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2014 (12) TMI 617 - AT - CustomsConfiscation of vessel - Redemtion fine u/s 125 - Fine and penalty - Held that - It is evident that the charge against the appellant is that they did not file IGM or Bill of Entry when the vessel first arrived at Sikka Port on 14/11/2010. Sikka port is situated in Gujarat and, therefore, offence, if any, has taken place in Gujarat. The Customs Commissioner at Bombay does not have jurisdiction over the Sikka port and, therefore, he could not have issued any show cause notice proposing confiscation and imposition of penalty in respect of an act which was committed beyond his jurisdiction. On this ground alone, the impugned order is liable to be set aside. Vessel, even if treated as goods were not liable to any Customs duty as the same was exempt from payment of duty under Notification No. 21/2002-Cus. Thus, the total duty implication was nil. Therefore, the vessel could not be considered as dutiable goods , in the light of the apex Court s decision in the case of Associated Cement Companies, cited 2001 (1) TMI 248 - Supreme court of India , and the Tribunal s decision in the case of Jay AR Enterprises (2006 (12) TMI 292 - CESTAT, CHENNAI). If the goods are not dutiable, and there is no prohibition in importing oil tankers to India, the provisions of Section 111(f) are not at all attracted. Consequently, the appellant is not liable to any penalty under Section 112(a)(b) of the Customs Act, 1962 either. - Decided in favour of assessee.
Issues: Jurisdiction of the Customs Commissioner over the Sikka port, Compliance with import formalities for vessel, Confiscation under Section 111(f) of the Customs Act, 1962, Penalty under Section 112(a) and (b) of the Act.
Jurisdictional Issue: The appeal challenged an Order-in-Original by the Commissioner of Customs, Mumbai, confiscating a vessel for non-compliance with import formalities at Sikka Port, Gujarat. The Tribunal noted that the offence, if any, occurred in Gujarat, beyond the jurisdiction of the Customs Commissioner at Bombay. Therefore, the impugned order proposing confiscation and penalty was set aside on jurisdictional grounds. Compliance with Import Formalities: The appellant, a shipping company, imported a crude oil tanker and complied with procedural formalities during its visits to Indian ports. The vessel was initially brought to India for cargo loading operations, later seeking conversion to coastal trade. Despite subsequent compliance and amendment of import documents, a show cause notice alleged non-compliance with import formalities, leading to confiscation and penalty. The appellant argued that the vessel was not 'dutiable' or 'prohibited' goods under Section 111(f) due to a customs duty exemption, rendering the penalty inapplicable. Confiscation under Section 111(f): The Tribunal analyzed the provisions of Section 111(f) of the Customs Act, 1962, which pertain to the confiscation of 'dutiable or prohibited' goods not declared in import manifests. The appellant contended that the vessel, exempt from customs duty and not prohibited for import, did not fall under the purview of Section 111(f). Citing legal precedents and a customs circular exempting certain vessels from filing import documents, the appellant argued against the confiscation of the vessel. Penalty under Section 112(a) and (b) of the Act: The appellant further challenged the penalty imposed under Sections 112(a) and (b) of the Customs Act, 1962. They relied on court decisions emphasizing that goods exempt from customs duty are not considered 'dutiable goods' subject to penalties. The Tribunal concurred, holding that since the vessel was not dutiable and no prohibition existed for its import, the penalties under Section 112(a) and (b) were unwarranted. Consequently, the impugned order was deemed legally unsustainable, and the appeal was allowed, setting aside the confiscation and penalties. This detailed analysis of the judgment highlights the issues of jurisdiction, compliance with import formalities, confiscation under Section 111(f), and penalties under Section 112(a) and (b) of the Customs Act, 1962, providing a comprehensive overview of the legal arguments and conclusions presented in the case.
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