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TMI Blog2015 (9) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... to a dispute only on the quantum of duty demanded and the consequent penalty. In my view unless there is an express conceding of the issue and the legal contentions, which the Tribunal records in its order, it cannot be construed that when the matter has been remanded by finding merit in one of the contentions urged, that, the other contentions stand given up or foregone. - the contention that contention that they were not the importer is required to be examined. Whether the imported goods could be called ship stores as per the definition under Section 2 (38) of the Customs Act - Held that:- The goods imported in the instant case have been taken to offshore locations where the provisions of the Customs Act had not been extended and that the goods after being used there, were brought back to India for being re-exported out of the country. The situation in the present case is squarely covered by provision of Section 54(2) of the Customs Act, wherein it is provided that any goods imported into a Custom Station for transshipment to any place outside India, may be allowed to be transshipped without payment of duty. - consequently no customs duty could have been demanded. Import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reasons assigned by the Respondents for imposing penalty are not sustainable.- no penalty under Section 112 was imposable on the Appellant - Decided in favour of assessee. - Appeal No. C/120 & 121/06-Mum - Final Order Nos. A/2666-2667/2015-WZB/CB - Dated:- 30-7-2015 - Ashok Jindal, Member (J), P. K. Jain, Member (T) And M V Ravindran, Member (J) - Third Member on Reference For the Appellant : Shri Vipin Kumar Jain, Adv For the Respondent : Shri D Nagvenkar, Addl Commissioner (AR) ORDER Per Ashok Jindal The appellants are in appeals against the impugned order wherein duty has been demanded along with interest and imposition of penalties on both the appellants. 2. Brief facts of the case are that M/s. Schlumberger Asia Services Ltd., (the main appellant) is having its registered office in Hong Kong with a project office established in India under the erstwhile FERA Regulations. The appellant is a service provider to ONGC and was engaged by ONGC for rendering services such as wire line testing, measurements while drilling etc. in their offshore oil well drilling operations, beyond the territorial waters of India. The appellant used to assist ONGC in contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate further submits that as these goods were imported wee ship stores which were meant for on board consumption on foreign going vessels. As per Section 85 of the Customs Act, no customs duty is payable on Ship Stores and if the goods were not ship stores, no duty was payable on the disputed goods as immediately after their import, the said had been taken outside the territorial waters of India to places where the vessel/rig operating at ONGC sites, therefore the Customs have no jurisdiction to levy duty on goods. To support his contention the learned Advocate placed reliance on the decision in the case of Amership Management Pvt. Ltd. - 1996 (86) ELT 15 (Bom). It is further submitted that no duty is leviable under the Customs Act for goods in transit/transhipment. It is further submitted that the goods have been imported and used for oil exploration work for ONGC which was otherwise exempt from payment of duty. As end-use of the goods was not in dispute therefore, merely in the absence of essentiality certificate, exemption should not have been denied. It is further submitted that in some cases, ONGC was able to obtain essentiality certificate for the import of the said g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to duty. The said term has been interpreted by the Hon'ble High Court in the case of UOI vs. Jupiter Exports - 2007 (213) ELT 641 (Bom) and also by this Tribunal in the case of Commissioner v. Dines Chhajer - 2008 (233) ELT 436 (tri. Bang)which was affirmed by the Hon'ble Karnataka High Court in 2014 (300) ELT 498 (Kar) to mean the importer. The term importer has been defined in Section 2(26) of the Customs Act, 1962 to mean, in relation to any goods at any time between their importation and the time when they are cleared for home consumption included any owner or any person holding himself out to be the importer. In the light of this provisions, it is not in dispute the imports in the instant case were effected either by ONGC or by courier or by hand baggage. Therefore, in these circumstances, the appellants cannot be held as importer as the appellants neither filed bill of entry nor they claimed owner of the goods or the goods were imported for the benefit of the appellants. In fact, by all means, the goods were imported for an on behalf of the ONGC by courier agency or by hand baggage. In case, the imports were made by courier agency, the courier agency is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR 1986 SC 1370 wherein it was held that requires permission to be taken such permission can always be granted post facto by the competent authority as long as the statute does not require prior permission to be taken. Since Section 85 of the Customs Act, 1962 does not require any prior permission to be taken, the learned Commissioner ought to have taken note of the undisputed position emerging from the detailed investigation of the case that the goods