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2015 (11) TMI 1023

Whether the vessel can be confiscated for non-filing of Bill of Entry in 1997 and whether duty can be demanded in 2012, the exemption having been withdrawn in 2000 - Suppression of facts - Provisional release of vessel - Section 28 - Held that:- when the impugned vessel was imported 14 years ago in 1997, it was exempted from Customs duty and although IGM was filed in respect of stores when the vessel was imported at Chennai, no IGM was filed for the vessel as goods imported into India. Neither w .....

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plicable 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 .....

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B/CB - Dated:- 8-10-2015 - Mr. P.S.Pruthi, Member (Technical) And Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri Sujay Kantawala, Advocate For the Respondent : Shri D.K.Sinha, Assistant Commissioner (A.R) ORDER Per : P.S. Pruthi This appeal is directed against Order-in-Original No. 91/2014/CAC/CC(I)/AB/Gr. VB dated 22/8/2014. 2. The Tug Ocean Garnet was imported and brought into India on contract with Hardy Exploration and Production India Ltd. in November 1997 at Chennai Port. No .....

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e the value of Tug in 1997, Bank guarantee of 10% of assessable value and payment of appropriate duty at 15.14% on 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 .....

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8(4) of the Customs Act and not under Section 125(2) which is only an enabling provision for recovery of duty. The importer willfully suppressed the fact that the vessel was imported as goods for home consumption. (ii) Therefore penalty equal to the duty amount ought to have been imposed in terms of Section 114A of the Act. (iii) The vessel was liable to confiscation under Section 111(j) also because the same was removed from Customs area without the permission of the proper officer. 3. Heard .....

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e vessel is taken to be that of 1997 i.e. ₹ 4,81,66,900/- whereas the surveyor by report dated 20/2/2012 opined the current value of Tug as ₹ 1,20,00,000/-. Further the adjudicating authority confiscated the Tug under Section 111(f) and imposed redemption fine of ₹ 5 lakhs without determining margin of profit which is mandatory under Section 125. He also confirmed duty of ₹ 92,46,015/- under Section 125(2) alongwith appropriate interest which was not the proposal in the s .....

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he 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 on behalf of Revenue reiterates the findings of the adjudication order. He emphasized when once the Bill of Entry .....

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asized by the Ld. Counsel that as a matter of general practice, when the vessels themselves were exempted from Customs duty, no IGM or Bill of Entry was filed declaring them as goods imported into the country. However, the adjudicating authority has pointed to the statutory requirement of filing IGM under Section 30 of the Customs Act. For convenience Section 30 is produced below. SECTION 30. Delivery of import manifest or import report. - (1) The person-in-charge of - (i) a vessel; or carrying .....

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r 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, .....

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se, it is clear that the vessel has entered the territorial waters and becomes chargeable to duty under Section 12 of the Customs Act. It is not disputed in the present case the Bill of Entry was filed for the stores and the fuel at the time of first import. We wanted to see a copy of the B/E to understand how the vessel was described-whether as a conveyance or as goods. However the Bill of Entry, being very old, could not be shown by either side to us. The fact remains that the vessel was conve .....

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1997. Therefore, the vessel cannot be treated as dutiable goods. In the case of Associated Cement Companies Ltd. Vs. Commissioner of Customs 2001 (128) ELT 21 (S.C.) it was held that 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. The .....

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Entry are required to be filed. It also requires that in the case of vessels which are intended for conversion from foreign run to coastal run the importer is bound to file fresh Bill of Entry at the time of its conversion and applicable duty is to be paid. Reading the Circular in the proper context clearly shows that the IGM & Bill of Entry were required at the time of first arrival/conversion. In the present case, the vessel admittedly was imported in 1997 and remained on coastal runs ther .....

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hronistic situation. Let us take the case of two ships imported at the same time when there was no duty. Under one case a Bill of Entry may have been filed and in the other case a Bill of Entry is filed after 14 years when the vessel became dutiable. Charging duty from the latter when both were imported at the same time would be a most unreasonable proposition. More so when Customs never insisted on filing a Bill of Entry for the import of the vessel and Customs continued to give clearance for c .....

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on 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. reporte .....

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port. It is also not in dispute that at the relevant time the Customs authorities were also under the belief that it is not necessary to file B/E, where there is total exemption. In the case of Seamac Limited & Anr. (supra) the Hon ble High Court observed that On this amount, the duty liability assessed provisionally works out to ₹ 12.77 crores. As regards the value of the vessel ofRs.53.55 crores, prima facie, at this stage, Counsel appearing on behalf of the Revenue does not dispute .....

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d in demanding the duty for 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 op .....

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