2012 (11) TMI 969 - AT - Customs

Duty on stores on the vessel - vessel in this case was converted from coastal run to foreign run and it has gone to Singapore for dry docking Held that - Department could not show any discrepancy pointed out by the Customs Officer Boarding the vessel, in case of store lists - duty is not demandable on stores of Indian origin. The Appellant did not press for issue relating to inclusion of freight and insurance in the assessable value of stores of foreign origin - demand of duty on ship stores of Indian origin set aside - appeal is allowed

Summary

Issues:
- Duty assessment on ship stores of Indian origin
- Application of Imported Stores (Retention of Board) Regulations, 1963
- Inclusion of freight and insurance charges in assessable value

Duty assessment on ship stores of Indian origin:
The appeal was filed against an order confirming duty of Rs. 27,57,462 on ship stores of Indian origin. The Appellant argued that the stores were duty paid and no duty should be charged on them. The Tribunal found that the vessel was converted from coastal run to foreign run, and the stores of Indian origin were duty paid. The Department failed to show any discrepancy in the quantification of stores. It was established that the duty was not demandable on stores of Indian origin. The impugned order was set aside, and the appeal was allowed on this issue.

Application of Imported Stores (Retention of Board) Regulations, 1963:
The Department argued that the Appellant did not follow the Regulations, specifically sub-clause (b) to Clause 2, which allows certain stores to be kept on board without payment of duty. The Appellant contended that these Regulations apply to imported stores and not to stores of Indian origin. The Tribunal agreed with the Appellant, stating that the Regulations are related to imported stores and not applicable in this case. The Department's argument was dismissed, and the case was not remanded based on this issue.

Inclusion of freight and insurance charges in assessable value:
The Department raised the issue of including freight and insurance charges in the assessable value of stores of foreign origin. However, the Appellant did not press for this issue during the proceedings. The Tribunal noted that the Appellant withdrew the Miscellaneous Application filed for changing the Cause Title and did not press for the inclusion of freight and insurance charges. Therefore, this issue was not further addressed in the judgment.

In conclusion, the Tribunal ruled in favor of the Appellant regarding the duty assessment on ship stores of Indian origin, stating that no duty was demandable on those stores. The Regulations regarding imported stores were found not applicable to stores of Indian origin. The issue of inclusion of freight and insurance charges in the assessable value was not pursued by the Appellant, leading to no further discussion on this matter. The impugned order was set aside to the extent of the duty demand on ship stores of Indian origin, and the appeal was allowed on that specific issue.