2012 (8) TMI 631 - AT - Customs

Confiscation of vessel and penalty imposed - alleged violation of Section 111 of Customs Act - Tug Century Star-1 which had towed the vessel Pandav-4(seized) had also towed a Barge (impugned vessel) during the month of November, 2008 - Held that - It is found that appellants have claimed that the Dumb Barge was imported into India in the year, 2006 pursuant to permission of DG-Shipping s order dated 09.10.2006. Thereafter, the Barge was converted for coastal run by virtue of the permission granted by the Deputy Commissioner of Customs, Paradip dated 20.10.2006, upon payment of duty on entry of the vessels and the permission for carrying cargo to Chittagong was also granted to the Tug and the Barge by the Jurisdictional Customs Authorities. In such circumstances, it is settled law for movements/voyages in or out of the country the Barge, in any event, becomes a foreign going vessel and cannot be said to be imported goods. It is a settled principle that in case the duty has already been suffered, it cannot be demanded again. The penalty is linked with the demand of duty, which will depend on the outcome of the reconsideration. In these circumstances, the case is remanded to the Original Authority to re-examine the above aspects

Issues Involved:
1. Confiscation of Dumb Barge Star-3002 and Tug Century Star-1.
2. Imposition of penalties on various parties.
3. Liability of duty on the Dumb Barge under Section 125(2) of the Customs Act, 1962.
4. Validity of the importation and coastal run conversion of the Dumb Barge.

Issue-wise Detailed Analysis:

1. Confiscation of Dumb Barge Star-3002 and Tug Century Star-1:
The Revenue initiated proceedings on the grounds that the Dumb Barge Star-3002 entered India illegally without declaration and was off-loaded at an unapproved place. The Commissioner ordered the confiscation of the Dumb Barge under Section 111(a), (d), (f), (g), and (h) of the Customs Act, 1962, with an option to redeem it on payment of a redemption fine of Rs. 30,00,000. Similarly, the Tug Century Star-1 was ordered to be confiscated under Section 115 of the Customs Act, 1962, with an option to redeem it on payment of a redemption fine of Rs. 75,00,000.

2. Imposition of Penalties on Various Parties:
Penalties were imposed under Section 112 of the Customs Act, 1962, on several parties involved:
- Capt. Suran Shanmugam, Master of the Tug Century Star-1, was fined Rs. 1,00,000.
- M/s Century Star Shipping Pvt. Ltd. was fined Rs. 30,00,000.
- M/s Atlantic Shipping Pvt. Ltd. was fined Rs. 10,00,000.
- M/s B.Ghosh & Co. Pvt. Ltd. was fined Rs. 10,00,000.
- M/s Babaji Shivaram Clearing and Carriers Pvt. Ltd. was fined Rs. 2,00,000.
No penalties were imposed on other noticees (Nos. 3, 4, 6, 7, and 11).

3. Liability of Duty on the Dumb Barge Under Section 125(2) of the Customs Act, 1962:
The Department appealed, arguing that the Commissioner erred in not confirming the duty liability on the Dumb Barge Star-3002 under Section 125(2) of the Customs Act, 1962. The Department contended that the adjudicating authority should have settled the valuation issue first and then fixed the appropriate duty liability. The contention was that the barge was dutiable under Section 111(f), (g), and (h) of the Customs Act, 1962.

4. Validity of the Importation and Coastal Run Conversion of the Dumb Barge:
The Appellant, M/s Century Star Shipping Ltd., contended that the Dumb Barge was imported into India in 2006 with permission from DG-Shipping and was converted for coastal run by Customs Authorities at Paradip upon payment of duty. They argued that once a vessel is assessed to duty and cleared for home consumption, it ceases to be imported goods and becomes a foreign-going vessel, thus not liable for further customs duty for movements in and out of the country. They relied on the Tribunal's decision in the case of Noble Asset Co. Ltd. vs. CC(Prev.), which held that such vessels are not required to file an import manifest declaring the barge as goods.

Conclusion:
The Tribunal found that the facts and circumstances of the cited case were similar to the instant case and that the arguments required re-examination. It was noted that if duty had already been suffered, it could not be demanded again. The case was remanded to the Original Authority to re-examine the aspects and decide the case while keeping in view the Tribunal's decision in the case of Noble Asset Co. Ltd. Both sides were allowed to produce supporting documents, and a reasonable opportunity was to be granted to the noticees.

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