TMI Blog1987 (10) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... orted by Shipping Corporation were registered under the Merchant Shipping Act on August 23, 1968 and September 17, 1968, respectively. The two vessels were used by the Shipping Corporation from the year 1968 onwards as ocean going vessels. On October 11, 1958, the Customs Authorities had issued an exemption notification bearing No. 262-Cus. and it reads as under : "Exemption to ocean going vessels other than vessels imported to be broken up : Ocean going vessels other than vessels imported to be broken up, are exempt from the payment of Customs duty leviable thereon. Provided that any such vessel subsequently broken up shall be chargeable with the duty which would be payable on her if she were imported to be broken up." 2. In the year 1980 the Shipping Corporation sold both the vessels to Vijaya Lines Private Limited and the purchaser also used the ships as ocean going vessels. In the year 1982 the ships were purchased by petitioner No. 2. The last overseas voyage of Vijaya Jiwan was in February 1982, while that of Vijay Vaibhav in April 1982. The petitioner No. 2 used the vessels for plying between coast to coast and the last coastal voyage of Vijay Jiwan was undertaken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip owners shall also file the bills of entry and undertake to collect the sum representing the estimated amount of duty determined by the Customs, (b) the ship owners shall deposit the sum collected from the buyer with the Customs House on account of the ship sold, (c) M.S.T.C. will issue no objection certificate only after the evidence reflecting the payment of deposit of the amount with the Customs House is produced, and (d) the Customs House would then assess the bill of entry and adjust the deposit already available with them towards the duty chargeable on vessel and then permit clearance. 3. The petitioners repeatedly informed respondent No. 5 that the procedure prescribed under the Public Notice, dated March 1, 1984 cannot be applied in respect of sale of two vessels imported in the year 1968, but respondent No. 5 did not send any reply and that led the petitioners to file the present petition under Article 226 of the Constitution of India in this Court on November 13, 1984. The petitioners sought several reliefs, but it is not necessary to set them out in detail in view of the fact that because of the subsequent events many of the reliefs no longer survive. The petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viable should be at the rate prevalent on the date of the import and on the value which was prevalent in August and September 1968. Shri Dalal also submitted that as both the ships were imported in the year 1968 and that is long prior to the constitution of respondent No. 4, it is not necessary to secure prior permission of M.S.T.C. and the requirement of the Public Notice, dated March 1, 1984 can have no application to the ships of the petitioners. In support of the submission, reliance was placed on the decision of the Division Bench of the Calcutta High Court reported in 1986 (23) E.L.T. 321 (Ram Niwas Chaudhary v. Metal Scrap Trade Corporation Ltd. and Others) and the decision of the Division Bench in the present petition granting interim relief and reported in 1986 (7) Excise Customs Cases page 90. 5. The issues raised in this petition are no longer res Integra, because the Division Bench of this Court sitting at Panjim (Goa) considered identical issues in Writ Petition No. 14 of 1985 (Vishal Gomantak Shipping Co. Pvt. Ltd. and Others v. Union of India and Another) and by judgment, dated April 22, 1987 held that in view of the decision of "the Full Bench of this Court in Apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ship and not for the ship itself and therefore the import should be held as one having taken place in the year 1982. It is not possible to accept the submission of the learned Counsel, because identical contentions urged before the Division Bench at Panjim were turned down. Shri Bhabha also urged that the decision of the Division Bench of the Calcutta High court should be ignored as it does not refer to the definitions of Sections 2(9) and 2(22) of the Customs Act. It is not possible to accept the submission of the learned Counsel. The Calcutta High Court was specifically concerned with the question as to whether the permission of M.S.T.C. is required in respect of scrapping of ships imported prior to the year 1978 and Mr. Justice M.M. Dutt, as he then was, speaking for the Bench observed that the contention is absurd on the face of the definition of the word "import" as given in Clause 23 of Section 2 of the Customs Act, 1962. The learned Judge observed that in view of the definition of the word 'import' read with the definition of the word 'India' there cannot be any doubt whatsoever that the ships were imported in India in the year 1968 when M.S.T.C. was not the canalizin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, all territories under the suzerainty of such a Indian Ruler, and the tribal areas; (b) as respects any period after the establishment of the Dominion of India and before the commencement of the Constitution, all territories for the time being included in that Dominion; and (c) as respects any period after the commencement of the Constitution, all territories for the time being comprised in the territory of India." Shri Cooper referred to Article 1(3) of the Constitution of India which prescribes that the territory of