1987 (10) TMI 69 - HC - Customs

Ocean-going vessel- Transhippers - Predominant or primary use determining factor - Bill of Entry

Issues Involved:

1. Validity of directives and orders issued by Customs Authorities.
2. Requirement to file a Bill of Entry under Section 46 of the Customs Act, 1962.
3. Exemption from customs duty under Notification No. 262 of 1958 and Notification No. 133 of 1987.
4. Assessment and quantification of customs duty.
5. Alleged discrimination under Article 14 of the Constitution.
6. Levy of additional or auxiliary duty.
7. Assessment of wreck to duty.

Detailed Analysis:

1. Validity of Directives and Orders Issued by Customs Authorities:

The petitioners challenged the validity of directives and orders issued by the Customs Authorities through letters dated 26th March and 10th April 1987, and orders dated 26th, 31st March, and 9th April 1987. The petitioners sought a Mandamus directing the second respondent to withdraw these directives and orders, assess the wreck of the 'S.S. Maratha Transhipper' to duty on the assumption that the vessel is not exigible to duty, and to forbear from levying any customs duty as well as additional or auxiliary duty.

2. Requirement to File a Bill of Entry Under Section 46 of the Customs Act, 1962:

The petitioners contended that the 'S.S. Maratha Transhipper' was exempt from filing a Bill of Entry as it was an ocean-going vessel under Notification No. 262 of 1958. However, the Division Bench held that a Bill of Entry was required to be filed, and this was affirmed by the Supreme Court, which stated that the vessel had been imported for "home consumption" within the meaning of Section 46 of the Customs Act.

3. Exemption from Customs Duty Under Notification No. 262 of 1958 and Notification No. 133 of 1987:

The Supreme Court had already determined that the 'S.S. Maratha Transhipper' was not an ocean-going vessel and thus not exempt from customs duty under Notification No. 262 of 1958. The petitioners later claimed exemption under Notification No. 133 of 1987, which was in force at the time of the filing of the Bill of Entry on 20th March 1987. However, the court held that the Bill of Entry filed on 12th March 1987 was valid and acted upon, and the exemption under Notification No. 133 of 1987 was not applicable as the vessel was being broken up.

4. Assessment and Quantification of Customs Duty:

The court held that the Bill of Entry filed on 12th March 1987 was valid and that the assessment of duty was to be made based on the rate prevailing on that date. The petitioners' contention that the Bill of Entry filed on 20th March 1987 should be considered was rejected. The court also noted that the Customs Authorities acted upon the Bill of Entry filed on 12th March 1987 and directed the petitioners to file the Bill of Entry in the correct format.

5. Alleged Discrimination Under Article 14 of the Constitution:

The petitioners alleged discrimination vis-a-vis M/s. Dempo & Co. Pvt. Ltd., who were granted exemption under Notification No. 133 of 1987. The court found that M/s. Dempo & Co. filed their Bill of Entry after the Notification No. 133 of 1987 became operative and specifically claimed the exemption. The petitioners, on the other hand, filed their Bill of Entry before the notification came into force and did not claim the exemption initially. Thus, the court held that there was no discrimination.

6. Levy of Additional or Auxiliary Duty:

The petitioners argued that no additional or auxiliary duty could be levied as such duties were not in force at the time of the import of the vessel. The court held that the issue of liability to pay additional or auxiliary duty could be raised by the petitioners before the final assessment order was passed, as the assessment done was provisional.

7. Assessment of Wreck to Duty:

The petitioners contended that if the vessel was exempt from customs duty, no duty would be payable on the wreck. The court found that the petitioners' claim was solely to secure the implementation of the agreement with M/s. Interdive (Goa) regarding the payment of customs duty on the wreck. The court held that no assessment to duty could be made on the materials removed from the wreck, and the basis of the petition was unsound.

Conclusion:

Both writ petitions were dismissed. The court held that the 'S.S. Maratha Transhipper' was chargeable to duty and that the assessment was to be made based on the rate prevailing on the date of the presentation of the Bill of Entry on 12th March 1987. The interim order dated 13th April 1987 was vacated, and the assessment made pursuant to that order was not to be acted upon. The petitioners were directed to deposit the amount of Rs. 25,69,822.19 and provide a bank guarantee for the remainder of the assessed duty within four weeks.

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