2008 (2) TMI 353 - AT - Customs

Barges were sold without debonding and without permission by proper officer - confiscation of the barges penalty - Since, the barges have been cleared from the Mumbai Port without filing the bills of entry and without completion of other formalities, and barges being restricted item as per the policy, the whole process of sale of the barges is ab initio void penalty for contravention of the provisions of Section 111(d) and (j) ibid, is justified redemption fine is also imposable

Summary

Issues Involved:
1. Confiscation of barges.
2. Imposition of penalties on the appellants.
3. Compliance with provisions of the Customs Act, 1962.
4. Applicability of various notifications and exemptions.
5. Jurisdiction of customs authorities.

Detailed Analysis:

1. Confiscation of Barges:
The core issue was whether the imported barges were liable to confiscation under the Customs Act, 1962. The appellants, M/s. Bedi Shipping Ltd., purchased four barges from M/s. DOSA, which were initially brought into India under a re-export bond. The appellants removed these barges from Mumbai Port without proper customs clearances, violating Sections 42, 45, 46, and 47 of the Customs Act. The Tribunal upheld the confiscation of the barges, noting that they were towed away without the necessary permissions and customs procedures, thus breaching the conditions of the re-export bond and the Customs Act.

2. Imposition of Penalties:
Penalties were imposed on M/s. DOSA, M/s. Bedi Shipping Ltd., and its director under Section 112 of the Customs Act for contravening Sections 111(d) and (j). The Tribunal upheld these penalties, emphasizing that the appellants' actions demonstrated mala fide intentions by circumventing customs laws and procedures. The penalties included a redemption fine of Rs. 20 lakhs on M/s. DOSA, and additional penalties on M/s. DOSA, M/s. Bedi Shipping Ltd., and its director.

3. Compliance with Provisions of the Customs Act, 1962:
The Tribunal found that the appellants failed to comply with the necessary customs procedures. They did not file proper bills of entry at Mumbai Port and removed the barges without the permission of the proper officer. The Tribunal highlighted that the customs formalities needed to be completed at the port of importation (Mumbai) and not at any other port (Jamnagar or Muldwarka). The appellants' failure to follow these procedures led to the confiscation and penalties.

4. Applicability of Various Notifications and Exemptions:
The appellants argued that the barges were exempt from duty under Notifications 302/76, 133/87, and 36/96. However, the Tribunal rejected these claims, noting that the exemptions were not applicable as the barges were meant for re-export and were still under bond. The Tribunal also pointed out that the notifications were not in force at the relevant times, and the appellants did not fulfill the conditions required for these exemptions.

5. Jurisdiction of Customs Authorities:
The Tribunal clarified that the proper officer for customs clearance was the officer at the port of importation (Mumbai). The actions taken by customs officers at Jamnagar and Muldwarka were not valid as they were not the proper officers under the Customs Act. The Tribunal emphasized that the entire cause of action arose within the jurisdiction of Mumbai Customs, and any customs formalities completed at other ports were without jurisdiction and invalid.

Conclusion:
The Tribunal upheld the order of confiscation of the barges and the imposition of penalties on the appellants. It found that the appellants had violated multiple provisions of the Customs Act, 1962, by removing the barges without proper clearances and failing to comply with customs procedures. The Tribunal also rejected the appellants' claims for exemptions under various notifications, emphasizing that these were not applicable in the given circumstances. The appeals were dismissed, and the order of the Commissioner was upheld.