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TMI Blog2024 (6) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... port Fuzerah UAE under cover of the port of clearance dated 02.08.2019. However, on 06.08.2019 tug arrived at Alang encourage. The appellant vide letter dated 05.08.2019 had informed that tug was due to arrive at Alang encourage for breaking purpose. The appellant vide letter dated 14.08.2019 submitted the details of coastal consumption of MGO (high speed diesel) Lub. Oil, provision store and informed that they were ready to pay custom duty on the quantity of provisions and bunkers. Accordingly, manual Bill of Entry No. 03/2019-20 dated 04.09.2019 as permitted by the Commissioner of Customs (prev.), Jamnagar was filed and the same was provisionally assessed for want of test result of bunker. On 20.09.2019 the appellant paid provisionally assessed custom duty of Rs. 7,09,716/- however vide letter dated 01.10.2019 the adjudicating authority after hearing the appellant and considering the written submission passed the final assessment order dated 03.03.2020 and finally assessed Bill of Entry at the same value and same duty as assessed at the time of provisional assessment. As per the adjudicating authority the appellant was required to complete procedure of costal conversion at SBY Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stal duty, coastal goods, coastal cargo. It is the submission that since the vessel along with bunkers is assessed for the purpose of breaking of tug the bunkers cannot be classified separately and cannot be demanded duty of coastal duty. He placed Reliance on the following judgments:- * 1987 (29) ELT 182 (Tri.) Collector of Customs, Ahmadabad V/s Shipping Corporation of India Ltd., * 1989(43) ELT 479 (Tri.) Collector of Customs & Central Excise V/s South East Asia Shipping Company Ltd., * 2000(123) ELT 91 (CAL.) Scindia Steam Navigation Co. Ltd. V/s Collector of Customs, * 2009 (240) ELT 723 (Tri. Ahmd) Jain Marine Services v/s CC, Jamnagar * 1987 (29) ELT 182 (Tri. Bombay) Collector of Customs v/s Shipping Corporation of India Ltd 3. Shri Rajesh Nathan, learned Assistant Commissioner (AR) appearing on behalf of Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that as per the facts of the case there is no dispute that the tug was brought to Alang port for breaking therefore the same is correctly classified under 8908.00.00 of the Custom Tariff Act, since the tug was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any time carried Indian goods or discharged Indian goods in any of the Indian ports. Admittedly, the vessel Anupama was engaged till 12-1-1976 in transportation of imported cargo between Indian ports. Thereafter, it sailed to Calcutta and then to Aden via Kakinada. 9. The Assistant Collector recorded a finding that the vessel has to be considered as having been reverted to coastal trade, firstly because there was a request to revert to coastal trade and secondly a Bill of Entry has also been filed and it was assessed. The Appellate Collector, however, took a different view. Relying on the judgment of the Calcutta High Court in M/s. Turner Morrison, the Appellate Collector held that the finding of the Assistant Collector that the vessel reverted to coastal trade was wrong. 10. The character of the vessel, whether it was foreign going vessel or it reverted to the coastal trade, should depend upon the voyage it performed and the nature of the goods it carried during the voyage. The request of the owners or the agents to revert to coastal trade or filing the Bill of Entry would be irrelevant in deciding the question whether the vessel in question was a foreign going vessel or not. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shippings, viz., (i) coastal shippings and (ii) foreign shippings. On the facts disclosed, it does not appear to us that this is a case of coastal shipping at all. Nancy Dee was not required to have and did not have a licence for coastal trading vide Appellant's Solicitor's letter, dated 26-12-1970 to the Assistant Collector of Customs, being Annexure B to the petition. The facts reveal that the Government of India had entered into only one contract for carriage of goods. There was only one principal which was carrying the goods, 'Nancy Dee' was an agent of the foreign principal. The entire journey from a foreign port to the port of destination in India was one journey for carriage of imported goods and 'Nancy Dee' took part towards the end in completing the journey. In other words, these super-tankers was required to carry foodgrains from a foreign port to an Indian port, namely, either Paradip or Kidderpore Docks. The super-tankers by reason of their size and weight could not physically reach any of these ports. The super-tankers waited outside the port although within Indian territorial waters. They unloaded their cargo to 'Nancy Dee' and 'Nancy Dee' carried the goods to the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not