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TMI Blog2012 (8) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Tug Century Star-1 reached KPD on 21.11.2008. The IGM filed at Custom House by the agent, M/s. Atlantic Shipping Pvt. Ltd. did not mention anything regarding the Barge Star-3002 or the goods contained therein. Master of the Tug Century Star-1 or the Steamer Agent neither informed the Boarding Officer of the Customs regarding the Barge Star-3002 having been towed by Tug Century Star-1, nor had produced any document relating to the Barge. Detailed investigation was carried out and a statement of Shri Chinmoy Ghosal, Deputy Manager of M/s. Atlantic Shipping Pvt. Ltd. was recorded. Thereafter, M/s. Atlantic Shipping Pvt. Ltd. submitted certain documents and then the Department was in correspondence with M/s. Babaji Shivram and M/s. Geo Star Surveys Pvt. Ltd. In response to the Department s letter dated 29.06.2009, M/s. Century Star Shipping informed vide their letter dated 06.07.2009 that the Tug Century Star-1 was time-chartered by M/s. Geo Star Surveys Pvt. Ltd. for trip to Myanmar(Sittwe). As per the instruction of Charter Party Agreement between Century Star Shipping Ltd. and Geo Star Surveys Pvt. Ltd., the Barge Star-3002 was tied at virtual jetty at Sagar point and that und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive lakh only) under section 125(1) of the CA 62. (c) I impose a penalty of Rs.1,00,000/-(Rupees one lakh only) to Capt. Suran Shanmugam, Master of the Tug Century Star-1(noticee no.2) u/s 112 of CA 62. (d) I impose a penalty of Rs.30,00,000/-(Rupees thirty lakh only) to M/s Century Star Shipping Pvt. Ltd.(noticee no.1), u/s 112(a) of CA 62. (e) I impose a penalty of Rs.10,00,000/-(Rupees ten lakh only) to M/s Atlantic Shipping Pvt. Ltd.(noticee no.10) u/s 112(a) of CA 62. (f) I impose a penalty of Rs.10,00,000/-(Rupees ten lakh only) to M/s B.Ghosh & Co. Pvt. Ltd.(noticee no.9) u/s 112(a) of CA 62. (g) I impose a penalty of Rs.2,00,000/-(Rupees two lakh only) to M/s. Babaji Shivaram Clearing and Carriers Pvt. Ltd. u/s 112(a) of CA 62. (h) I do not impose any penalty on other noticees(i.e.noticee nos.3,4,6,7&11) 4. The contentions of the Appellant, M/s. Century Star Shipping Ltd. are as follows:- i) Permission was granted on October 19, 2006 by the Director General of Shipping, Government of India, to Electrosteel Castings Limited, Kolkata to charter the foreign flag vessels", the Barge and the Tug, and use the same for shipment of coal in bulk from Paradip to Haldia. ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radip dated 20.10.2006. Upon payment of duty, the permission for carrying cargo to Chittagong was also granted to the Tug and the Barge by the Jurisdictional Customs Authorities. In such circumstances, it is a settled law it is settled law for movements/voyages in or out of the country the Barge, in any event, becomes a foreign going vessel and cannot be said to be imported goods . In support of their contention, they have placed reliance of the Tribunal s decision in the case of Noble Asset Co. Ltd. vs. CC(Prev.) reported ion 2006(205) ELT 901(T). In that case, the Tribunal also held that the Tug was not required to file an import manifest declaring the Barge as goods. Therefore, there is no contravention of either Section 30 of the Act or Section 111(a), (d), (f), (g) or (h) of the Act. 4.2. The contention is that since the Barge is not liable for confiscation, the Tug is also not liable for confiscation. 4.3. The contention is that the confiscation of the Tug is even otherwise is contrary to the law. When the Tug was seized and confiscated on 22.06.2009 alleging that it had brought the Barge within the territorial water of India without filing proper manifest from which the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they had no liability towards contravention of the alleged provisions of Section 111 of the Act and hence, no penalty is warranted against them. 8. On the other hand, the Department has challenged the Order-in-Original in case of M/s. Maeksin Shipping Co. Pvt. Ltd.; Captain Sri Suran Shanmughan, Master of Tug Century Star-1; M/s. B.Ghose & Co. Pvt. Ltd.; M/s. Captain Shri P.K.Rojin, DGM/Port Captain; Shri Prabir Kumar Chatterjee; M/s. Atlantic Shipping Pvt. Ltd.; M/s. Geostar Surveys India Pvt. Ltd.; Shri Chinmoy Ghoshal; Deputy Manager; M/s. Century Star Shipping; and Babaji Shivram Clearing and Carriers Pvt. Ltd. - only on one ground which is reproduced hereunder:- "Though the order of confiscation and imposition of fine and penalty in lieu of confiscation is justified, the adjudicating authority refrained himself from the question of demand of duty on the imported barge since the same was not incorporated in the SCN. However, it needs to mention that the adjudicating authority had agreed to the declared value of the barge instead of value given at the time of seizure of the same and so, this is a valuation dispute case where it would be in order for adiudicating authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter