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TMI Blog1988 (9) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Suit No. 9 of 1985, the Sheriff of Bombay sold the ship by a public auction on 6-12-1985 on as is where is basis. The Sheriff had fixed Rs. 50 lakhs as the minimum reserve price for the auction. The appellants offered the highest bid of Rs. 50 lakhs. Their offer was accepted. It was approved by the Hon ble Bombay High Court on 27-12-1985. In the meantime, with permission of the Sheriff, the appellants put their own guards on the ship on 20-12-1985. The ship was salvaged and beached on 24-1-1986. The appellants filed the Bill of Entry on 5-2-1986 for Customs clearance of the ship. The Superintendent of Customs provisionally assessed the ship on 26-3-1986 by taking the auction value of Rs. 50 lakhs as per the interim order dated 19-3-1986 passed by the Hon ble Gujarat High Court. The High Court vacated the interim order on 1-5-1986 and directed the Customs authorities to assess the value of the ship as per the custom law. The appellants contended before the Superintendent that the ship had been plundered and damaged and that, therefore, the value of Rs. 20.20 lakhs assessed by the appellants surveyors M/s. Metcalfe Hudgkinson (Pvt.) Ltd., on the basis of the condition of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government." In view of the direct and specific provision in sub-section (2) above, there can be no basis for the proposition that any goods are exempt from Customs goods just because they happen to be Government property. 6. The appellants stated that the vessel came to India as a regular ship to unload cargo. It was not a ship imported into India for breaking up. Since ocean-going vessels were exempt from customs duty, there was no duty liability. We find that there is no legal authority for this proposition either. The charging Section 12 imposed duty on goods imported into India at rates specified in the Customs Tariff Act, 1975. Section 2(22) of the Act defined goods as including vessels. Section 2(23) of the Act defined import as bringing into India from a place outside India. Chapter 89 of the First Schedule to the Customs Tariff Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 21 included derelict also. Among the definitions produced before us by the appellants, the following definition of derelict occurs :- Derelict is property, whether vessel or cargo, abandoned at sea by those in charge of it without hope on their part of recovering or intention of returning to it. A vessel is not derelict which is only left temporarily by her master and crew with the intention of returning to her, even though the management of the vessel may have passed into the hands of salvors. On the other hand, a vessel deserted by her master and crew with the intention of abandoning her does not cause to be derelict because they subsequently change their intention and try to recover her. Whenever the question arises whether a vessel is derelict or not, the test to be applied is the intention and expectation of the master and crew at the time of quitting her, and, In the absence of direct evidence, that is determined by consideration of all the circumstances of the case." During the course of the hearing, we observed in the open court that this definition exactly fitted the appellants ship and that Section 21 had left no doubt that derelict goods were also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the vessel in these particulars of sale, the bidder or bidders by giving his or their bid or bids shall be deemed to have waived all such errors and/or misstatements and/or omissions and shall not be entitled to annul the sale or to be discharged from his or their purchase or to claim any compensation in respect thereof." The terms and conditions of the auction sale, therefore, left no doubt that the intending bidders were to bid for the ship in the condition it was. It was in that condition of the ship that the appellants, an experienced firm in the business of ships for breaking up, found it worthwhile to purchase the ship for Rs. 50 lakhs plus incidental expenses. We have no doubt, therefore, that the auction price of Rs. 50 lakhs represented the fairest possible value for the ship in the condition it was at the time of sale. This value satisfied the provisions of Section 14 and also complied with the principles enshrined in Sections 13, 22 and 23 of the Customs Act. 9. Condition Nos. 15 16 of the terms and conditions of sale made it further clear that in addition to the highest bid amount, the purchasers shall have to bear and pay all charges, dues, duties, tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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