in question had indeed been used as ship stores and granted post facto permission under Section 85 of the Act. The judgment relied upon by the appellant in the case of Amership Management Pvt. Ltd. (supra) has not been dealt with by the learned Commissioner as the same is directly binding on the adjudicating authority in favour of the appellants. We further find that when the factum of export has not been disputed therefore, the benefit of exemption should not be denied for procedural violation as held by the Hon'ble Bombay High Court in the case of Repro India Ltd. vs. UOI - 2009 (235) ELT 615 (Bom) . In this case it is not in dispute that immediately after importation of the goods, the goods were re-exported after use by ONGC t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Appeals are disposed of with these terms. (Order pronounced in Court on ) Per: P K Jain: 10. I have gone through the order recorded by my learned Brother. However, my views are at variance with that of my learned Brother and, therefore, I am recording a separate order. 11. Brief facts of the case are that the appellant is having their main office in Hong Kong and they have a project office in India. During the period 1993 to 1998 they were providing certain services to ONGC. For providing the said services certain equipments and tools were imported (either by ONGC or the appellant). It is claimed that ONGC was paying rent for the said equipments. These equipments were being used by the appellant and the ONGC in addition to rent on the equipments was paying serving charges for the services provided by the appellant. During the said period the appellant imported certain spares parts - (i) through courier services, (ii) by hand baggage brought by the employees of the appellant when travelling from abroad to India after collecting the same from overseas office of the appellant and hand over the same to the appellant and (iii) few consignments by sea/air. Based up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Notification fixing the effective rates of duty on the ground of mis-statement and suppression. The effective rates cannot be denied and duty cannot be charged at the tariff rate on such grounds. 2) If the duty amounts are correctly computed, the amount paid before the issue of show-cause notice would exceed both the amounts payable. Consequently, no interest would be chargeable under Section 28AB. 3) The provisions of Section 28Ab and Section 114A cannot be invoked prior to September 1996 when they were introduced. 4) Penalty under Section 112 is not imposable since penalty has been imposed under Section 114A. Further, penalty under Section 114A cannot be sustained as no amount has been specified. 5) Penalties are excessive both on these appellant company and the official of the appellant company. 2. Shri M.K. Gupta, learned Jt. C.D.R. appearing for the department states that for the period prior to insertion of 114A penalty can be imposed under Section 112. He fairly concedes that the case needs to be remarked back to the Adjudicating Commissioner to apply the effective rate of duty correctly in respect of various imports. 3. After hearing rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exemption from payment of duty for ship stores and in view of this position no duty is chargeable on the goods. 15. At the outset in my view, both the issues are beyond the direction of remand and, therefore, cannot be taken in the second round of litigation. No appeal was filed by either party and hence Tribunal's order has attained finality. This Tribunal therefore need not go into these questions and should limit to the directions as per remand order. It is to be noted that the appellants have accepted the duty liability right from the time of investigation. In the first round of litigation including the CESTAT stage, duty and other liabilities and the fact that they are owner of the goods/person chargeable to duty on import were not disputed. Even while passing the impugned order emphasis was on the quantification of the duty amount. Similarly, even in the appeal filed before this Tribunal, the main issue was not about their duty liability. It was only during the argument that the Learned Advocate for the appellants raised this issue and thereafter made this as the main point in the written submissions. In my view, it is not correct to entertain such plea at this stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of these facts the ratio of the decision of the Hon'ble Bombay High Court is not applicable in the facts and circumstances of the case. I have also gone through the judgement of this Tribunal as also that of Hon'ble Karnataka High Court in the case of Dinesh Chhajer (supra). In the said case certain electronic items were smuggled by some unknown persons from Nepal to Kolkata. Shri Dinesh Chhajer was a dealer in electronic goods and he purchased the smuggled goods from certain dealers based in Kolkata and after purchasing, sold the same in the domestic market. Revenue wanted to recover customs duty from Shri Dinesh. The Tribunal has taken the view that investigations have revealed that Shri Dinesh Chhajer was only dealing in the smuggled goods and therefore duty liability cannot be fastened on him. It was also observed that no goods have been seized and confiscated from Shri Dinesh Chhajer and therefore duty cannot be demanded even under Section 125 of the Customs Act. I do not find any application of the said case law in the facts of the present case. In the present case, even the goods brought as baggage were by appellant's employees as per appellant's direction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es door to door transportation services of packets/parcels. Since majority of courier parcels are of small value, a simplified procedure has been prescribed by the Government under Courier Imports (Clearance) Regulation, 1995. Regulation 2(1) of the said Regulation reads as under:- Application. - (1) These Regulations shall apply for assessment and clearance of goods carried by the representatives of Authorised Couriers on incoming scheduled passenger flights on behalf of a consignee for a commercial consideration. Further Regulation 7 of the said Regulations reads as under, - 7. Entry of goods on importation.