TMI Blog2023 (9) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... such duty will be calculated at that percentage of the value of the imported articles. It is the option of the importer to pay duty either in terms of clause (a) of the condition 82 of the notification or in terms of clause (b) Condition 82 of the notification. Ideally the original Adjudicating Authority, should have sought option from the importer and acted accordingly to assess either under Clause (a) of the Condition 82 or Clause (b) of the condition 82 of the Notification 12/2012- Cus dated 17.03.2012. Secondly, it is noticed from the impugned order that the value of the vessel declared in the insurance certificate has been taken and no opportunity has been granted to the appellants to refute or challenge the said value. In case the appellants wish to assess the goods under Clause (b) of the Condition 82 of the notification then they may be given opportunity to participate in determination of correct value of the vessels for the purpose of assessment. Thus, it is open to the appellants to seek assessment either under Clause (a) or Clause (b) of the Condition 82 of the Notification 12/2012-Cus dated 1703.2012. In case they opt for assessment under Clause (b) then duty will be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.3 Bills of Entry No. F-40/31.08.2012 - MV Star Masaya The appellant had filed Bills of Entry declaring value of Vessel Rs.111,90,00,000/- (Based on value of vessel declared for Insurance 2,00,00,000 US $ X Rs. 55.95 Exchange Rate) and duty Rs.5,76,285/- (i.e.Rs.6,91,54,200/120 - @ 6% CVD + 2% Education Cess and 1% Secondary amp; Higher Education Cess) as per Sr. No. 462 of Notification No. 12/2012-Customs dated 17.03.2012 as amended. 2.2 Initially the assessment was done provisionally while taking the contract value for the purpose of assessment under Notification No.12/2012-Cus dated 17.03.2012. Learned Counsel submitted following as the calculation of the duty: 5.1 Bills of Entry No. F-18/12-13 dated 05.06.2012 M V Dubai Faith (Page 76 of the appeal memorandum) was assessed by taking value of Vessel Rs. 2,34,48,645 (Based on 30,000 MT cargo + - 10% = 33,000 MT X US $ 12.70 PMT freight = 4,19,100 US $ X 55.95 Exchange Rate) and duty Rs.14,49,126/- (@ 6% CVD + 2% Education Cess and 1% Secondary amp; Higher Education Cess) as per Sr. No. 306 of Notification No. 12/2012- dated 17.03.2012 as amended. 5.2 Bills of Entry No. F-32/08.08.2012 MV Athena (Page 122 of appeal memorandum) wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable duty means the Additional duty of Customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975). 3.2 Learned Counsel pointed out that in conversion to coastal runs vessels are always imported under lease agreement or contract similar to the one involved in the current imports. Learned Counsel argued that the applicable duty mentioned in clause (b) of the condition is to be are calculated on the contract value and not on the full value of the ship. He pointed out that the Clause (a) (b) separated by a semicolon, and therefore Clause (a) (b) of the condition needs to be read together. Thus, he argued, first duty is to be calculated in terms of Clause a of the Condition 82 on the basis of contract value and thereafter benefit of Clause b is to be extended depending on the period of import. 3.3 He argued that, if the interpretation made by the Learned Counsel is not accepted that assessment cannot be done in a situation, where import is done by owner of the vessel as in those cases there is no sale of goods (vessel) is involved and no transaction value is available. He pointed out that in the instant case the conversion was made from foreign run ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to pay,- a. full duty on the vessel if it converts to coastal status against a general licence; b. 1/120th part of the aggregate duty payable on the vessel for each month (or part thereof) of operation as a coastal vessel if such conversion is for a specified period. Notification No. 12/2012-Central Excise dated 17th March. 2012 has been issued for this purpose. (b) For the removal of doubts, a retrospective exemption from additional duty of customs (CVD) has been provided to foreigngoing vessels imported into India for the period form 1st March, 2011 to 16th March, 2012 [Clasue 125 of the Finance Bill, 2012 refers]. This shall come into effect on the date of enactment of the Bill. (c) For the period starting 17th March, 2012, also full exemption from additional duty has been provided to foreign going vessels imported into India but on the fulfilment of certain conditions viz that a Bill of entry shall be filed for the vessel when it converts into a coastal vessel and additional duty would be payable on the following basis: i. if the licence obtained for coastal trade at the time of conversion is a general one i.e. without specified period of validity, duty would be payable as if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble regarding value of the ships, the value of insurance has been wrongly taken without giving an opportunity to the appellants to present their case regarding the value of the ships. 4. Learned AR relied on the impugned order. 5. We have considered rival submissions. We find that Sr. No 462 of the Notification 12/2012 dated 17.03.2012 reads as follows: the Condition 82 reads as follows: Sr. No. Chapter or Heading or Sub-heading or Tariff item Description of Goods Standard Rate Additional Duty Rate Condition No. 462 8901 Foreign going vessel Nil Nil 82 If,- the importer files a bill of entry under section 46 of the Customs Act, 1962, [No. 52 of 1962] at the time of conversion of vessel for coastal run subsequent to import and pays the applicable duty of customs on:- (a) full lease or contract value, if the import is under a lease agreement or contract; (b) 1/120th of the applicable duty, for each month or part thereof, of stay in India as coastal vessel. Explanation.- For the purposes of this entry, (1) Foreign going vessel shall have the same meaning as assigned to it under clause (21) of Section 2 of the Customs 1962, (No. 52 of 1962); (2) Conversion to coastal Vessel shall inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holic liquor belongs. Explanation.- In this section, the expression the excise duty for the time being leviable on a like article if produced or manufactured in India means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty. From the above, it is clear that the applicable duty is to be calculated at any percentage of the value of goods then such duty will be calculated at that percentage of the value of the imported articles. 5.3 The appellants have relied on the letters of Joint Secretary issued in respect of this notification. The Letter of Joint Secretory also contained the illustration 1 and 2 which are reproduced below: Illustration 1: If a vessel imported by a Shipping Line ABC Company as a foreign-going vessel converts into a coastal vessel for 6 months and the value of the vessel declared by the importer is *2 crore, the duty payable would be calculated in the following manner: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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