repairs from Sharjah by Noble in the year 1999. While importers claim that the practice as mentioned above should have been equally applicable to these movements also and therefore no duty can be recovered, when Bill of Entry had already been once filed in the year 1987, the Revenue contends that the practice as admitted in Sedcos case has no application, when either the rig moves out of India to another country or when the rig ceases to be operating under the contract with ONGC. In the course of the arguments, the counsel also referred to the expression foreign going vessel defined in Section 2(21) of the Customs Act, 1962 and submitted that the rig satisfied, the definition of a vessel, and therefore once a vessel is assessed to duty, it ceases to be goods and becomes a conveyance, which was then not liable for payment of duty for movements in and out of India. It was submitted that this was the reason why ships and vessels, imported by various shipping companies in India were only liable to duty once when they were brought to India for the first time and were thereafter not liable to suffer duties for each voyage of movement in and out of the port/country. It was further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssel in Section 2 (21) of the Act qualified words unless the context otherwise required. The Court took a view of the matter in Pride Forma s case, while construing the provisions of Section 86 & 87 of the Customs Act in view of this opening sentence of the definition. This decision does not hold that a rig is not a vessel at all. This being the position, no duty could be demanded on the movement of vessels in and out of India once it has been assessed to duty and cleared for home consumption. The question of duty on ship stores being only different. To take a contrary view would be to unsettle, practice of last 100 years or more, as ships and vessels have been arriving in and going out of India without suffering duties of Customs from time immemorial. Many such ships, also undergoes repair just before their arrival in India. None of these vessels or the addition made to such vessels on account of repairs have been shown to be held liable to duty. To take a contrary view in the present case, would be clearly against the scheme of the Customs as well as the well settled practice of the Customs. In any case demands of duty by changing such practice can be only prospective, & bar of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e necessary approval from the proper officer for unloading of the cargo, if any, on such rig. However, such Manifest is required on calling at a Port. The rig did not call at Bombay Port but went & operated in EEZ location which are not notified/declred to be Port Areas of Bombay. Therefore, IGM & BE presentation was not called. It is not the case of the Revenue that at the time of arrival of the rig into EEZ from Bahrain, the rig contained cargo which needed to be declared and disclosed in the import manifest. Essar would be correct in pleading that even after certain parts and components had been replaced in the rig, such parts and components would become a part of the rig and cannot be treated as if they were being separately imported on board a rig as cargo. This is also not the case made out by Revenue. As such, in the absence of any dutiable cargo on board the rig, Essar could not be required to file an IGM at the time of its re-entry into the EEZ from Bahrain. The Commissioner finds in para 192 that there was violation of Sections 30, 31, 34, 35 and 46 of the Customs Act, 1962 and therefore the rig was liable for confiscation under various clauses of Section 111. As we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006, upon payment of duty on entry of the vessels and the permission for carrying cargo to Chittagong was also granted to the Tug and the Barge by the Jurisdictional Customs Authorities. In such circumstances, it is settled law for movements/voyages in or out of the country the Barge, in any event, becomes a foreign going vessel and cannot be said to be imported goods . We find that the facts and circumstances of the aforecited case are similar to the facts and circumstances of the instant case. The above arguments are required to be re-examined. It is a settled principle that in case the duty has already been suffered, it cannot be demanded again. The penalty is linked with the demand of duty, which will depend on the outcome of the reconsideration. 9.2. In these circumstances, the case is remanded to the Original Authority to re-examine the above aspects and decide the case while keeping in view the Tribunal s decision in the case of Nobel Asset Co. Ltd. (supra). It is made clear that all the issues are kept open. Both sides are at liberty to produce the documents in their support. Needless to say that a reasonable opportunity may be granted to the Noticees. Pronounced on 25.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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