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TMI Blog2013 (9) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... )" in February 2011 for undertaking salvage operations of the grounded Panamanian Flag Vessel "MSC Chitra" by Bareboat Charterer M/s. MSC Mediterranean Shipping Company SA on behalf of their Principal M/s. Smit Salvage B.V., Netherland and M/s. Smit Singapore Pte. Ltd., Singapore. The appellant did not file proper IGM and Bill of Entry for home consumption in respect of the said vessel. Investigation conducted revealed that the appellant had converted the status of the vessel from foreign to coastal on 04/02/2011 by filing a manual Bill of Entry No.51 dated 02/02/2011 for clearance of provisions and bunker fuel on the vessel and paid customs duty accordingly. The said vessel after remaining in Indian waters for about 1 1/2 months was export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t confiscation could not be done as the vessel had already left the shores of India. A penalty of Rs. 1 crore was imposed on the appellant under Section 112(a) and a penalty of Rs.25 lakhs was imposed on Shri Vijayan Chrysostom D'Souza, Senior Vice President of the appellant firm under Section 112 (a) of the Customs Act. It is against this order the appellants are before us. 4. The Ld. Counsel for the appellant submits that the duty demand in this case has been confirmed under Section 125 (2) of the Customs Act, 1962. The provisions of said section would apply only when the goods have been seized and confiscated and the goods are released to the owner or from the person to whom the goods are seized on payment of fine. In the instant case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the vessel and the cargo it was carrying, the purpose for which it was brought to India and the conversion of the vessel from foreign to coastal run was also permitted by the competent authorities. After completion of the salvage operations, after obtaining clearance from the Customs Authorities, the vessel was re-exported in March 2011. Thus, they have not suppressed any facts nor withheld any information from the department. Therefore, the question of imposing any penalty on the appellants do not arise at all. 4.1 The Ld. Counsel also relies on the Board's Circular No. 16/2012-Customs dated 13/06/2012 wherein it has been clarified as follows: "As regards the vessel for conversion into costal run/ trade as detailed in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seized and thereafter, confiscated. In the case before us there is no seizure and there is no confiscation as is evident from the Commssioner's order. Therefore, the demand of duty on the vessel by the Commissioner is clearly unsustainable in law. 6.2 It is also evident from the records that when the vessel was brought from Singapore to India, the appellant had complied with all the formalities and they had filed IGM, Bills of Entry for the goods and had discharged duty liability on the goods carried by the vessel. They had also sought permission for conversion into coastal run which was granted to them after examination of the vessel by the Customs officers. Subsequently, after completion of the operations in India they re-exported the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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