convert it into a coastal trading vessel. In this connection, reference may be made to the Departmental instructions found in the order of the Collector (Appeals). The instructions read "if a vessel completes discharge of foreign cargo at Bhavnagar and then proceeds in Ballast to another Indian port there to load cargo for another foreign port, that in Ballast journey does not constitute a break in its foreign voyage. Such a vessel is not considered to have reverted to coastal trade at any stage at all. It is all along the foreign going vessel. If a vessel after completing discharge of foreign cargo at an Indian port remains anchored in the coastal waters with no immediate future plans either to proceed to another Indian port with or without cargo or to proceed to foreign port with or without cargo then also it is wrong to consider as if it reverts to coastal trade immediately on completion of discharge of the foreign cargo. In such cases the idle time at the Indian port with no plans of future voyages immediately in sight has to be demarcated by a reasonable time limit. If the idle time was for purposes of any repairs or servicing of the vessel itself a longer time would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eviable on the stores of M.V. Anupama. However, the Assistant Collector of Customs, Bhavnagar did not accept the contention of the steamer agent that the ship was a foreign going vessel within the meaning of Section 2(21) of the Customs Act and ordered levy of duty on the stores of the ship which was paid under Bill of Entry No. 31, dated 31-7-1976 and cash No. 1, dated 2-5-1977. The same contention has been repeated during the hearing of the appeal before the Tribunal and the same decisions of the Madras and Calcutta High Courts have been cited during the course of the hearing by the learned advocate of the respondent. Therefore, the main question which requires determination is the applicability of these decisions to the appeal now before the Tribunal. 18. So far as the decision of the Madras High Court in Writ Appeals Nos. 583 to 587/1971, dated 22-4-1976 is concerned the facts of the cases related to supply of ex-bond stores to the daughter vessels without payment of duty, in terms of Section 88 of the Customs Act. The Madras High Court on appeal held that the voyages performed by the daughter vessels were in the nature of continuation of the voyages of the mother vessels and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhavnagar. The phrase "coastal trade" is not defined in the Customs Act, though Chapter XII deals with coastal goods and coasting vessels. Strictly speaking, such a definition is not essential for the consideration of the present appeal. What is important is the crucial fact that as per the agent's request, the Anupama ceased to be a foreign going vessel with effect from 26-9-75 attracting levy of duty on her stores in terms of Sections 12 and 87. 19. However, the facts of the present appeal relating to the stores of M.V. Anupama on first sight appear to be identical with the case of the 'Nancy Dee' decided by the Honourable High Court at Calcutta in appeal No. 314/71 on 3/4-5-1976. Hence, they call for a more detailed examination. The Nancy Dee arrived at Paradip on 4-1-1970 and acted as the daughter vessel upto 23-2-1970. During this period, she acted as the daughter vessel to three super-tankers and made trips from Paradip or Sandheads to Calcutta and sailed finally from Calcutta for a foreign port on 23-2-1970. The Calcutta High Court took into account the leviability of duty under Section 12 of the Customs Act on the stores as these were imported into India as defined under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms for Exports (II) of the Calcutta C.H. It would thus imply that the duty on the stores of the Nancy Dee was demanded by the Assistant Collector of Customs, Calcutta and not by the jurisdictional Assistant Collector in charge of Paradip port where the Nancy Dee arrived from a foreign port on 4-1-1970. The nature of the subsequent voyage of the Nancy Dee from Paradip to Calcutta is not explicitly revealed from the judgment of the Hon'ble High Court in Appeal No. 314/1971, dated 3/4th May, 1976. But it appears to be in the nature of the continuation of her foreign voyages as otherwise the duty on her stores would have been demanded by the Assistant Collector of Customs, Paradip. On the other hand, the facts regarding the appeal relating to the duty on the stores of the M.V. Anupama are very clear. She reverted to the coastal trade after arriving at the port of Bhavnagar. Furthermore, the Calcutta High Court was guided by the fact that the Nancy Dee was not required to have a licence for coastal trade. Under the Merchant Shipping Act, 1958, an Indian ship covered by Section 21 or a ship chartered by a citizen of India or a company cannot engage in the coasting trade without a licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to depart from the