2009 (4) TMI 117 - AT - Customs

Transshipment of goods nature of goods ship sotres or otherwise - As per Section 87 of the Act any imported ship stores on board a vessel or aircraft could be consumed during the period the vessel or aircraft is a foreign going vessel or aircraft. As per Section 86 of the Act any ship stores imported in a vessel or aircraft may, with the permission of the proper officer, be transferred to any vessel or any aircraft as stores for consumption therein. In terms of the provisions of these two sections imported ship stores on board and aircraft or vessel could be transferred without payment of duty to another vessel or aircraft on foreign run without payment of duty with the permission of the proper officer order of confiscation vacated penalties set aside

Summary

Issues:
1. Confiscation of imported equipment for use on a dredger
2. Imposition of penalty on the importer
3. Consideration of imported goods as ship stores
4. Application of Sections 86 and 87 of the Customs Act, 1962
5. Requirement of IEC code for import clearance
6. Misdeclaration of goods classification

Analysis:
1. The case involved the confiscation of equipment imported for use on a dredger and the imposition of a penalty on the importer. The Tribunal had remanded the matter previously as the adjudicating authority did not consider the plea that the goods were ship stores and the request for transshipment. The Commissioner had denied transshipment, stating the equipment was not ship stores under Section 2(38) of the Act. The importer did not possess an IEC code, leading to confiscation and a penalty. The Tribunal found that the goods were imported for use on a dredger, allowing their transfer without duty payment under Sections 86 and 87 of the Act.

2. The Tribunal considered the provisions of Sections 86 and 87 of the Customs Act, 1962, which allow for the transfer of imported ship stores without duty payment. The Tribunal referred to previous decisions where dredgers were considered ocean-going vessels, supporting the transfer of goods to the dredger without duty payment. The Tribunal concluded that the importer did not need to file a Bill of Entry for clearing the equipment under Sections 86 and 87 and that the importer's correct declaration of the goods' description made the charge of misdeclaration unsustainable.

3. The Tribunal held that the imported equipment could be transferred to the dredger without duty payment, as it was considered ship stores for use on the dredger. The Tribunal vacated the order of confiscation based on the finding that the import did not require an IEC code and that the goods' description was correctly declared. Consequently, the penalty imposed on the importer was set aside.

4. In conclusion, the Tribunal allowed the appeal, overturning the order of confiscation and penalty imposition. The decision highlighted the application of Sections 86 and 87 of the Customs Act, 1962, in allowing the transfer of imported ship stores without duty payment for use on a dredger, emphasizing the correct declaration of goods and the absence of the requirement for an IEC code for such imports.