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TMI Blog2023 (9) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... ing fiction the coastal conversion was considered as import of vessels. He submitted that the following details in respect of the 3 imports: "4.2.1 Bills of Entry No. F-18/12-13 dated 05.06.2012 - M V Dubai Faith The appellant had filed Bills of Entry declaring value of Vessel Rs. 2,34,48,645/- (Based on 30,000 MT cargo + - 10% = 33,000 MT X 12.70 US $ PMT freight = 4,19,100 US $ X Rs. 55.95 Exchange Rate) and duty Rs. 12,076/- (i.e. Rs.14,49,126/120 - @ 6% CVD + 2% Education Cess and 1% Secondary & Higher Education Cess) as per Sr. No. 306 of Notification No. 12/2012-CEdated 17.03.2012 as amended. 4.2.2 Bills of Entry No. F-32/08.08.2012 - MV Athena The appellant had filed Bills of Entry declaring value of Vessel Rs. 80,42,40,000/- (Based on value of vessel declared for Insurance - 1,44,00,000 US $ X Rs. 55.85 Exchange Rate) and duty Rs.4,14,184 (i.e.Rs.4,97,02,032/120 - @ 6% CVD + 2% Education Cess and 1% Secondary & Higher Education Cess) as per Sr. No. 306 of Notification No. 12/2012-CE dated 17.03.2012 as amended. 4.2.3 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/- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cus dated 17.03.2012. He pointed out that the Condition No. 82 prescribed the following Condition: 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 include the vessel granted a license for coastal trade under sec- tion 407 of the Merchant Shipping Act, 1958 (44 of 1958) by the Director General Shipping and the vessel granted permission for carrying coastal goods, under the provisions specified in Chapter XII, of the Cus- toms Act, 1962 (No. 52 of 1962) by the proper officer of the Customs; (3) "applicable duty" means the Additional duty of Customs under sub-section (1) of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise duty (and hence CVD) available to ships, vessels and dredgers (goods of Chapter 89) was withdrawn in the last Budget and a concessional duty of 1% was imposed on the condition that no Cenvat Credit is taken by the manufacturer. Correspondingly, CVD of 5% became leviable on the import of these goods. By virtue of notification no.38/2011-CE dated 29th July, 2011 full exemption was granted to all goods of heading 8901 in respect of which a general licence under section 406 of the Merchant Shipping Act, 1958 has been granted by the Director General Shipping. The following changes have been made in the duty structure applicable to ships, vessels and dredgers: (a) full exemption from excise duty available to ships and vessels shall now be available subject to fulfilment of the following conditions: i. If the ship or vessel is procured by a company or person holding a general licence- Indian/ foreign issued by the Director General, Shipping under section 406 of the Merchant Shipping Act, 1958 for the ship or vessel: ii. the ship or vessel is used only for this purpose; iii. such company or person undertakes to pay,- a. full duty on the vessel if it converts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in the carriage of goods or passengers In the case of import of dredgers too, additional duty would be payable on the basis of length of stay in India or lease value (as discussed for foreigngoing vessels at sub-para (b) above). However, this duty would be payable at the time of import of the dredger. Notification No. 19 and 20/2012-Customs both dated 17th March, 2012 have been issued for this purpose." 3.6 He argued that in terms of the said clarification also, duty is to be paid under Clause (b) of the Condition 82 of the notification by adopting by charter party contract value and not the full value of the ship. 3.7 Learned Counsel further pointed out that in respect of bill of entry No. F 32 dated 08/08/2012 in respect of vessel MV Athena, the duty has been calculated for 2 months in place of 1 month. He pointed out that vessel was converted into coastal run and back to foreign run vessel in the same month i.e. on 04.08.2012 and 13.08.2012 respectively. Learned Counsel argued that this fact was brought to the notice of Commissioner (Appeals), but no findings have been given in respect of this. He further pointed out that, while there was other evidence available reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has clearly been denied as the additional duty of customs under Section 3(1) of Custom Tariff Act, 1975 (Act No. 51 of 1975). The Section 3(1) of the Custom Tariff Act reads as follows : "3(1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage, of the value of the imported article: Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the Official Gazete, specify the rate of additional duty having regard to the excise duty for the time being leviable on a like alcoholic liquor produced or manufactured in different states or, if a like alcoholic liquor is not produced or manufactured in any state, then, having regard to the excise duty which would be leviable for the time being in different states on the class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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. 5.5 Appellants have also claimed that in respect of bill of entry No. F 32 dt.08.08.2012 in respect of MV Athena, the coastal conversion was for a period of less than 1 month, whereas while calculating the duty, the said fact has been ignored and duty has been calculated taking the sought period to be equal to 2 months. The said fact may also be verified. 6. In the facts and circumstances of the case, we hold that it is open to the appellants to seek assessment either under Clause (a) or Clause (b) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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