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TMI Blog1986 (12) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... goods from a foreign port to an Indian port without touching any intermediate port in India or not. Under Section 2(21) of the Customs Act, 1962 it is the character of the vessel for the time being which appears to be relevant and not the character of the goods. From this it would appear to follow that in order to be treated as a foreign going vessel under Section 2(21) she must be engaged inter alia in carriage of goods lifted by her from a port outside India to a port or ports within India or vice versa. In the particular case, prima facie, the moment the goods were unloaded to M.V. Anupama from the Super-Tankers, the task of Super-Tanker was over and thereafter M.V. Anupama was only carrying goods from a place or port in India to another part in India. 3. It was further stated in the review notice that Government of India are tentatively of the view that the Appellate Collector appears to have grossly erred in deciding the appeal in favour of the Respondents without fully appreciating the findings of the Assistant Collector in the order-in-original that the vessel had actually reverted to coastal trade as declared by the shipping agents M/s J.M. Baxi Co. and that it was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request, the ship had sailed for Bombay on 26-9-1975 in Ballast on coastal run only. The itinerary of the ship further reveals that the vessel remained in Bombay from 27-9-75 to 13-10-1975. Subsequently also, as it transpires from the records, that the owners/agents have never carried out the formalities of even intimating that Ship has reverted to the foreign trade. Hence for the material period for determination of duty etc., I hold that the ship has to be considered and was actually on the coastal run . Shri Pal further referred to the definition contained in Section 2(21) of the Customs Act and contended that the transportation of goods by vessel M.V. Anupama was from a place or port in India to another port in India and therefore it cannot be said that it was engaged in carriage of goods from a port in India to any port outside India and as such it cannot be considered as a foreign going vessel within the meaning of that expression. It was also urged by Shri Pal that the Collector (Appeals) had not taken into consideration the ships itinerary and particularly reverting to coastal trade on its own request. It was also urged by Shri Pal that the Appellate Collector ought not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the vessel did revert to coastal trade on 26-9-1975. It sailed to Bombay and remained in Bombay upto 13-10-1975. In the meantime the agents of the ship filed a Bill of Entry from assessing the ship s store. The Shipping Corporation, however, disputed that the vessel Anupama reverted to coastal trade or there was any such request by the owners or the agents but the agents were compelled by the Customs to file the Bill of Entry. They further contended that after it discharged the cargo it carried from foreign port it extended her service as a daughter vessel for intermediate ports to the super-tankers and therefore, it has to be treated as a daughter vessel. There is no dispute that the ship s voyage from Bhavrtagar to Bombay was in Ballast. It was not contended by the Department that the vessel Anupama at any time carried Indian goods or discharged Indian goods in any of the Indian ports. Admittedly, the vessel Anupama was engaged till 12-1-1976 in transportation of imported cargo between Indian ports. Thereafter, it sailed to Calcutta and then to Aden via Kakinada. 9. The Assistant Collector recorded a finding that the vessel has to be considered as having been reverted to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haracter of the goods. It was further urged that Nancy Dee was not engaged in carrying goods between a port in India and a port outside India but solely within Indian ports like Paradip or Sandheads to Kidderpore. The other argument addressed in that case was that a foreign going vessel under Section 2(21) must be engaged in carriage of goods between a port outside India and a port within India. It was also contended that the moment the goods were unloaded to Nancy Dee from the super-tankers the task of the super-tankers was over and Nancy Dee was carrying goods from a place or port in India to another port in India. The Division Bench of the Calcutta High Court, however, did not accept the above contentions. The High Court observed under the scheme of the Act, it seems to us, that there may be two kinds of shippings, viz., (i) coastal shippings and (ii) foreign shippings. On the facts disclosed, it does not appear to us that this is a case of coastal shipping at all. Nancy Dee was not required to have and did not have a licence for coastal trading vide Appellant s Solicitor s letter, dated 26-12-1970 to the Assistant Collector of Customs, being Annexure B to the petition. The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a correct proposition in law. A foreign going vessel does not lose its character because it is on a coastal run enroute to foreign countries even if the coastal cargo is larger than the foreign cargo. The position would not change if the foreign going vessel discharge its entire foreign cargo and took cargo on its way to collect foreign cargo at another Indian port. It is only if the foreign going vessel is diverted to coastal traffic for some period of time then its status would be altogether different . (Law of Custom by S.D. Sukthankar, page 194). 