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Issues Involved:
1. Whether the import of goods such as spares, spare parts, other equipment, and fuel ("spares" for short) and transhipment thereof for being used on Oil Rigs carrying on operations in the designated areas be allowed to be consumed as stores thereon, without payment of customs duty, treating it as a foreign-going vessel? Summary of Judgment: Issue 1: Whether the Oil Rig is a vessel and a foreign-going vessel: - The petitioner argued that the Oil Rig should be considered a vessel and a "foreign going vessel" u/s 2(21)(ii) of the Customs Act, as it operates outside the territorial waters of India. They relied on previous judgments, such as Amership Management v. Union of India and Jindal Drilling & Industries Ltd. v. Union of India, to support their claim that Oil Rigs are vessels and should not be subject to customs duty for imported stores. - The respondents contended that the Oil Rig operates within designated areas defined by notifications under the Maritime Zones Act, 1976, and therefore, the Customs Act and Customs Tariff Act apply to these areas, making the Oil Rig liable for customs duty. Issue 2: The applicability of Sections 53 and 54 of the Customs Act: - The petitioner argued that u/s 53 and 54 of the Customs Act, goods imported for transit to a place outside India should not be liable for customs duty. They claimed that the Oil Rig operates outside the territorial waters of India, and thus, the goods should be considered in transit. - The court analyzed the definitions and provisions under the Maritime Zones Act, 1976, and the Customs Act, 1962. It concluded that the designated areas in the Continental Shelf and Exclusive Economic Zone are deemed to be part of India for the purposes of the Customs Act, due to notifications extending the Act to these areas. Issue 3: The interpretation of "foreign-going vessel": - The court held that the Oil Rig operating in the designated areas is not a "foreign-going vessel" u/s 2(21) of the Customs Act, as these areas are deemed to be part of India. Thus, the Oil Rig does not qualify for the benefits of Sections 86 and 87 of the Customs Act, which allow stores on foreign-going vessels to be consumed without payment of duty. Conclusion: - The court dismissed the petition, holding that the respondents were justified in refusing to permit the petitioner to clear ship stores and spares for use on the Oil Rig without payment of customs duty while the Oil Rig is in a designated area. The court also held that the continental shelf and the exclusive economic zone are parts of India for the purposes of the Customs Act, as extended by the Maritime Zones Act, 1976. Consequently, the Oil Rigs proceeding to or operating in these areas are not foreign-going vessels under the Customs Act. - The bonds executed by the petitioner for obtaining clearances of goods/stores without payment of customs duty are liable to be enforced, and the respondents are at liberty to recover the customs duty from the petitioner.
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