1987 (2) TMI 62 - SC - Customs

Whether the vessels are goods brought into India for home consumption? Whether a transhipper is an ocean-going vessel? Held that - It may be that in Section 46(2) and elsewhere the word goods is used in such a way as not to include and as contradistinguished from the conveyances in which the goods are carried, depending upon the context. But that does not mean that despite the definition, the word is never to be understood as defined and that it should always be interpreted as never to include vessels, aircraft and vehicles even when there is nothing in the context justifying their exclusion. We can see no justification for holding that a vessel is not goods for the purposes of Section 46(1). For the purpose of the levy of Customs Duty, in order to determine whether any imported goods are goods for home consumption , we have to find out the primary intended use of the goods when the goods are brought into Indian territorial waters. If the goods are intended to be primarily used in India, they are goods for home consumption notwithstanding that they may also be used for the same or other purposes outside India. We guard ourselves against saying that the converse may be true. The question whether goods not intended to be primarily used in India but used occasionally for short periods in India also fall within the meaning of the expression goods for home consumption has not been examined by us. We have only considered the question whether goods brought into India for use primarily in India are goods for home consumption notwithstanding that they are occasionally or incidentally used outside India. We are of the view that they are. The vessels, in these two cases, were brought into India to be used primarily as Transhippers at Mormugao, though used incidentally or occasionally to go into the open sea. They are, therefore, goods for home consumption and not ocean-going vessels for the purposes of the Customs Act. After their conversion they were no longer ocean-going vessels, in the full sense of the term that is in the sense that their pre-dominant purpose was use as ships traversing the open seas. It was, therefore, necessary to present Bill of Entry in respect of both the vessels. Appeal dismissed.

Summary

Issues Involved:
1. Whether a vessel is considered "goods" under Section 46(1) of the Customs Act.
2. Whether the vessels in question, primarily used as transhippers, are "goods for home consumption."
3. Whether the requirement to file a Bill of Entry applies to these vessels.

Detailed Analysis:

1. Whether a vessel is considered "goods" under Section 46(1) of the Customs Act:
The court examined the definition of "goods" under Section 2(22) of the Customs Act, which includes vessels, aircraft, and vehicles. The appellants contended that the scheme of Chapters VI and VII of the Customs Act implied that a vessel should not be considered "goods" for the purposes of Section 46(1). However, the court rejected this argument, stating that the inclusive definition in a taxing statute must be given effect to. The court emphasized that Section 46(1) is the prelude to the levy of duty, and therefore, vessels, aircraft, and vehicles must be considered "goods" for the purposes of this section. The court concluded that excluding vessels from the definition of "goods" would lead to anomalous results and would be contrary to the legislative intent.

2. Whether the vessels in question, primarily used as transhippers, are "goods for home consumption":
The court considered whether the vessels, which were converted into transhippers for topping up operations within Indian territorial waters, could be classified as "goods for home consumption." The court noted that both vessels were structurally and technically competent to go on the high seas and were occasionally used for ocean-going purposes. However, the primary purpose for which they were imported and licensed was for topping up operations in Indian territorial waters. The court held that for the purpose of levying customs duty, the primary intended use of the goods when brought into Indian territorial waters is determinative. Since the primary use of the vessels was for topping up operations within India, they were considered "goods for home consumption."

3. Whether the requirement to file a Bill of Entry applies to these vessels:
Given that the vessels were classified as "goods for home consumption," the court held that it was necessary to present a Bill of Entry under Section 46(1) of the Customs Act. The court dismissed the appellants' argument that the consistent practice of the Customs Authorities not to insist on Bills of Entry for ocean-going vessels should apply in this case. The court distinguished between ocean-going vessels primarily used for traversing the open seas and the transhippers in question, which were primarily intended for use within Indian territorial waters. Consequently, the requirement to file a Bill of Entry was upheld.

Conclusion:
The Supreme Court dismissed both appeals, holding that the vessels in question were "goods" under Section 46(1) of the Customs Act, were "goods for home consumption," and were therefore required to file a Bill of Entry. The court emphasized the primary intended use of the vessels within Indian territorial waters as the basis for its decision.