TMI Blog2012 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... h Mr Bomi Patel and Ms Sophia Mhasvadkar For Respondents: Mr Pradeep S Jetly with Mr Jitender B Mishra JUDGEMENT The Petitioners claim to be owners of an ocean going vessel, Seamec II. Seamec II is stated to have been originally imported by Essar Shipping in 1988. The vessel is stated to have been purchased by the Petitioners from Essar Shipping in November 1993 as an Indian Flag Vessel. The vessel was sent out of the territorial waters for the purpose of repairs. The vessel returned on or about 1 December 2011. The vessel was seized on 1 December 2011. On 14 December 2011, the Petitioners were informed that the investigation has been taken over by the Directorate of Revenue Intelligence and it was that authority which could be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, Upgradation, Repair, Dry docking Equipments added and payment of applicable rate of duty (to be finalized by the Group VB), which amounts to Rs.20,54,88,664/- (approximately). 2. Submission of Bank Guarantee of 20% of the Assessable value of the goods i.e. amount rounded of to Rs.27.13 crores. 3. Bond for 100% of the Assessable value of the good as arrived to Rs. 135,64,86,172/-. 4. Unconditional undertaking not to dispute the identity of the goods seized in the proceedings or any other proceedings that may be initiated by the department." As regards Seamec-III, the Petitioners have been informed that no action in relation to the vessel is pending at the level of the Commissionerate and the Petitioners have been direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifications made on the vessel after 6 July 2011 provisionally estimated to be in the amount of Rs.82.09 crores. According to the Petitioners, the duty liability in respect of the modifications would amount to Rs.12.77 crores. The Petitioners are ready and willing to pay the duty of Rs.12.77 crores computed on a provisional basis, but it has been submitted that they should be permitted to avail of the credit available to them and earned under the Served from India Scheme. Counsel submitted that the DRI informed the Petitioners by its letter dated 16 December 2011 that the Commissioner of Customs (Import) was being requested separately to permit the utilization of the Served from India Scheme Certificate towards the duty liability of Seamec-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al value of Rs.53.55 crores. According to the Petitioners, no duty was liable to be paid when the vessel was imported in 1988 since it was exempt from duty. 6. On this aspect of the matter, as the affidavit in reply filed by the Assistant Commissioner of Customs explains, the total value of the vessel for the purpose of computing provisional duty has been taken at Rs.135.64 crores. This includes two components namely, (i) The value of the vessel which is taken at Rs.53.55 crores; and (ii) Modification/upgradation carried out after 6 July 2011 which has been computed at Rs.82.09 crores. The Petitioners are undoubtedly liable to pay duty in respect of the modification/upgradation that has taken place which amount is computed on a provisiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue would have to be suitably scaled down so as to require the deposit of duty in the amount of Rs. 12.77 crores. 7. Allied to this question is whether the Petitioners should be permitted to avail of the credit which is available under the Served from India Scheme. As already noted earlier, the DRI by its letter dated 16 December 2011, informed the Petitioners that the Commissioner of Customs was being requested to permit the utilization of the Served from India Scheme certificate towards duty liability of SeamecII. The Served from India Scheme, a copy of which is annexed at Exhibit 4 to the Rejoinder provides that all service providers of services listed in Appendix 10 of Handbook of Procedures, who have a total foreign exchange earnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssel. As already noted earlier, the Department has expressed its readiness to reduce the Bank Guarantee from 20% to 10%. Consequently, in modification of the second condition, we direct that the Petitioners shall submit a Bank Guarantee of 10% of the assessable value of the goods (excluding the value of the vessel) which is quantified at Rs.8.20 crores. 9. We also record the statement which has been made on behalf of the Petitioners that the vessel SeamecII is presently under a three year charter with ONGC and is to be plied only in the territorial waters of India. We record the undertaking of the Petitioners that this position shall not be altered in any manner except with the prior permission of the Customs authorities pending the adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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