decision of a particular High Court. Following this decision of the Tribunal, I find myself unable to agree with the decision of the Calcutta High Court in the case of M/s Turner Morrison & Co. Ltd. 20. Reverting to the case of M.V. Anupama it is seen that after allowing the first appeal of the Shipping Corporation of India Ltd., the Appellate Collector of Customs in his Order No. S/49-2/79 Bhavnagar, dated 29-12-79 substantially reproduced the departmental instructions on the subject for the future guidance of the Assistant Collector. The instructions inter alia stipulated that the voyage in Ballast of a foreign going vessel from one Customs port to another to pick up cargo at the second port for export to foreign ports should be treated as a continuation of the foreign run of the vessel. These instructions also stipulate that in case a foreign going vessel is detained in Customs port for want of cargo or for repairs the reasonable period of detention in such cases should also be counted as the foreign run of the ship provided it ultimately leaves on a foreign voyage. While the Departmental instructions do not have a binding effect on the Tribunal, it is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt Manifest (Vessels) Regulations, 1971 and the Export Manifest (Vessels) Regulations, 1976. As per the first regulation, the Manifest is required to be filed in the prescribed form and with the prescribed declarations and documents. These requirements further stipulate that if a ship is not carrying any cargo for a particular Customs port, it has to file a Nil cargo manifest at that port. The Anupama would have complied with the requirements of the foregoing Sections and the Regulations when she acted as a daughter vessel to the super-tankers. The super-tankers had arrived from foreign ports and taking into account the requirements of these Sections and the Regulations it cannot be held that the services of the Anupama as a daughter vessel to the super-tankers were a continuation of the voyages of the super-tankers in the course of carrying the goods from the foreign ports to the coastal ports in India. 22. The judgments of the Madras and Calcutta High Courts held that the services extended by the daughter vessels to the mother vessels were in continuation of the foreign voyages of the mother vessels. The High Courts were guided by the fact that the super-tankers required the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the foreign voyage of the jhansi Ki Rani. From Calcutta the Anupama sailed to Kakinada on 9-1-1976 and after loading ore at Kakinada, she sailed for the foreign port of Constanza on 17-1-1976 when she again embarked on a foreign run and became a foreign going vessel at that point of time. Therefore from 26-9-1975 to 17-1-1976, the Anupama was not a foreign going vessel. Therefore, the duty on her stores was correctly chargeable as held by the Assistant Collector of Customs, Bhavnagar in his order, dated 19-10-79. At best the Agents or the owners could have claimed drawback of Customs duty under Section 74- when the Anupama left Kakinada for Constanza on 17-1-1976. 23. In the foregoing circumstances, I am of the opinion that the order of the Assistant Collector of Customs, Bhavnagar charging duty on the stores of the Anupama is correct and that the order of the Appellate Collector of Customs, dated 29-12-1979 is not legal and proper. Accordingly, I set aside the aforesaid order, dated 29-12-1979 of the Appellate Collector of Customs, allow the appeal of the Collector of Customs, Ahmedabad and restore the order I.G.M. No. 15/21-7-75, dated 19-10-1979 of' the Assistant Collector o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances, in keeping with the practice of this Tribunal, I hold that the ratio of the Calcutta and Madras High Court judgments supra is binding on me. The fact that to begin with the respondents themselves had applied for conversion of the vessel as a coastal vessel cannot be held against them as estoppel once they realised their mistake in view of the High Court judgments and took remedial action in time. The point that Customs duty was demanded by the officers at this port or that is hardly material. 27. I, therefore, agree with the learned Member (Judicial), reject this appeal and discharge the revision show cause notice issued by the Central Government. Bombay, dated 29-12-1986. Sd/- (K.L. Rekhi) Member (Technical) FINAL ORDER 28. In view of the difference of opinion between the two Members of this Bench, who first heard the appeal of the Collector of Customs, Ahmedabad, the point of difference was referred by the President to the third Member, Shri K.L. Rekhi who has given his finding on the point of difference. Therefore, this appeal has to be decided on the basis of the majority opinion'. In majority view, the appeal of the Collector of Customs, Ahmedabad is rej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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