2015 (12) TMI 479 - SC - Customs

Import of Barge - Claim of exemption under Notification 20/99-CUS 28.02.1999 classifying under Chapter Heading 8901.90 - no declaration in respect of diving equipments was made - Held that - It is not even necessary to go into the question raised, viz., whether the aforesaid diving equipments could be treated as part of Stores under Section 2(38) of the Act. The reason for saying so is that in the instant case, the barge was brought with diving equipments welded onto the barge when that arrived at Sikka port in India. The diving equipment remained welded to the barge and was only used insofar as the barge is concerned which was to be used at Sikka port. It was granted exemption and barge was working in Sikka port from 27.12.1998 to 27.08.1999 and thereafter, went back to Abu Dhabi (UAE) with diving equipments which remained welded on to the barge. - issuance of Show Cause Notice was uncalled for - Decided against Revenue.

Summary

Issues:
1. Classification of barge under Chapter Heading 8901.90 and exemption claimed under Notification 20/99-CUS 28.02.1999.
2. Allegation of suppression of facts regarding diving equipments.
3. Confiscation of diving equipments under Section 111(d)(f) and (i) of the Customs Act, 1962.
4. Appeal against the Order-in-Original dated 22.06.2000.
5. Interpretation of the definition of 'Stores' under Section 2(38) of the Act.
6. Dismissal of the appeal by the High Court.
7. Challenge to the High Court's judgment.

Analysis:
1. The respondents imported a barge into India with diving equipment welded onto it in Abu Dhabi for project work. The barge was classified under Chapter Heading 8901.90, and exemption was claimed under Notification 20/99-CUS 28.02.1999. However, a Show Cause Notice was issued by the Deputy Commissioner of Customs alleging suppression of facts regarding the diving equipments.

2. The Commissioner charged the respondents with suppression of facts and extended the period of limitation, stating that the diving equipments were liable for duty payment and confiscation under Section 111(d)(f) and (i) of the Customs Act, 1962. The Order-in-Original confirming the demand was passed on 22.06.2000, leading the respondents to file an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

3. The CESTAT allowed the appeal, holding that the diving equipment used in the vessel should be considered as part of 'Stores' under Section 2(38) of the Act. It emphasized that the definition of 'Stores' does not require ownership boundaries to be relevant, focusing on the usage in a vessel rather than ownership. The Department appealed against this decision, which was dismissed by the High Court on the grounds that no question of law arose.

4. The Department challenged the High Court's judgment, leading to the present appeal before the Supreme Court. Upon reviewing the facts, the Supreme Court found that the diving equipment welded onto the barge was used solely for the barge's operation in Sikka port, exempting it from duty payment. The Court dismissed the appeal, stating that the Show Cause Notice was unnecessary in this context, leaving the question of the diving equipment's classification as 'Stores' under Section 2(38) open for future consideration.