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Issues: Dispute over confiscated goods imported for supplying as ship stores to ONGC's drilling rigs, including unloading at an unauthorized place, duty demand, interest on duty, valuation of goods, rate of duty applicability.
In the present case, the dispute revolved around goods imported for supplying as ship stores to ONGC's drilling rigs, which were confiscated with a redemption fine and a duty demand of over Rs. 10 lakhs due to being unloaded at an unauthorized place, Nhava base. The appellant argued that the goods were intended for ship stores and had been consistently unloaded at Nhava base with the Customs Authorities' knowledge, thus claiming no deliberate intent to evade customs duty. The Commissioner acknowledged this practice as well. The appellant contended that no duty was payable for ship stores and challenged the inflated valuation of the goods, advocating for the application of a specific duty rate. On the other hand, the Revenue argued that the decision on treating the goods as ship stores should be left to the Customs Authorities and supported the confiscation due to the unauthorized unloading location. Upon reviewing the records and submissions, the Tribunal acknowledged that the goods were indeed imported for supplying as ship stores to offshore oil rigs, with Nhava base historically used for such purposes. Given this historical context and the acknowledgment by the Commissioner, the Tribunal found no justification for the confiscation of the goods and set it aside. Regarding the duty demand, the Tribunal ruled that ship stores were exempt from customs duty, agreeing with the appellant's request for duty-free supply of the goods as ship stores. Consequently, the demand for duty was deemed premature and set aside. The issues related to the valuation of goods and the applicable duty rate became irrelevant in light of the duty-free supply decision. The Tribunal also dismissed the demand for interest, citing its inapplicability following the setting aside of the duty demand and its non-maintainability under Section 28AB of the Customs Act, 1962. Therefore, the impugned order was completely set aside, directing that the goods be treated and dealt with as ship stores, resolving the dispute comprehensively.
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