2016 (11) TMI 1269 - AT - Customs

Confiscation of imported ship - Import of ship in violation of ITC provisions - the appellant vide letter dated 20.09.2004 requested the revenue to allow the said vessel to be scrapped and broken, and sought permission to file a bill of entry for this purpose. Since Marmagoa port, where the bill of entry was filed, was not designated port for braking up of ships, the revenue rejected the application for such conversion and adjudged the issue as per ITC provisions - Held that - Proviso to the said section clearly indicates that the importer can waive the show-cause notice. In the instant case the importer has waived the show-cause notice, therefore, it is not necessary that a show-cause notice be issued before confiscation. It is seen that the motor tanker imported by appellants is powered by 2000BHP engine. In this circumstance, it cannot be said that the said motor tanker is not navigable. In the instant case the engine have been found not in working condition therefore, appellant had obtained a permission to tow the tanker from Marmagoa to Alang - It can be seen from the definition that the term vessel includes any ship, boat, sailing vessel or other description of vessel used in navigation. Motor tanker would be covered in the definition of vessel - appeal dismissed - decided against appellant.

Summary

Issues:
1. Confiscation of imported ship for violation of ITC provisions.
2. Requirement of show-cause notice for confiscation.
3. Classification of motor tanker as a vessel under ITC Policy.

Analysis:
1. The case involved the import of a motor tanker by the appellants, which led to a demand for technical clearance due to the vessel's age exceeding 25 years. The revenue rejected the application for conversion to scrap the vessel, leading to confiscation under ITC provisions by the Commissioner of Customs. The appellant challenged this decision before the Tribunal.

2. The appellant argued that no show-cause notice was issued before confiscation, citing Section 124 of the Customs Act, 1962. The appellant contended that even if they waived the notice, confiscation without it is impermissible. However, the Tribunal noted that the importer had indeed waived the show-cause notice, as allowed under the proviso to Section 124, making the notice unnecessary in this case.

3. Another issue raised was whether the motor tanker imported could be classified as a vessel under the ITC Policy. The appellant claimed it was not a vessel as it was not navigable. However, the Tribunal examined the description in the bill of entry, which classified the motor tanker under "Cruise ships, excursion boats, cargo ships, barges and similar vessels for the transport of persons or goods." The vessel was powered by a 2000BHP engine, making it navigable. Additionally, the definition of "vessel" under the Merchant Shipping Act, 1958, supported the classification of a motor tanker as a vessel. Consequently, the Tribunal dismissed the appeal based on these findings.

In conclusion, the Tribunal upheld the confiscation of the imported ship for violating ITC provisions, clarified the waiver of show-cause notice by the importer, and determined that the motor tanker qualified as a vessel under the ITC Policy. The decision was based on a thorough analysis of the legal provisions and definitions relevant to the case, leading to the dismissal of the appeal.