TMI Blog2011 (10) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation and shall not re-export the vessel, except with the permission of the Customs authority. - C/705/11-Mum - M/426-427/11/CSTB/C-I - Dated:- 11-8-2011 - Shri Ashok Jindal, Shri P R Chandrasekharan, JJ. Represented by: Shri Prakash Shah, Advocates for Appellant Shri S R Bhatti, Deputy Commissioner (AR) for Respondent Per: Ashok Jindal: The appellant filed an appeal against the impugned order for provisional release of seized vessel old and used Swiber Victorious along with the applications for early hearing of the appeal. 2. Shri Prakash Shah, learned Advocate for the appellant appeared and submitted that the vessel have been seized by the customs authority and allowed to be released provisionally on a) execution of Bond of ₹ 237,08,76,525/- b) payment of duty ₹ 22,18,19,288/- and, c) execution of bank guarantee of 25% of above said duty amount. This conditions (b) and (c) onerous and appellant are incurring heavy loss almost ₹ 23 lakhs per day therefore, the appeal be heard on priority basis. Considering the submission of the learned advocate that the appellant is incurring heavy losses on account of Hire charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted under notification no.21/02. As no duty is payable, therefore valuation cannot be disputed. To support this contention, he relied on the case of Collector of Central Excise, Pune vs. Wander Ltd. 2003(157) ELT 3 (SC) lying down a ratio that as long as goods are exempted is from duty, question of valuation would not arise. He also relied on Orient Enterprises, New Delhi vs. Collector of Customs, Cochin 1986 (23) ELT 507 (Tribunal) which was confirmed by the Apex Court reported as Collector vs. Orient Enterprises reported in 1997 (92) ELT A 69 (SC) wherein it was held that what value the goods shall be insured is purely a matter of contract and therefore not helpful in arriving at assessable value. 8. The learned Advocate further submitted apart from the execution of the bond, the appellant are ready to undertake that the vessel shall not be re-exported without permission of Customs Authority and shall be used only for ONGC operation, subject to which exemption is granted till conclusion of the adjudication proceedings. He also relied on the decision of Honourable high Court of Bombay in Writ Petition no. 2959 of 2011 decided on 21.04.2011 in the case of Larsen Toub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antee for provisional release in respect of such exempted goods. In the case of Govind Steel Co. Ltd. vs. Union of India 2010 (256)ELT 234 (Cal.) in the Hon ble Calcutta high court also held that payment of differential duty is not a condition for the provisional release under section 110A. The security by way of bank was asked in that case as neither the goods were exempted nor were required for such end use. As in the instant case prima facie, the exemption under Notification no. 21/2002 is available to the appellant. Therefore, in the interest of justice, revenue will be fully protected, if the bond as required by the learned Commissioner is executed and the appellant is put to the conditions such as not to use the vessel except to intended use for executing the contractual work of petroleum operations for ONGC till final adjudication on completion of investigation and shall not re-export the vessel, except with the permission of the Customs authority. We find that the learned Commissioner has not put the condition not to re-export for provisional release of the vessel. Therefore, to meet the end of justice, if vessel remains in constructive custody of the department by restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1962. While section 111(m) deals with mis-declaration of value or any other material particular relating to the goods under importation, section 111(o) deals with violation of end-use conditions under which the goods are exempted on importation. A perusal of the mahassar indicates that the goods have been seized on the reasonable belief that there is a misdeclaration of value. Whereas the insurance documents relating to the value of the vessel at USD 42.2 million, the value declared in the Bill of Entry is only USD 23.5 million. Therefore, the department's case is that there seems to be a mis-declaration of value. As regards section 111(o), there is nothing forthcoming in the seizure mahassar as to how the appellants have violated the end-use conditions of Notification no. 21/2002 dated 01.03.2002 under which the goods have been permitted to be imported duty-free. Inasmuch as there is no prima facie evidence available on record to support the case under section 111(o), the direction in the provisional release order to pay duty of ₹ 22,18,19,288/- is prima facie, incorrect and unsustainable in law and to this extent, the terms and conditions of the provisional release or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 110, pending order of the adjudicating officer. The question is whether the appeal against such order is maintainable under Section 129-A before this Tribunal under the Customs Act. Section 129-A provides for appeal inter alia against a decision or order passed by the Commissioner of Customs as an adjudicating authority . The order envisaged in Section 110-A cannot be treated to be an order in the nature of adjudication. As a matter of fact, as mentioned above, order in regard to the provisional release of goods etc. is to be passed pending the order of the adjudicating officer which clearly shows that the order of release or non-release cannot be deemed to be an order in the nature of adjudication. 