India shall comprise (a) the territories of the States, (b) the Union territories specified in the First Schedule, and (c) such other territories as may be acquired. Relying on these provisions it was contended by the learned Counsel that under the provisions of the Imports Control Act import takes place only when the goods reach Indian land mass. It was further urged that the Full Bench in Apar's case was considering the question as to when import takes place in accordance with provisions of the Customs Act, and the conclusion that the import takes place when the goods enter territorial waters is based upon specific provisions of Sections 2(23) and 2(27) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomic Zone and Other Maritime Zones Act, 1976 in support of his submission. Section 3(1) provides that the sovereignty of India extends and has always extended to the territorial waters of India and to the seabed and subsoil underlying, and the air space over such waters. Sub-section (2) provides that the limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline. Shri Dalal also invited our attention to Article 297 of the Constitution which provides that all lands, minerals and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone of India shall vest in the Union and be held for the purpose of Union. Article 297(3) provides that the limit of the territorial waters, the continental shelf, the exclusive economic zone and other maritime zones of India shall be such as may be specified, from time to time, by or under any law made by the Parliament. Shri Dalal also referred us to the observations of Oppenham in Paragraph 172 of Volume I, 8th Edition, to submit that the territorial waters also form part of the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act means any vessel or aircraft for the time being engaged in the carriage of goods or passengers between any port in India and any port outside India. It is not in dispute that the two vessels were ocean going vessels when purchased by the Shipping Corporation and used for that purpose from 1968 onwards. The question which requires determination is whether the two vessels were bought by the Shipping Corporation merely as a conveyance and not as goods. To understand the question, it is necessary to make reference to the definition "conveyance" and "goods" occurring under the Customs Act. Section 2(9) of the Customs Act prescribes that "conveyance" includes a vessel, an aircraft and a vehicle. The expression "goods" under Section 2(22) includes vessels, aircraft and vehicles. Shri Cooper submitted that if the vessel enters the territorial waters merely as a conveyance or as carrier of the goods, then it cannot be suggested that the vessel was imported. The learned Counsel urged that the vessel could come within the definition of 'goods' but not if used as conveyance. The submission is correct, because if the vessel enters the territorial waters for the purpose of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, to hold that the intention was not to import the vessels as goods but merely as a conveyance. It is not possible to accede to the submission. It is not possible to hold that all ocean going vessels on their entering into the territorial waters cannot be said to be imported into India. The fact that exemption notification issued on October 11, 1958 provides that ocean going vessels other than vessels imported to be broken up are exempted from payment of Customs duty is a telltale circumstance to establish that even ocean going vessels were considered and treated as imported by the respondents. If ocean going vessels are not to be considered as imported, then there was no occasion to issue the exemption notification exempting such vessel from payment of Customs duty. The submission that the bills of entries were not filed in the year 1968 is of no assistance to the respondents to claim that the ships were not imported because it was the practice of the respondents in Bombay Port not to ask for submission of bills of entries in respect of ocean going vessels because they were exempted from payment of Customs duty under the notification. The Division Bench at Goa accepted the existe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack to the Indian Port they were imported. Shri Cooper submitted that this import and export over again and again could not have been contemplated by the legislature and if it is held that the vessels were imported in 1968 but were subsequently exported, then the last date on which the ships entered the territorial waters of India before being used for the purpose of coaster voyage should be considered as the date of import. The ships were used for coast voyage in the year 1982 and, says Shri Cooper, that 1982 should be considered as a date of import. It is not possible to accept the submission of the learned Counsel. The ships were imported in the year 1968 and merely because the ships thereafter left the territorial waters of India, the ships being ocean going vessels, cannot lead to the conclusion that the ships were exported. The predominant intention of Shipping Corporation of India was to use the ships as ocean going vessels and not to export them. It is therefore not possible to accept the contention that the vessels on every occasion when left the territorial waters of India should be treated as having been exported. We cannot overlook the fact that both the vessels were re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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