TMI Blog2015 (11) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 years itself shows that the Customs were aware that this vessel had been imported into India. After a gap of 14 years when duty has become imposable on import of a vessel, Revenue’s stand that since IGM/Bill of Entry was not filed in 1997 duty must be paid now is not reasonable. Goods on which no duty is chargeable under the tariff or by way of exemption notification will not be regarded as dutiable goods. Therefore clearly Section 111(f) is not applicable and goods are not liable to confiscation. Contravention of Section 32 is not possible as there is no question of unloading a vessel. Therefore the finding that the vessel is liable for confiscation for violation of Section 32 is also not sustainable. Import, which in terms of the definition under Section 2(23) means bringing into India from a place outside India, had got completed in 1997. Customs duty is charged under Section 12 of the Customs Act when the goods are imported into India. When by general practice the IGM/Bill of Entry was not filed for vessel imported into India when the duty was Nil, the proposition that duty may be levied after 14 years when the Bill of Entry was got filed would lead to a anachronistic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessable value. The appellant approached the Hon ble Mumbai High Court, who vide order dated 13/2/2014 directed Customs to allow the release without payment of Customs duty and on execution of Bank Guarantee of ₹ 10 Lakhs and a Bond. In its order the High Court observed that as the Custom Authorities have permitted the use of the vessel all these years as imported goods Custom authorities are not justified in abruptly seizing the vessel in question The Revenue is not justified in demanding duty for provisional release of the vessel,prima facie it is not undisputed that on the date of initial import on all these ocean going vessels there was total exemption on payment of duty. In adjudication the Commissioner confiscated the vessel with option to redeem on payment of redemption fine of ₹ 55 lakhs. He confirmed the demand of duty of ₹ 92,46,015/- under Section 125(2). He also imposed penalty of ₹ 18 Lakhs on the appellant under Section 112(a), penalty of ₹ 5 Lakhs on the Dy.Managing Director under Section 112(a)/(b) and under Section 114 AA and ₹ 5 lakhs on the Shipping Agent under Section 112(a). The appellant and its Director are in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuring provisional release of the vessel under Section 110(A), Revenue would not be justified in taking original value of the vessel. Reliance is also placed on the High Court judgment in Writ Petition No. 104/2012 dated 13/2/2012 in the case of Great Offshore Ltd. in which the High Court, while deciding the case of provisional release, observed that since the seized vessel was imported prior to 2000, prima facie, custom duty on the said vessel were not payable. Ld. Counsel also relied upon Tribunal order A/1110/14/CSTB/C-1 dated 2/7/2014 in the case of Samsung Maritime Ltd. which order not considered in the present case. Reliance is also placed on the recent judgment of the Tribunal in the case of Shipping Corporation of India vide order A/1709/14/CSTB/C-I dated 5/11/2014 in which it was held that the vessel brought for the first time into India at Port Sikka was not required to file IGM or Bill of Entry in terms of Circular 16/2012 dated 13/6/2012; further it was held that the Commissioner of Customs at Mumbai not having jurisdiction over Sikka Port could not issue show cause notice proposing confiscation as the act was committed beyond his jurisdiction. 5. Ld. A.R. appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, who caused such delay, shall be liable to a penalty not exceeding fifty thousand rupees. The Commissioner also refers to the Import Manifest Vessels Regulations 1971(hereinafter referred as Regulations) which provide the format and procedure for filing the Import Manifest in respect of the imported goods. The finding is that if the vessel was brought as imported goods itself and not as a conveyance only, it should have been specifically mentioned in the IGM. This was not done; instead the IGM only declared the imported cargo, that is, the ship stores and fuel. In other words, the IGM showed the vessel as a conveyance carrying stores and fuel and not as goods. Goods is defined in Section 2(22) of the Customs Act to include (a) Vessel, Aircraft and Vehicles; (b).. (c ).. Therefore, according to the Commissioner, it was incumbent upon the appellant to present a Bill of Entry in terms of Section 46 declaring the import of such vessel in the Bill of Entry as goods imported. Failure to do so, according to the Commissioner rendered the vessel liable to confiscation under Section 111(f) for contravention of Sections 32 34 of the Customs Act. Section 32 states that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 111(f) is not applicable and goods are not liable to confiscation. Contravention of Section 32 is not possible as there is no question of unloading a vessel. Therefore the finding that the vessel is liable for confiscation for violation of Section 32 is also not sustainable. 6.4. Revenue has cited Sections 46 15 holding that consequent to the order of Honble Bombay High Court granting provisional release, the Bill of Entry was filed under Section 46 and the rate of duty on the date of filing of Bill of Entry would be applicable for assessment and determination of duty in terms of Section 15. And because the Bill of Entry was filed on 22.3.2012 duty is payable because vessels were leviable to duty on this date. We find that Board issued a Circular (supra) dated 13.6.2012 to remove confusion on the subject and explain the procedures for import of Indian flag vessels and filing of IGM/Bill of Entry. In paras 3.1 3.3, while enumerating categories of vessels, it requires that for vessels entering into India for the first time on arrival in the country for registration as Indian Flag vessel, the Customs declarations such as IGM/Bill of Entry are required to be filed. It also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also imported at nil; rate of duty. The matter attained finality by passing of CESTAT Order A/1190/2014/CSTB/C-I dt. 2.7.2014. We also note that the Indian National Shipowners Association made a Reference No. CEO/145/2011 dt. October 12, 2011 to CBEC giving a list of about 200 vessels out of which more than 100 were imported before 2001 when duty was introduced. It was made clear that Bill of Entry were not filed in these cases. The Association requested for condoning the delay in filing of the Bill of Entry as a procedural delay. It appears that action has not been taken in respect of all the vessels and there is discrimination against the appellant. This indicates that there is no certainty in the legality of the action taken against the appellant. Therefore in the circumstances the Customs cannot demand duty in the present case. 6.7. It would be relevant to note the decision of the Mumbai High Court in the case of Great Offshore Ltd. (supra). The Honble Apex Court observed that In the case of UOI v. V.M. Salgaonkar Bros. (P) Ltd. reported in AIR 1998 SC 1367 = 1998 (99) E.L.T. 3 (S.C.), the dispute was whether the customs authorities were justified in holding that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisional release of the vessels when, prima facie, it is not in dispute that on the date of initial import of these ocean going vessels, there was total exemption from payment of duty . We are aware that in the above judgments the Hon ble High Court did not express a final view in the matter. However for reasons given in paras preceding, demanding duty at this stage for a mere technical omission that occurred 14 years ago, is not sustainable. 7. Although we have opined above on merits, we would discuss a preliminary objection by the Ld. Advocate that the Commissioner at Mumbai had no jurisdiction to seize and adjudicate upon a case of goods which were imported at Chennai. The case of Revenue is that the appellant did not file the IGM/Bill of Entry at the time of import at Chennai. We find that the Commissioner of Customs at Mumbai does not have jurisdiction over Chennai port. Therefore, neither could he have issued a Show Cause Notice proposing confiscation and penalty for a contravention committed in Chennai jurisdiction. Nor could he have adjudicated the case without authority under the Act. On this ground too, we set aside the impugned order as beyond jurisdiction and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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