14. In the instant case, all that the Department was able to establish was that after discharging foreign goods at Bhavnagar, the vessel voyaged to Bombay in Ballast and remained in Ballast from 26-9-1975 to 13-10-1975. This stay of the vessel by itself would not convert it into a coastal trading vessel. In this connection, reference may be made to the Departmental instructions found in the order of the Collector (Appeals). The instructions read if a vessel completes discharge of foreign cargo at Bhavnagar and then proceeds in Ballast to another Indian port there to load cargo for another foreign port, that in Ballast journey d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of the Shipping Agents M/s J.M. Baxi Co. at Bhavnagar. The appellants have argued that M.V. Anupama acted as a daughter vessel to the super-tankers and therefore, following the decisions of the Madras and Calcutta High Courts in Writ Appeal Nos. 583 to 587 of 1971, dated 22-4-1974 and appeal No. 314/71 decided on 3/4th May, 1976 respectively, no duty should be charged on the stores of the vessel M.V. Anupama by the Bhavnagar Custom House. As per the ratio of these judgments, the appellants have argued that the services of the M.V. Anupama to the super-tankers were those of the daughter vessel in the lightening operations from the mother vessels viz. super-tankers and therefore, the voyage of M.V. Anupama should be treated as a continuation of the voyages of the super-tankers and hence no duty should be leviable on the stores of M.V. Anupama. However, the Assistant Collector of Customs, Bhavnagar did not accept the contention of the steamer agent that the ship was a foreign going vessel within the meaning of Section 2(21) of the Customs Act and ordered levy of duty on the stores of the ship which was paid under Bill of Entry No. 31, dated 31-7-1976 and cash No. 1, dated 2-5-197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of such an exemption is not available to the stores of the Anupama and they are chargeable to duty as mentioned above. But the levy and collection of duty can be postponed under Section 86(1) of the Customs Act, and under Section 87 ibid, the stores can be permitted to be consumed without payment of duty during the period the ship remains a foreign going vessel. The levy of duty can. thus be stayed and avoided so long as the ship remains a foreign going vessel. In the present instant, it is not the respondent s case that the imported stores remained on board without being consumed as provided under Section 86. The Collector s appeal pertains to the levy of duty on M.V. Anupama s stores when she did not remain a foreign going vessel, but reverted to coastal trade as per the request of her agents at Bhavnagar. The phrase coastal trade is not defined in the Customs Act, though Chapter XII deals with coastal goods and coasting vessels. Strictly speaking, such a definition is not essential for the consideration of the present appeal. What is important is the crucial fact that as per the agent s request, the Anupama ceased to be a foreign going vessel with effect from 26-9-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cargo into the Nancy Dee and the Nancy Dee carried the goods to the ports of destination, namely Paradip and Calcutta. Hence, the High Court held that the carriage of goods by the Nancy Dee was merely a continuation of the voyages of the super-tankers. The Nancy Dee was therefore held to be a foreign going vessel within the definition of Section 2(21) of the Customs Act and accordingly the Hon ble High Court allowed the writ appeal of the agents of the Nancy Dee, M/s Turner Morrison Co. Ltd. and set aside the Assistant Collector s order demanding duty on her stores. Besides, it seems the question relating to the levy of duty on the stores of the Nancy Dee went up for consideration before the Single Judge and the Division Bench of the Calcutta High Court out of an order of the Assistant Collector of Customs for Exports (II) of the Calcutta C.H. It would thus imply that the duty on the stores of the Nancy Dee was demanded by the Assistant Collector of Customs, Calcutta and not by the jurisdictional Assistant Collector in charge of Paradip port where the Nancy Dee arrived from a foreign port on 4-1-1970. The nature of the subsequent voyage of the Nancy Dee from Paradip to Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserve