TMI Blog2008 (8) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... n them. Neither practice would confer jurisdiction nor consent would confer jurisdiction. The finding by the CESTAT in our opinion, therefore, cannot be faulted. The Appeal preferred is, therefore, dismissed. - 12 of 2007 - - - Dated:- 4-8-2008 - F.I. Rebello and R.S. Mohite, JJ. [Judgment per : F.I. Rebello, J.]. - Revenue has preferred this appeal against the common order dated 5th April, 2005 passed by CESTAT in the Appeals and Applications which were filed before it. The Appeals were preferred against the common order-in-original dated 23rd March, 2005 of the Commissioner of Central (sic) Customs (Preventive) in the matter arising out of the show cause notice dated 7th August, 2003. The Appeals preferred were allowed, both as to objection as to jurisdiction as also on other points which are set out in para. 7 of the impugned order. It is Revenue which has preferred this Appeal. 2.One of the question of law which was urged before the learned CESTAT and which was framed, read as under :- "(a)Whether the Commissioner of Customs (Preventive) was the proper officer having jurisdiction to seize the rig in the EEZ and whether he was competent to issue a show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no valid reason as to why the said territory should not extend beyond territorial waters, that is to say, into the Contiguous Zone and the Continental Shelf, subject to the limitations imposed as per the Maritime Zones Act, 1976 and the notifications issued by the Ministry of External Affairs and the Ministry of Finance. It is submitted placing reliance on the Maharashtra State Gazetteer that the distance to be covered under Territorial Waters, the Contiguous Zone and the Continental Shelf (EEZ) are measured from the base line of the coast of the district of Thane. The entire area where the operations are being carried out by the assessee would fall within Thane District. It is submitted that the Commissioner of Customs (Preventive) has also jurisdiction over the District of Mumbai and that the Government of Maharashtra in exercise of the powers conferred by clause (s) of Section 2 of the Code of Criminal Procedure, 1973 has issued a notification dated 23rd May, 1988 by which Yellowgate Police Station, Brihan Mumbai has been authorized to take all actions in relation to the Designated Area in the EEZ, that is to include all offshore installations of O.N.G.C. within the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, submitted that this practice which is of substantially long duration ought not to be disturbed by this Court, particularly when no specific prejudice is caused to the assessee by the Commissioner (Preventive) exercising the powers of search, seizure and adjudication. Referring to Section 122 of the Customs Act, it is submitted that every case under Chapter 14 dealing with confiscation of goods, etc., in which anything is liable to confiscation or any person is liable to penalty, such confiscation or penalty can be adjudicated without limit by the Commissioner of Customs. It is not the assessee's case that Commissioner of Customs (Preventive) is not a Commissioner of Customs. Reference is also then made to Section 124 of the Customs Act in the matter of show cause to point out that there is no time limit. 6.On the other hand on behalf of the respondents their learned Counsel submits that the issue is of jurisdiction and whether the Commissioner of Customs (Preventive) was the proper officer having jurisdiction to seize the rig in the exclusive economic zone and whether he was competent to issue notice and adjudicate the same, to demand duties on goods imported, assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Exploration Industries Ltd., for chartering the said Rig (commencing from the end of the contract with Essar Oil) for carrying out operations under a one-year contract awarded to Neptune Exploration and Industries Ltd., by ONGC. On completion of the contract between Neptune Exploration Industries Ltd., and ONGC, the 1st respondent filed a Shipping Bill for export of the said Rig. The Customs Authorities, however, detained the said Rig under Section 110 of the Customs Act, 1962 and issued a detention memo dated 12th May, 2001. The Rig was released on the 1st Respondent furnishing a Bank Guarantee of Rs.15.00 crores and a Bond for Rs. 97.00 crores. In 2001 the 1st Respondent exported the said Rig to Sharjah. A show cause notice dated 7th August, 2003 was served upon the 1st Respondent. It was decided on various grounds including jurisdiction. The show cause notice was confirmed by order dated 23rd November, 2005 and Appeal was preferred which Appeal was allowed on 5th April, 2006. Gazette Notifications dated 18th July, 1986 and 19th September, 1996 have been relied upon by the Respondents which list out the different areas which are notified as designated areas by the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the officers of customs. - (1) Subject to such conditions and limitations as the Board may impose, an officer of customs may exercise the powers and discharge the duties conferred or imposed on him under this Act. An officer of customs may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer or customs who is subordinate to him. Notwithstanding(3) anything contained in this section, a Commissioner (Appeals) shall not exercise the powers and discharge the duties conferred or imposed on an officer of customs other than those specified in Chapter XV and section 108." Under Section 28 when any duty has not been levied or has been short-levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short-levied or part paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. Similarly, under sub-section (2) of Section 28 it is the proper officer who has to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs working under the control of the Commissioner of Customs (Preventive) Assistant Commissioners Customs working under the control of the Commissioner Customs (Preventive) Mumbai. (5) Port of Chennai Commissioner of Customs, Chennai, Chennai Airport Deputy Commissioners of Customs working under the control of the Commissioners of Customs Chennai, Chennai Airport. Assistant commissioners of Customs working under the control of the Commissioners of Customs, Chennai, Chennai This Notification was superseded by subsequent Notification which came into effect from 1st November, 2002. Even under this Notification it is the Commissioner of Customs (Import), (Export) and other Officers designated under Table III (3) who have been conferred with the powers for the designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the Government of India from time to time. In so far as the Mumbai, Thane and Raigad Districts in the State of Maharashtara, it is the Commissioner of Customs (Preventive) Mumbai who is the Commissioner for the area of Mumbai, Thane and Raigad Districts in the State of Maharashtra. In this Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs, Bangalore, 1995 (76) E.L.T. 520 (Kar.). In that case the goods were imported through Madras Port were cleared for home consumption at Inland Container Depot, Bangalore. Short levy show cause notices were issued by Assistant Collector of Customs, IAD, Madras. The issue was whether under the notification dated 1st February, 1963 IAD Madras Officers had been conferred jurisdiction as 'proper officers' for the purpose of issuing a valid notice under Section 28(1) of the Customs Act. It was pointed out before the Court that by a Board Notification instead of Assistant Collector of Customs even the Principal Appraisers could act as proper officers. The learned Bench posed to itself a question as to whether such Officers could be the proper officers for the proper imports considering Section 28(1) of the Act. The learned Bench proceeded to hold that the Officers must have jurisdiction and, therefore, it stands to reason that the proper officer must be a officer who must be functioning within the jurisdictional Collectorate where the import in question has been effected as otherwise an anomalous situation would follow. The submission on behalf of Revenue was that any officer up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance on the judgment of the Karnataka High Court in Great Eastern Shipping Company Limited v. State of Karnataka Ors., 2004 (136) STC 520 and the judgment of the Madras High Court in M.S.S.V.M. Co. v. State of Madras, 1954 Madras 291 that the District of Thane would extend to the territorial waters i.e. 12 nautical miles from the base line and this has been accepted by the Tribunal and once that be so, the District of Thane in its longitude and latitude would also extend to its designated areas in the Contiguous Zone and the Continental Shelf of the EEZ. Reliance is also placed on the judgment of this Court in Pride Foramer v. Union of India, 2002 (148) E.L.T. 19 (Bom.). We may at the outset mention that the judgments in Great Eastern Shipping Company Limited v. State of Karnataka Ors., (supra) and M.S.S.V.M. Co. v. State of Madras, (supra) were only dealing with the issue of territorial waters and not the Contiguous Zone and the Continental Shelf. The judgment of this Court in Pride Foramer (supra), we are informed by the Counsel is in Appeal before the Supreme Court. The Respondents, however, distinguished the judgment on the ground that the issue of jurisdiction was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) the territory of India shall comprise - the territories of the States, the Union territories specified in the First Schedule; and such other territories as may be acquired. Under Article 1(2) the States and the territories thereof shall be as specified in the First Schedule. In so far as Maharashtra is concerned it consists of the territories specified under sub-section (1) of Section 8 of the State Reorgainsation Act, 1956, but excluding the territories referred to in sub-section (1) of Section 3 of the Bombay Reorganisation Act, 1960. There is no dispute that Districts of Greater Mumbai, Thane and Kolaba which includes Raigad are part of the State of Maharashtra. The question is whether the area of the district extends to the territorial waters, the continental shelf and the exclusive economic zone. The Convention on the Law of Sea known as United Nations Convention on the Law of Sea, 1982 was adopted at its 11th Session on 30th April, 1982. In terms of this Convention it was accepted that the sovereignty of a coastal States extends, beyond its land territory and internal waters and, in the case of an archipelagic State, its archipelagic waters, to an adjacent belt of sea, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es) for which separate provisions have been made. The limit of the Contiguous Zone is the line every point of which is at a distance of twenty-four nautical miles from the nearest point of the baseline and the Central Government is allowed to exercise power and take measures for the security of India and immigration, sanitation, customs and other fiscal matters. Section 6 deals with the right in the Continental Shelf. Under this Section, continental shelf comprises the sea-bed and subsoil of the submarine areas that extend beyond the limit of its territorial waters throughout the natural prolongation of its land territory to the outer edge of the continental margins or to a distance of two hundred nautical miles. Over this area of the continental shelf India has and exercised sovereign rights for the purposes of exploration, exploitation, conservation and management of all resources. Under Section 7(6) the Central Government can declare any area of the exclusive economic zone to be a designated area. By virtue of Section 7(9) in the exclusive economic zone and the air space over the zone, ships and aircraft of all States shall, subject to the exercise by India of its rights within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nard Pianka Anr. v. The Queen, (1979) A.C. 107 where the issue was power of the Magistrate to exercise jurisdiction in respect of drug offence in the territorial waters of Jamaica. Reference was made to the judgment in Reg v. Keyn. There it was observed that there was a difference of opinion as to whether the territorial belt is part of the territory of England. However, there was general concurrence that in any event the Parliament of the United Kingdom had legislative power as regards the territorial belt and, therefore, in respect of an offence committed in the territorial waters in the absence of any legislation the Court would have no jurisdiction. Understood in the proper context the area of the District of Greater Mumbai and Kolaba (Raigad) would be their land mass. The areas of districts of coastal States, definitely cannot extend into the designated areas of EEZ. The contention, therefore, urged on behalf of the Revenue that the Collector (Preventive) having been notified as the proper officer for the District of Raigad would have jurisdiction over the notified areas in the EEZ must be rejected. Once the power has been exercised under Section 4, then it is only the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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