TMI Blog2017 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, in Chapter 2, Para-15 thereof clarifies that consumables can remain on board without payment of duty - CBEC vide circular No.89/88/CX.6 dt. 30.12.1988 has further clarified that stores for consumption on board a vessel would cover stores, both consumable and non-consumable, meant for use in a ship. There is no proof or allegation whatsoever that impugned ship bait and other consumables were not used for high seas fishing operations or that they were illicitly removed into the DTA. Especially, when these trawlers themselves have been subject to ‘Nil’ rate of duty and it is not in dispute that they have come to Indian Customs Waters only for the purpose of completing import formalities and also registering them as fishing vessels, only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious provisions of the Customs Act, 1962. In adjudication, vide the impugned order dt. 31.10.2006, Commissioner dropped the proceedings proposed in the SCN. Aggrieved, the department has filed this appeal. 2. On 16.06.2017, when the matter came up for hearing, on behalf of Department, the Ld. A.R Shri M. Chander Bose reiterated the grounds of appeal and also made oral submissions, which can be broadly summarized as under : i) The Commissioner proceeded on a misconception that the imported fishing trawlers are Foreign Going Vessels. In this case, Import General Manifests were filed in terms of Section 30 of the Customs Act, 1962 on arrival of the Fishing Trawlers under reference into the country and the importers filed Bills of Entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted goods. iii) Since, the trawlers under reference did not enjoy the status of a foreign going vessel at the time of their clearance for home consumption, the bunkers, fish bait and food items or any other goods on their board clearly fall within the category of imported goods and become dutiable. 3. On the other hand, on behalf of the respondent, Ld. Advocate Shri G. Prahlad supports the adjudication. The submissions made by the ld. Advocate can be summarized as under :- a) The entire proceedings in the present matter has been initiated on the premise that the goods on board the vessel are imported into India on which customs duty is applicable. The ten trawlers imported are foreign ongoing vessels and the ship stores are g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pare parts and other articles of equipment, which is inclusive definition and includes within its ambit all such goods which are for use in a vessel Fish baits are used in the vessel only, for fishing operations, without which fishing operations cannot be carried out hence, they are ship stores. e) Demanding duty on ship stores and fish baits is without any basis as there is no allegation in the SCN that these items cannot be covered under the definition of stores. f) Further reliance is placed on Circular dt. 30.12.1988 that even fish baits are ship stores as these are used for consumption on board a vessel. 4.1 Heard both sides and have gone through the facts. 42 The core issue that comes up for decision is whether the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 90. Section 87 - Imported stores may be consumed on board a foreign going vessel or aircraft - Any imported stores on board a vessel or aircraft (other than stores to which section 90 applies) may, without payment of duty, be consumed thereon as stores during the period such vessel or aircraft is a foreign-going vessel or aircraft . 4.6 Section 2 (21) of the Customs Act defines foreign going vessel as follows : 21) foreign-going vessel or aircraft means any vessel or aircraft for the time being engaged in the carnage of goods or passengers between any port or airport in India and any part or airport outside India, whether touching any intermediate port or airport in India or not, any includes - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Filing of Stores List: 15 When entering any port, all ships are required to furnish to the Commissioner of Customs, a list (or nil return) of ships stores intended for landing (excluding any consumable stores issued from any duty paid shops in India), Retention on board of imported stores is governed by Import Store (Retention on board) Regulations, 1963. The consumable stores can remain on board without payment of import duties during the period the vessel/Aircraft remains foreign going 4.8 We further find that CBEC vid circular No.89/88/CX.6 dt. 30.12.1988 has further clarified that stores for consumption on board a vessel would cover stores, both consumable and non-consumable, meant for use in a ship. 4.9 In our view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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