that in coming to the aforesaid finding, the High Court was deciding a question before it in its writ jurisdiction. In that case, the High Court was free to travel beyond the limits of the Customs Act and give an appropriate finding in the appeal. On the other hand, the Tribunal cannot go beyond the Customs Act. Apart from this aspect, the question of the binding nature of the High Court s judgment on the Tribunal was considered by the larger Bench of the Tribunal in the case of M/s Atma Steel Private Ltd. and Others, vide 1984 (17) E.L.T. 331. In this decision, the Tribunal held that it was not bound by the decision of the High Court, within whose jurisdiction the Tribunal was located, as the jurisdiction of the Tribunal comprised the whole of India and therefore the Tribunal had the judicial freedom to depart from the decision of a particular High Court. Following this decision of the Tribunal, I find myself unable to agree with the decision of the Calcutta High Court in the case of M/s Turner Morrison Co. Ltd. 20. Reverting to the case of M.V. Anupama it is seen that after allowing the first appeal of the Shipping Corporation of India Ltd., the Appellate Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ages of the Anupama as a daughter vessel to the three super-tankers Motilal Nehru, Rajendra Prasad and Jhansi Ki Rani were a continuation of the voyages of the super-tankers. But there is a serious legal flaw in such a proposition. This argument totally ignores the provisions of Sections 30, 31, 39, 41 and 42 of the Customs Act which enjoin on the Master (1) to file the IGM of the ship; (2) to enter her inwards at the Customs port; (3) to file an entry outward at the same port; (4) to file an EGM at this port; and (5) to take port clearance from that port to the next port of call. The provisions of these Sections have further to be read with the Rules and Regulations framed by the Government and the Central Board of Excise and Customs for carrying out the purposes of the aforesaid Sections. These are the Import Manifest (Vessels) Regulations, 1971 and the Export Manifest (Vessels) Regulations, 1976. As per the first regulation, the Manifest is required to be filed in the prescribed form and with the prescribed declarations and documents. These requirements further stipulate that if a ship is not carrying any cargo for a particular Customs port, it has to file a Nil cargo manifest a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, carried transhipment cargo from Salaya to Marmagoa and Calicut. The voyages of the Anupama therefore went beyond the scope of the functioning of a daughter vessel to the super-tankers. Since on these voyages, she left Salaya, a Customs port for another Customs port, Marmagoa or Calicut, she was in the coastal run. This was in continuation of the coastal trade which she entered at Bhavnagar on 26-9-1975. From Calicut, she touched Cochin enroute to Paradip and loaded bunkers. At Paradip, she helped lighten the third super-tanker and called at Calcutta for discharging the foodgrains brought by the jhansi Ki Rani at Paradip. It is not the appellant s contention that Calcutta was on the itinerary of the jhansi Ki Rani and hence the Anupama s voyage from Paradip to Calcutta cannot be termed as the continuation of the foreign voyage of the jhansi Ki Rani. From Calcutta the Anupama sailed to Kakinada on 9-1-1976 and after loading ore at Kakinada, she sailed for the foreign port of Constanza on 17-1-1976 when she again embarked on a foreign run and became a foreign going vessel at that point of time. Therefore from 26-9-1975 to 17-1-1976, the Anupama was not a foreign going vessel. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were unable to come alongside of Indian ports. I find that even if the cargo lightened off Salaya was unloaded at Marmagoa and Calicut and not at Salaya. itself, and that lightened off Paradip was unloaded at Calcutta and not at Paradip itself, the material fact remains that M.V. Anupama functioned only to continue and complete the task of the mother vessels - that of bringing cargo from abroad and unloading them at Indian Ports. There is no evidence that during this period M.V. Anupama picked up any Indian cargo from one Indian port to unload it at another Indian port. The material facts of the present case are, therefore, similar to those decided in Calcutta and Madras High Court judgments supra. The learned representative of the Department admits that there is no contrary judgment of any other High Court or of the Supreme Court on the point. In the circumstances, in keeping with the practice of this Tribunal, I hold that the ratio of the Calcutta and Madras High Court judgments supra is binding on me. The fact that to begin with the respondents themselves had applied for conversion of the vessel as a coastal vessel cannot be held against them as estoppel once they realised their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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