- The authorized courier shall make entry of goods imported by him by presenting to the proper officer a bill of entry in Form III or as the case may be in Form V appended to these regulations: Provided that the authorized courier, or with the concurrence of the authorized courier, the consignee or a Custom House Agent on behalf of the consignee, may file a bill of entry in the form prescribed in the Bill of Entry (forms) Regulations, 1976 for clearance of any of the imported goods: Provided further that for the following goods the entry shall be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Airway Bills and the invoices and other documents attached herewith. iv I/We enclose herewith (number) of airway bills and (number) of invoices for the aforesaid consignments with this Bill of Entry. From the above it is clear that the courier agency handles goods as an agent of the consignee or the importer and is not an importer himself. Courier Agency collects duty from the importer or consignee at the time of delivery and remits the same to the Customs department. In view of this position in my view courier agency cannot be considered as the importer of the goods. Incidentally exactly similar situation occurs in the case of post parcels. There also based upon the declaration pasted by the consignor, the Customs assesss the duty and the post authorities collect the duties from the consignee/importer and remit the same to the Customs department. It is not the post authorities or the consignor but the consignee who is considered as importer and has to ensure that import is authorized and as per law. If any law is violated in respect of goods in the courier parcel or a post parcel it is the consignee who has to face the consequences and not the courier agency or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability on the said goods and the duty had been demanded only on the differential value. Thus even in this case duty and other liabilities is on the appellants. 21. In view of the above position, I am of the considered view that the duty liability in all the three situations is on the main appellant and the main appellant alone and duty demand has been correctly confirmed in the impugned order. 22. The second ground on which my learned brother has taken a view that duty liability cannot be confirmed as the goods were used on board rigs which were rendering services to ONGC beyond the territorial waters of India as these were called as ship stores and consumed on board foreign going vessels. It is also stated that Section 85 of the Custom Act gives exemption from payment of duty for such ship stores. Learned Brother has also observed that adjudicating authority has denied the benefit on the ground that the appellants have not claimed the benefit under Section 85 of the Act at the time of import. From the details provided it appears that the appellant is providing wire line testing and measurement services to ONGC. In the case of Amership Management Pvt. Ltd. (supra) the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of Section 85 cannot be extended at this stage. In my view findings of the Commissioner in the facts are correct. I have gone through Hon'ble Supreme Court judgement in the case of LIC v. Escorts Ltd. (supra). The said case was relating to acquiring of share stakes and is in totally different circumstances. Main issue is relating to Customs duty at the time of import. Proper officer has to satisfy various conditions at the time of import. Section 85 itself stipulate (i) goods to be ship stores, (ii) goods are entered for warehousing, (iii) makes and subscribes to a declaration that goods are to be supplied as stores thereafter proper officer may permit. In this case none of the three conditions were satisfied at the time of import. On the contrary, parts were smuggled or misdeclared in value/description. There is therefore no question of granting permission after being caught. In the context of taxation law, Hon'ble Supreme Court in the case of CCE vs. Harichand Shri Gopal reported in - 2010 (260) ELT 3 (SC) has observed as under, - 24. