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Issues involved: Duty-free transshipment eligibility, application of Customs Act sections, time-barred duty demand.
Summary: The case involved appeals arising from Orders-in-Appeal that upheld Orders-in-Original regarding the duty-free transshipment of goods for a vessel, Tug M.T. Ruby-I, at Kandla Port. The Customs authorities at Kandla contended that the vessel was not a foreign-going vessel during the relevant time, leading to the confiscation of goods and imposition of duty and penalties. Regarding the duty-free transshipment eligibility, the appellant argued that the goods were meant for a foreign-going vessel, as the vessel was chartered and preparing to sail out of India. They relied on Sections 86 and 87 of the Customs Act to support their claim. On the other hand, the learned SDR contended that the vessel was still in Kandla Port when transshipment permission was obtained, making them ineligible for the concession. Additionally, the SDR argued that the demand for duty on certain oils was time-barred. After considering the submissions, the Tribunal found that the materials received were for repairing and preparing the vessel for its onward voyage, which was a reasonable course of action. Since the vessel eventually left the country and the transshipment permission was valid, the duty demand and penalties imposed by the Kandla Customs authorities were deemed unsustainable. Consequently, the appeals were allowed, and the decision was pronounced in open court on 5-2-2007.
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