2014 (11) TMI 24 - AT - Customs

Release of confiscated vessel - redemption fine - Held that - As the stay order was granted by this Tribunal on 25.06.2013 on the understanding that the vessel shall be remained in Indian water or the same can be redeemed on payment of redemption fine of ₹ 7 crore but relaxation was given to the applicant on execution of bank guarantee of ₹ 60,00,000/- for repair purpose only. Now the applicant wants to take the vessel outside Indian Territory for the commercial purpose. Considering the fact that the differential duty is around ₹ 6 crore which is in dispute therefore, for fair consideration of the request of the applicant and to safeguard the interest of the Revenue, we direct the applicant to execute a bank guarantee of ₹ 3 crore in favour of the Commissioner of Customs (Imports), New Customs House, Mumbai. On such execution of bank guarantee of ₹ 3 crore, the learner Commissioner shall allow the vessel to take outside territory of India for six months from the date of export. - Decided partly in favour of Assessee.

Summary

Issues:
1. Early hearing application dismissed as infructuous.
2. Classification dispute of vessel under CTH 8901 or CTH 8905 9090.
3. Duty demand, redemption fine, and penalty imposed on the applicant.
4. Tribunal's stay order and conditions for executing a bank guarantee.
5. Applicant's request to take the vessel outside India for commercial purpose.

Analysis:
1. The judgment begins with the dismissal of the early hearing application by the applicant as it became infructuous since the miscellaneous application was listed and considered on the same day.
2. The applicant filed a miscellaneous application to direct the respondent to permit taking the vessel out of India for operational purposes, which arose due to a classification dispute. The applicant classified the vessel under CTH 8901, while the Revenue argued for classification under CTH 8905 9090.
3. The case involved a duty demand of &8377; 10,86,40,641/- along with interest, leading to the confiscation of the vessel and imposition of a redemption fine of &8377; 7,00,00,000/- and a penalty of &8377; 10,86,40,641/- on the applicant. The Tribunal granted a waiver of pre-deposit for the balance amount based on a stay order, allowing the applicant to execute a bank guarantee for repair purposes.
4. The Tribunal directed the applicant to execute a bank guarantee of &8377; 3 crore in favor of the Commissioner of Customs to take the vessel outside Indian territory for six months from the date of export, considering the ongoing dispute over the differential duty amount.
5. The judgment concluded by ordering the issuance of a copy of the order and highlighted the conditions for executing the bank guarantee to allow the vessel's temporary export for commercial purposes.