3. As a matter of fact, we are not sure whether in the instant case the adjudication is to be made by Commissioner himself or by any subordinate officer. It may also be relevant to mention here that the said application before the Commissioner for release of the goods was filed in the light of the order of the Delhi High Court dated 29-11-2007 in Writ Petition (C) No. 3813/2007. The appellant contends that the direction of the High Court was not carried out by the Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he differential duty to the satisfaction of the concerned Commissioner of Customs. The appellants have filed the present appeal being aggrieved by the aforesaid order in respect of which it is being contended that the aforesaid order passed by the High Court is erroneous as the amount for which the bond is to be furnished by the respondents is on the lower side. Having considered the facts and circumstances of the case and also taking notice of the fact that the goods in question are newsprint which is perishable in nature, we issue a direction that the goods of the respondents shall be cleared by the appellants herein on the respondents' furnishing a bank guarantee of 30% of the differential duty to the satisfaction of the Commissioner of Customs. The goods shall be released in terms of this order immediately on furnishing of the aforesaid bank guarantee and satisfaction of the concerned Commissioner of Customs. We also direct the Commissioner of Customs to hear the adjudication proceeding pending before him as early as possible, preferably within a period of three months, from the date of receipt of a copy of this order. In terms of the aforesaid order, the appeal st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/11/CSTB/C-I Per: S S Kang, Vice President (as Third Member): 20. Heard both sides. The following difference of opinion is referred. 1) Whether the impugned goods can be released by putting the conditions imposed in para 14, 15 and 16 of the order as held by the Member (Judicial) OR 2) The matter needs to be remanded for fresh consideration by the Commissioner of Customs taking into account the submissions made by the appellant in the application for provisional release of the goods as held by the Member (Technical). 21. The brief facts of the case are that the appellant made import of a vessel a filed a bill of entry dated 18.1.2011 declaring the assessable value of USD 23.537 million). The appellant also produced necessary certificate for execution of contractual work of petroleum operations for Oil Natural Gas Commission and claimed the benefit of Notification no. 21/2002 dated 1.3.2002 at serial no. 214 of the table and list of the Notification. The vessel was cleared by allowing the benefit of the Notification as claimed. Subsequently on 1.9.2011 the vessel was seized by the Customs authorities on the ground of misdeclaration of value. AS per the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prima facie the appellant is entitled for the benefit of Notification 21/2002 dated 1.3.2002 and the Hon'ble Member (Technical) also held that the direction in the provisional release order to pay the differential duty is prima facie incorrect and unsustainable in law and to this extent the terms and conditions of the provisional release order are unwarranted. 29. In these circumstances, as both Members are agreed that the demand of differential duty for provisional release is not sustainable and taking into account the facts and circumstances of the case as the vessel is required for execution of contractual work of petroleum operations for ONGC and to expedite the proceedings, I find that the conditions imposed in the order passed by the Hon'ble Member (Judicial) are sufficient to safeguard the interest of Revenue hence I agree with the view taken by the Hon'ble Member (Judicial). 30. The matter may be placed before the regular Bench for further necessary action. (Dictated in Court) Sd/- (S.S.Kang) Vice President FINAL ORDER In view of the majority order, the impugned order is modified by waiving the condition of payment of duty an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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