2007 (12) TMI 63 - AT - Customs

Seeking refund of the duty paid on ship stores permitted from CBEC & DG to operate the vessel as coastal - even if appellant never run the vessel as coastal vessel though the vessel was converted from a foreign run vessel to a coastal run vessel and therefore the duty paid on stores consumed is not refundable - ship stores and bunkers are exempted from payment of duty only in respect of a foreign going vessel. Therefore refund claim has been rejected rightly

Summary

Issues:
- Appeal against the Commissioner (Appeals) order regarding the refund of duty paid on ship stores.
- Whether the vessel was eligible for duty free consumption and entitled to a refund claim.

Analysis:
The case involved an appeal against the Commissioner (Appeals) order regarding the refund of duty paid on ship stores. The appellant's vessel arrived in ballast at an Indian port and subsequently filed a bill of entry for the stores and bunkers on board. The duty on stores consumed was paid, and a claim for refund was submitted later. The Original Authority held that the vessel had been converted to a coastal run vessel, making the duty paid on stores non-refundable. The Commissioner (Appeals) upheld this decision.

During the proceedings, the appellant argued that the vessel remained a foreign run vessel, despite seeking permission for coastal operations. The appellant claimed that they never operated the vessel as a coastal vessel and thus, the ship stores should be eligible for duty-free consumption and a refund claim. The appellant's advocate presented this argument, while the Senior Departmental Representative reiterated the Commissioner (Appeals) findings.

The Tribunal carefully considered both sides' submissions. It noted that the vessel arrived in ballast without commercial cargo or passengers, intended for transshipment operations from outer anchorage to the port area. Despite obtaining permission for coastal operations from the Central Board of Excise and Customs (CBEC) and the Directorate General of Shipping (DG Shipping), the vessel did not engage in carrying goods or passengers during its stay in India. As a result, the Tribunal concluded that the vessel's status during its stay in the Indian port could only be considered as that of a coastal vessel, not a foreign-going vessel.

Since ship stores and bunkers are exempted from duty only for foreign-going vessels, the Tribunal rejected the appeal. The judgment was pronounced on 6-12-2007 by the Tribunal.