2022 (12) TMI 1067 - AT - Customs

Confiscation of imported goods - vessel - whether MEA S.O. 2158(E) dated 20.06.2016 prohibited the subject vessel imported for breaking purpose? - case of the department is that S.O. dated 20.06.2016 is issued in order to implement the UNSC resolutions and prohibited the subject vessel for entry into India and since it is imported contrary to the said S.O. dated 20.06.2016; the same was liable for confiscation under section 111 (d) of the Act. HELD THAT - It can be seen that the S.O. only provides for enabling provisions for the purpose of prevention of the designated vessels for entry into Indian Port. In exercise of such powers, and to give effect to S.O. subject vessel could have been notified as prohibited for imports or to say least the entry could have been prevented by executive action in exercise of powers under the S.O. It, however, appears that no such steps appear to have been taken to give effect to the said S.O. for prevention of entry of vessel which was granted entry by various concerned authorities and it was only when the vessel was part-broken; the same was placed under seizure by the officers of DRI. In absence of any mechanism or modalities framed viz. to bring prohibition in force or notification issued under section 11 of the Act; Section 111(d) of the Act cannot be pressed into service particularly when the S.O. dated 20.06.2016 by itself does not expressly prohibit the entry of the vessel. It can be seen that the S.O. dated 20.06.2016 applied to the resolutions upto 2214 (2015) adopted by the Security Council of the United Nations as provided in para 2(1)(a) of the said S.O. The base resolution 2146 (2014) provides for its termination one year from the date of adoption unless extended. The said base resolution dated 19.03.2014 was set to expire on 19.03.2015 unless extended. On 27.03.2015 the said base resolution 2146 was extended till 31.03.2016 by resolution 2213(2015), and further extended upto 31.07.2017 by resolution 2278(2016) - the subject vessel even when designated by committee, was entered into India for the breaking/recycling purposes only and it is nobody s case that when it entered India, it carried crude oil, petroleum etc loaded from Libya; as per the perusal of the available records, it is not disputed fact that the vessel was, after due clearances from UAE port authorities, brought to India without cargo for breaking/recycling purposes on 10/14.02.2018; during that period and for the said purpose, there appears to be no contravention of any UNSC resolutions in force. In view of above, the case of the department in the impugned order that the subject vessel was prohibited for importation cannot be sustained. The issue of mis-declaration before the customs, upon perusal of available records, it appears that IMO 8900878 of the vessel is correctly mentioned in the Bill of Entry, further, name of the vessel at the time of filing bill of entry was MT Capricorn as can be seen from the certificate of ownership dated 12.02.2018 issued by Maritime Administration of Union of Comoros. In the circumstances, there is no sufficient material to substantiate the case of mis-statement much less any such acts wilfully done by the appellants. In any event, since the vessel cannot be said to have been imported contrary to any prohibition in force, redemption fine and penalties upon the appellants imposed by the impugned order are liable to be set aside. Appeal allowed.

Summary

Issues:
1. Interpretation of MEA S.O. 2158(E) dated 20.06.2016 regarding the prohibition of a vessel for breaking purposes.
2. Application of Section 111(d) of the Customs Act, 1962 for confiscation.
3. Allegations of mis-declaration before customs.

Analysis:
1. The main issue in this case was whether the MEA S.O. 2158(E) dated 20.06.2016 prohibited the subject vessel imported for breaking purposes. The Tribunal analyzed the relevant provisions of the S.O. and concluded that it only provided enabling provisions for the prevention of designated vessels from entering Indian ports. Since no steps were taken to notify the vessel as prohibited or prevent its entry, the Tribunal held that Section 111(d) of the Act could not be applied as the S.O. did not expressly prohibit the vessel's entry. The Tribunal found that the Commissioner erred in interpreting the S.O. and ruled in favor of the appellants.

2. The Tribunal also examined the application of Section 111(d) of the Customs Act, 1962 for confiscation. It noted that the S.O. dated 20.06.2016 was applicable only up to a certain date and subsequent resolutions narrowed down the scope to vessels loading, transporting, or discharging petroleum from Libya. Since the subject vessel was imported for breaking purposes without carrying such cargo, the Tribunal held that the vessel's entry did not contravene any UNSC resolutions in force. Therefore, the department's contention that the vessel was prohibited for importation was not sustained, and the impugned order was set aside.

3. Regarding the issue of mis-declaration before customs, the Tribunal found that the IMO number of the vessel was correctly mentioned in the Bill of Entry, and the name of the vessel matched the certificate of ownership issued by the Maritime Administration. There was no sufficient material to substantiate the case of mis-statement by the appellants. As the vessel was not imported contrary to any prohibition in force, the redemption fine and penalties imposed by the impugned order were set aside, and the appeals of the appellants were allowed with consequential relief.

This detailed analysis of the judgment highlights the key legal interpretations and conclusions reached by the Tribunal in addressing the issues raised in the case.