2023 (11) TMI 424 - AT - Customs

Confiscation - dumb barge Century Star-3002 (without self propulsion) - movement in and out of the country the barge in any event will have to be construed as a foreign going vessel or as Imported goods ? - HELD THAT - In view of the law propounded in the case of SHAHI CONTAINERS VERSUS COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI 2003 (9) TMI 453 - CESTAT, MUMBAI , it is amply clear that the adjudicating authority had erred in imposing penalty and confiscating the barge Century Star-3002, even though it was allowed conversion from foreign to coastal run. The plea that the duty paid in respect of the barge was with reference to consumables alone that were required for consumption during the coastal run, is only open for consideration of the appropriate juridical authority, who in the first place allowed the conversion or by way of appeal proceedings of the said orders. That being not the case herein, the plea is not open for such an assertion. It need be pointed out that if at all any duty was required to be paid on the dumb barge at the time of conversion, the jurisdiction to collect such duty rested with Paradip Customs only and would certainly not fall within the territorial jurisdiction of the present authority. The fact that the barge was already converted from foreign to coastal run and thereafter Customs Duty was paid on the bunkers for voyage, question of any illegal import of the dumb barge Century Star-3002 into India does not arise. Any consequence flowing out of a mis-conceived assumption of jurisdiction and subjecting the appellants herein to penal consequences, confiscation and imposition of penalty on the barge and accordingly on all others concerned in facilitating the movement of the dumb barge or associated with discharge of other formalities concerned, at subsequent port of call, are not liable to be subjected to any failure or to any consequences of an assumed failure. The confiscation of the dumb barge Century Star-3002, under section 115(2) of the Customs Act is not called for. Further, in terms of section 115(2) of the Act ibid, any conveyance used as a means of transport in the smuggling of goods is liable for confiscation, unless it is proved by the owner of the conveyance that it was so used without the knowledge of the owner or his agent, if any or the persons in-charge of the conveyance. In the present case there is not even a whisper to assert, least of all establish that the tug Century Star-1 was used as a means of transport for smuggling of goods and that too with the knowledge or connivance of the owner, agent or the captain of the vessel - confiscation of the tug under section 115(2) of the act cannot be sustained - It is also demonstrated from records that the non-filing of IGM in the present case is certainly without any fraudulent intent, and at best is no more than an inadvertent omission, perhaps spurred because of the peculiarity of circumstances. For the reasons no penalty is also imposable on the owner/representatives and others concerned with, managing the affairs of the vessel. The order of the lower authority suffers from inherent weaknesses and is not in accordance with the legal prescriptions, and therefore liable to be set aside. Since neither confiscation nor imposition of penalty is sustainable and in view of precedent decisions, the appeals filed are liable to be allowed and the penalties imposed upon the appellants liable to be set aside. Appeal allowed.

Summary

Issues Involved:
1. Confiscation of the dumb barge Century Star-3002.
2. Imposition of redemption fine and penalties.
3. Applicability of various sections of the Customs Act, 1962.

Summary of Judgment:

Issue 1: Confiscation of the dumb barge Century Star-3002
The Tribunal examined the facts and found that the dumb barge Century Star-3002 was imported and converted for coastal run in 2006. The barge was towed by the tug Century Star-1 and tied at Sagar Virtual Jetty with proper permissions. The barge was seized in June 2009. The Tribunal noted that the barge was neither prohibited nor dutiable goods, and there was no evidence of unloading at a non-Customs port. The Tribunal concluded that the barge could not be confiscated under Section 111(a), (d), (f), (g), or (h) of the Customs Act, 1962, as there was no violation of import policy or demand for duty.

Issue 2: Imposition of redemption fine and penalties
The Tribunal found that the imposition of penalties under Section 112 of the Customs Act on various parties, including the Master of the tug, M/s. Century Star Shipping Pvt. Ltd., M/s. Atlantic Shipping Pvt. Ltd., M/s. B. Ghose & Co. Pvt. Ltd., and M/s. Babaji Shivram Clearing & Carriers Pvt. Ltd., was not justified. The Tribunal emphasized that there was no evidence of fraudulent intent or knowledge of any contravention of the Customs Act. The Tribunal referred to the case of Essar Oil Ltd. Vs. Commissioner of Customs, Mumbai, and concluded that penalties could not be imposed for mere negligence or inadvertent omissions.

Issue 3: Applicability of various sections of the Customs Act, 1962
The Tribunal analyzed the applicability of Sections 111, 112, and 115 of the Customs Act. It was noted that the dumb barge Century Star-3002 was classified as an "ocean-going vessel" and exempted from duty under Notification No. 165-CUS. The Tribunal referred to the case of Nobel Asset Co. Pvt. Ltd. Vs. Commissioner of Customs (Preventive), Mumbai, and concluded that once a vessel is assessed to duty and cleared for home consumption, it ceases to be imported goods and becomes a conveyance. Therefore, no duty could be demanded on subsequent movements in and out of India. The Tribunal also found that the tug Century Star-1 could not be confiscated under Section 115(2) as there was no evidence of its use in smuggling goods with the knowledge or connivance of the owner or captain.

Conclusion:
The Tribunal set aside the order of confiscation and penalties imposed by the adjudicating authority, allowing the appeals with consequential reliefs as per law. The judgment emphasized the importance of proper jurisdiction and the absence of malicious intent in determining penal liabilities under the Customs Act, 1962.