2006 (5) TMI 32 - AT - Customs

Customs Ship stores - Foreign going vessel touched two Indian ports before proceeding to foreign port Stores consumed between Visakhapatnam and Mumbai - Not entitled to refund of duty paid

Summary

Issues:
- Entitlement to refund for a steamer agent's claim.
- Determination of foreign going ship status for vessels carrying coastal cargo.
- Applicability of statutory provisions regarding consumption of stores on board vessels.
- Interpretation of Customs Act provisions related to duty payment on shipstores.
- Comparison with previous legal judgments on similar cases.

Analysis:
- The appeal involved the rejection of a refund claim by a steamer agent for two vessels, MV WORLD PROSPER and M.V DIAMOND HALO, regarding their status as foreign going ships when carrying coastal cargo. The main issue was whether the vessels maintained their foreign going ship status and were entitled to consume stores without paying customs duty during specific voyages.
- The Commissioner examined the statutory provisions of the Customs Act, 1962, particularly Sections 86 and 87, to determine the liability of duty on stores consumed on vessels in coastal runs. It was clarified that duty exemption on stores remaining on board applied only to vessels carrying foreign cargo and sailing back to a foreign port, not those in coastal runs between Indian ports.
- The Commissioner highlighted the distinction between foreign going vessels and those in coastal runs, emphasizing that duty-free consumption of stores was permissible only on foreign going vessels as per Section 87 of the Customs Act, 1962.
- The comparison with previous legal judgments, such as Collector of Customs, Visakhapatnam Vs. Shipping Corporation of India, helped establish the precedent that shipstores in similar circumstances were chargeable to duty, supporting the decision to reject the refund claim.
- Despite the appellants' non-appearance during the proceedings, the Tribunal upheld the impugned order, stating that the findings were in accordance with the law. The appeal was dismissed based on the authorities' correct assessment and lack of substantial grounds for a different decision.

This detailed analysis of the judgment showcases the thorough examination of legal provisions, precedents, and factual circumstances to determine the entitlement to refund for the steamer agent's claim and the foreign going ship status of the vessels involved in carrying coastal cargo.