1976 (5) TMI 20 - HC - Customs

Summary

Issues Involved:
The judgment involves the interpretation of the term "foreign going vessel" under Section 2(21) of the Customs Act and the applicability of Customs duties on stores consumed by a vessel engaged in the carriage of goods between ports in India.

Details of the Judgment:

Issue 1: Interpretation of "foreign going vessel" under Section 2(21) of the Customs Act
The appellant contended that the vessel in question, 'Nancy Dee', was a 'Daughter Vessel' engaged in the carriage of goods between a port outside India and a port in India, making it a 'foreign going vessel' exempt from Customs duties on fuel and stores consumed. The Customs authorities demanded duty payment for stores consumed by 'Nancy Dee' between January 4, 1970, and February 23, 1970.
The Court analyzed the conditions of Section 2(21), emphasizing that the vessel must be engaged in the carriage of goods or passengers between a foreign port and an Indian port, without specifying that only one vessel must undertake the entire journey. It concluded that 'Nancy Dee' was indeed a 'foreign going vessel' during the mentioned period as it participated in completing the journey of imported goods from a foreign port to an Indian port, Paradip or Kidderpore Docks.

Issue 2: Applicability of Customs Duties on Stores Consumed by 'Nancy Dee'
The Court found the demand for duty on stores consumed by 'Nancy Dee' during the specified period to be unreasonable. It highlighted that the vessel's role in carrying goods between a port outside India and a port in India qualified it as a 'foreign going vessel,' exempt from such duties. Consequently, the demand letters from the Customs authorities were set aside, and the appellant was released from their guarantee. The money held by Customs authorities was ordered to be refunded to the appellant.

Conclusion:
The appeal was allowed, the judgment and order under appeal were reversed, and the rule nisi was made absolute. A Writ in the nature of Mandamus was issued to cancel the demand orders, and the appellant was relieved from the guarantee. The prayer for interim stay was refused, and no order as to costs was made.