2014 (8) TMI 1089 - AT - Customs

Permission to take the vessel out of India for dry docking at Colombo for 60 days - Held that - the issue of classification is pending in the Tribunal - the differential duty amount of ₹ 6.52 crores already paid and the applicant had also executed a bank guarantee for ₹ 8.20 crores which is still alive, we direct the applicant to execute a bank guarantee of another ₹ 3.00 crores in favour of the Commissioner of Customs (Import), New Customs House, Mumbai, to safe guard the interest of revenue. On such execution of bank guarantee of ₹ 3.00 crores, the learned Commissioner of Customs (Import), Mumbai shall allow the applicant to take the vessel outside India for dry docking for 60 days from the date of export - permission granted subject to condition.

Summary

Issues: Classification of imported vessel under Customs Tariff Heading, Confiscation of vessel, Permission to take vessel outside India for dry docking

Classification of Vessel:
The case involved the classification of an imported vessel under Customs Tariff Heading 8901 by the applicant, which was reclassified by Revenue under Customs Tariff Heading 8905. This reclassification led to a demand of Rs. 18.48 crores with interest, imposition of penalty, and confiscation of the vessel. The adjudicating authority allowed the release of the vessel upon payment of a redemption fine of Rs. 12 crores. The Tribunal, in a previous stay order, waived the pre-deposit of the remaining dues considering the amount already paid by the applicant.

Permission for Dry Docking:
The applicant filed a Miscellaneous Application seeking permission to take the vessel 'Seamec II' outside India for dry docking for 60 days at Colombo. The applicant had already paid Rs. 6.52 crores and executed a bank guarantee of Rs. 8.20 crores at the time of provisional release of the vessel, which was still active. The Tribunal considered the pending classification issue and the statutory requirement for dry docking. It directed the applicant to execute a further bank guarantee of Rs. 3.00 crores in favor of the Commissioner of Customs to safeguard the revenue's interest. Upon the execution of this additional bank guarantee, the Commissioner of Customs (Import), Mumbai, was instructed to permit the applicant to take the vessel outside India for dry docking for 60 days.

Conclusion:
The Tribunal, led by Mr. S.S. Kang, Vice President, and Mr. P.K. Jain, Member (Technical), allowed the applicant to take the vessel outside India for dry docking by requiring an additional bank guarantee to secure the revenue's interest. This decision balanced the applicant's request with the revenue's concerns, considering the pending classification issue and the statutory requirement for dry docking. The detailed analysis of the classification issue and the permission for dry docking provided a comprehensive resolution to the complex legal matters involved in the case.