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion to be examined is whether the requirements relate to the substance or essence of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the essence of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential. In the case of Indian Aluminium Company Ltd. vs. Thane Municipal Corporation reported in 1991 (55) ELT 454 (SC) in para 3 and 7 has observed as under:- 3. The declaration contemplated in Form 14 is to the effect that the goods imported shall not be used for any other purpose for sale or otherwise etc. It can thus be seen that an incentive is sought to be given to such entrepreneurs by such concession if the raw material which is imported is also utilised in the industrial undertaking without selling or disposing of otherwise. That being the object a verification at the relevant time b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antive clause. In effect the proviso says that part of the turnover of the selling dealer covered by the terms of sub-clause (ii) will be exempted provided a declaration in the form prescribed is furnished. To put it in other words, a dealer cannot get the exemption unless he furnishes the declaration in the prescribed form. It was further held as under : There is an understandable reason for the stringency of the provisions. The object of Section 5(2)(a)(ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax. In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will well-nigh be impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section. Therefore, presumably to achieve the two-fold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption given is made subject to a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shifted (was it not within Exclusive Economic Zone where Customs Law are applicable) and when was it received back in the mainland and when it was re-exported out of India have not been detailed or given by the appellants at any stage in respect of even a single import. Spare parts were used by appellant and not ONGC. No procedure as per law was followed. In fact the appellants have not claimed benefit of ship stores in the first round of litigation and before the adjudicating authority though mentioned by the appellants and claim is not supported with details. It is only the learned Advocate for the appellants during the 2 nd round of litigation has pressed this point without any details. In my view it is too late to claim the said benefit particularly when the appellants have accepted the liability in the beginning of investigation itself. Even if for some reason, the claim had to be examined it is absolutely necessary on the part of the appellants to produce leaflet of each items (it may be mentioned that the appellant intentionally has directed the supplier to declare the description as mechanical spares instead of correct description in number of cases). Leaflet catalogue of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he oil rigs (which are located in area where Customs Act is applicable) and the details of receiving back and thereafter exporting back from India. In the absence of all these details, it cannot be said that no duty is leviable. 26. As far as penalty under Section 112 on the main appellant is concerned, I find that the said goods were (i) smuggled through employees of appellant and were sent from appellant's office abroad and finally collected and used by appellant (ii) were imported through courier by misdeclaring the value as also in some cases the description, were again sent from appellant's office abroad and collected in India and used by the appellant. Ownership as also effective control remained with the appellant. The fact that they were used for providing services to ONGC does not make any difference. Smuggling and misdeclaration were at the instance of appellant. Appellant is therefore liable to penalty under Section 112 of the Customs Act and the penalty has been correctly imposed in the impugned order. 27. Incidentally, Learned Advocate for appellant has tried to claim that goods imported were old and used and value declared were that of old and used while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son chargeable to duty at this stage as held by Member (Technical). 2. Whether the appellant can be permitted to raise the issue that the goods are ship stores, meant for use beyond the territorial waters of India and thereafter to be re-exported back and hence no duty can be charged as allowed by Member (Judicial). Or The goods imported are not ship stores as per the definition under Section 2(38) of the Customs Act particularly in view of the fact that the appellants are only providing wireline testing, measurement while drilling etc., service to ONGC and spare parts imported are used in the equipments for providing the said service and are not part/fitment of the oil rigs. Moreover, no catalogue, literature or supporting evidence is produced at any stage for the said claim. No details have been provided how and where the goods are used. The provisions of Customs Act are not only applicable to the territorial waters of India but also to Exclusive Economic Zone. Further no details have been provided when the goods were taken on oil rigs, when received back and when re-exported back and no procedure has been followed as prescribed under any Sections of the Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay duty but as they are not liable to pay duty but as they are not contesting the confirmation of duty against them. Or Penalty is imposable under Section 112 of the Customs Act in the facts and circumstances of the case on both the appellants irrespective of contesting or contesting duty liability as held by the Member (Technical) (Order pronounced on 19.08.2014) Schlumberger Asia Services Ltd, Shri Sudhir Pai Versus Commissioner of Customs ( ADJ ), Mumbai 3rd Member Decision Date of Hearing: 9.6.15 Date of Decision: 30.7.15 Per: M V Ravindran: This difference of opinion is placed before me as per order of Hon'ble President for