2008 (7) TMI 207 - AT - Customs

Import of old & used barge revenue contend that the year of manufacture of the ship was 1972 as keel of the vessel was laid in 1972 whereas as builder s certificate and the surveyor s report show that the vessel was built in 1989 - there is no material on record to the contrary - therefore the importers have satisfied us that the vessel was less than 25 years old at the time of its import no contravention of licensing provisions by importers - confiscation & penalty is set aside

Summary

Issues:
Classification and exemption claim for imported vessel under Customs Act, 1962; Requirement of technical clearance for vessels over 25 years old; Confiscation of vessel under Customs Act; Imposition of penalty; Discrepancy in year of manufacture of the vessel.

Classification and Exemption Claim:
The case involved M/s. Prince Marine Transport Services importing an old and used barge into India, claiming classification under CTH 89011040 with exemption from duty. Customs authorities believed the vessel was over 25 years old, requiring prior technical clearance for import. The Ministry of Shipping had issued guidelines for vessels over 25 years old. The vessel's year of manufacture was disputed based on various certificates. The Tribunal found that the vessel was less than 25 years old, setting aside the confiscation and penalty while agreeing to enhance the vessel's value based on a surveyor's report.

Requirement of Technical Clearance:
The Ministry of Shipping guidelines required technical clearance for vessels over 25 years old before import. The vessel in question was alleged to be over 25 years old based on Seychelles certificates. Due to the lack of technical clearance, a show cause notice was issued proposing confiscation and penalty. The Tribunal found that the vessel was not over 25 years old, thus the technical clearance requirement was not contravened, leading to setting aside of confiscation and penalty.

Confiscation and Penalty:
The Commissioner had confiscated the vessel absolutely and imposed a penalty on the importer for alleged contravention of the Foreign Trade (Development and Regulation) Act, 1992. The Tribunal, upon finding that the vessel was not over 25 years old, set aside the confiscation and penalty, as the licensing provisions were not breached.

Discrepancy in Year of Manufacture:
The dispute centered around the vessel's year of manufacture, with different certificates showing varying years. The Commissioner had relied on a typing error argument regarding the year of building, but the Tribunal found that the vessel was built in 1989 based on the builder's certificate and surveyor's report. The discrepancies in port of registry did not impact the vessel's year of manufacture, leading to the Tribunal setting aside the confiscation and penalty.

This detailed analysis of the judgment covers the issues of classification and exemption claim, technical clearance requirement, confiscation and penalty, and the discrepancy in the year of manufacture of the vessel as addressed in the legal judgment by the Appellate Tribunal CESTAT MUMBAI.