aside along with penalties imposed on both the appellants. Appeal allowed by way of remand.
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