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2024 (4) TMI 384 - AT - CustomsLevy of Customs Duty - bunkers lying inside the tanks of the vessel including the consumption between Bedi Port to Alang or not - transshipment of cargo - foreign –going vessel - Scope of SCN - HELD THAT:- Section 86(2) inter alia provides that any stores imported in a vessel or aircraft may with proper permission of the proper officer be transferred to any vessel as stores for consumption therein as provided in Section 87, which inter alia provides that imported stores may, without payment of duty be consumed on the vessel as stores during the period such vessel is a foreign going vessel. In order to appreciate the contention raised in the disputed matter, it is necessary to notice a basic premise that under Customs Act goods entering into India becomes imported goods and chargeable to duty under Section 12, unless they are exempt from payment of duty by virtue of specific provisions. It is significant to note that ship stores or spares thereof are not exempted from the operation of Section 12, but by virtue of Section 53 of the Act are allowed to be transited without payment of duty - Similar provision is found in Section 54 in respect of the goods imported into a customs port or customs airport but is intended for transhipment of goods. In the present matter, it is found that the tug had originally arrived at Bedi ports from overseas port laden on mother vessel. Mother vessel was unable to complete the delivery of the said tug at Alang owing to requirement of deeper draught which was not available at the ship breaking yard at Alang. The said tug had arrived from foreign port, it was treated as a foreign –going vessel. There is no dispute over the fact that the said tug had not performed any costal voyage or undertaken any coastal operation. Therefore the fuel consumed during their transshipment from Bedi port to Alang cannot be considered as dutiable. The impugned orders are not sustainable, hence the same are set aside - Appeal allowed.
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