2016 (12) TMI 1207 - AT - Customs

Release of confiscated vessel - MV Seamec II - MV Seamec III - permission to take MV Seamec III out of the country for undertaking a project to offset heavy expenditure incurred to maintain the vessel in idle condition - release of vessel on same terms as offered earlier - Held that - We do not wish to deprive the appellant of an opportunity to deploy an asset for performance but safeguard of public revenue is our paramount concern. Undoubtedly, the retention of the vessel in idle condition does not serve anybody s interest and may well accelerate its deterioration - the plea of the appellant for release on terms similar to that on the earlier occasion may not be appropriate. The appellant to execute bank guarantee of ₹ 3,00,00,000/- in addition to existing bank guarantee of ₹ 8.12 corers for MV Seamec - II to approximate the redemption fine of ₹ 12,00,00,000/-, the interest of justice will be advanced by allowing the MV Seamec - III to be taken out for commercial purpose and dry docking for a period of six months upon execution of bank guarantee of ₹ 7,00,00,000/- in favour of Commissioner of Customs, Mumbai and bond for value of the vessel - appeal allowed - decided partly in favor of appellant.

Issues:
1. Permission to take the vessel out of the country for a project.
2. Confiscation of the vessel, redemption fine, and penalty under section 114A of the Customs Act, 1962.
3. Previous instances of taking the vessel out for repair and commercial purposes.
4. Consideration of bank guarantees for release of the vessel.
5. Public revenue safeguard and appellant's plea for release.

Issue 1: Permission to take the vessel out of the country for a project.
The appellant, M/s Seamec Ltd, sought permission to take the vessel "MV Seamec III" out of the country for a project in Dubai. The vessel required dry docking as per statutory regulations, and the appellant highlighted the need to offset maintenance costs by undertaking the project. The Tribunal considered previous instances of allowing such deployments and the vessel's history of investigation for wrong classification and non-inclusion of repair values in assessable value.

Issue 2: Confiscation of the vessel, redemption fine, and penalty under section 114A of the Customs Act, 1962.
The vessel was confiscated in 2013, with a redemption fine imposed and penalty under section 114A of the Customs Act, 1962. The appellant had not exercised the option to redeem the vessel since confiscation, and previous stay applications were disposed of without granting a stay. The Tribunal noted the history of allowing the vessel to be taken out for repairs and commercial purposes, with varying bank guarantee amounts.

Issue 3: Previous instances of taking the vessel out for repair and commercial purposes.
The Tribunal reviewed past instances where the vessel was allowed to be taken out for dry dock, repairs, and commercial undertakings. Different bank guarantee amounts were imposed based on the purpose of the vessel's deployment, with a focus on safeguarding public revenue while balancing the appellant's need to utilize the asset effectively.

Issue 4: Consideration of bank guarantees for release of the vessel.
In assessing the appellant's request for release, the Tribunal considered the necessity of bank guarantees to secure public revenue interests. Previous orders regarding bank guarantees for similar vessels were referenced to determine the appropriate value for the bank guarantee required for the release of the vessel "MV Seamec III" for a commercial purpose and dry docking.

Issue 5: Public revenue safeguard and appellant's plea for release.
While acknowledging the appellant's need to deploy the asset for performance, the Tribunal prioritized safeguarding public revenue. The appellant's pre-deposit towards duty liability was considered, and the Tribunal decided to allow the release of the vessel for a period of six months for commercial purposes and dry docking upon the execution of a specified bank guarantee and bond to ensure the interest of justice and public revenue protection.

This detailed analysis of the judgment addresses the issues involved comprehensively, outlining the Tribunal's considerations and decisions regarding the appellant's request for permission to take the vessel out of the country, the vessel's confiscation, redemption fine, bank guarantees, and public revenue safeguarding.

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