deciding the following points of difference that arose before the bench while deciding the appeal. a) Whether in the facts and circumstances of the case appellants can at this belated stage raise the issue that they are neither importer nor person claimed themselves to be the owner of goods and hence no duty can be confirmed against them as allowed by Member (Judicial). Or In view of the facts that the goods belongs to the appellant or their associate and sent at their instance, the appellant admitted the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the appellant consignee, while filing a consolidated Bill of Entry for all consignees, and appellant consignee is the importer and person chargeable to duty in respect of his consignments as held by Member (Technical). d. In case of hand baggage, the passenger who brought he baggage is the importer and hence duty cannot be demanded from appellant as held by Member (Judicial) Or In the case of hand baggage also duty is chargeable from the appellant as goods were brought by appellant's employees without declaring or declaring but under-declaring the value, goods were owned by the appellant or their associate, were taken from appellant's offices abroad and after passing through Customs in India again handed over to the appellant, which in turn were used by appellant in connection with providing service to ONGC as hled by Member (Technical). e. Whether in case the imports were made through sea, ONGC has to file bill of entry as importer as held by Member (Judicial) OR Appellant has admitted duty liability in respect of 4 consignments of spare parts imported by sea/air, and no evidence is produced that bill of entry was filed by ONGC. Moreover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parent or associated firms located in Dubai, France, Calcutta and United States. There is no outright sale of the imported goods to M/s SASAL Mumbai or the contracting agency. The service charges are paid to parent firm directly. The tile of the imported tools and spares remains with the parent firm............. 8...................The nature of the transaction i.e without the sale of the imported goods and without sending consequential remittances abroad against the specific imports with the contracting agency and the parent firm facilitated M/s SASL to prepare parallel set of invoices reflecting a nominal value exclusively for customs purposes................... 2.3 Sometime in the year 1998, the DRI initiated investigations by calling upon the Appellant to furnish information regarding the import of logging tools and spares for ONGC contract. In response to the enquiry letters from DRI, the Appellant submitted 24 box files under cover of its letters dated 13.5.1998 and 30.6.1998. With reference to the documents provided by the Appellant, statements of various personnel of the Appellant company were recorded on the question, as to who had imported the groups and wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that against the main logging unit (one unit), the value declared to Customs is USD 40000 whereas the original value shows the value USD 80,000 i.e. undervalued to the extent of 100%. c) Invoice 93/0743 dated 21.7.93 (Annexure X-5, the value declared to Customs was US$ 21169 as against the original invoice value of US $ 30242. d) Invoice 94/A/940777 dated 28.11.94 (Annexure X-6), the value declared to the Customs for clearance under B/E No. 1768(4608 dated 6.2.95) was US$ 13261 whereas the actual value in the original invoice was US$18516 thereby under valuing the item to the extent of US $ 5255. 2.6 On being asked about the aforesaid differences, Shri Sudhir Pai in his statement dated 18.5.1998 explained that the value at which the same were recorded at the Material Reception Centres/Price List, represented the original value of the equipment (i.e. of the new equipment without considering depreciation for the period of its use). He further stated that the equipments imported being old and used, they had been invoiced as per their depreciated value in accordance with the Standard Guidelines of Schlumberger. The relevant extract of the statement of Mr Sudhir Pai date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o duty was paid at the time of importation. The imports through courier were misdeclared both in terms of the value and description of the goods. It appears that to expedite the clearance and evade Customs duty, M/s SASL abandoned the normal procedure of importation and willfully adopted the short cut of mis-representing the facts to the department. The fax messages clearly indicate that the evasion was willful and there was a deliberate attempt on their part to suppress the actual value form the department, thereby making them liable for action under proviso to Section 28 and Section 28AB of Customs Act, 1962 and the goods become liable for confiscation under Section 111(d), 111(m) and 111(o) ibid by virtue of the fact that the provisions of the Customs Act were not complied with at the time of importation/clearance, the value and description of the goods were misdeclared and essentiality certificate conferring concessional rate of duty was obtained on false invoices. 9. The details of all the imports made through hand baggages, courier and sea ports where appropriate duty was not paid, are tabulated in the annexure-A. While preparing the annexure, as far as imports through c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The proposal made in the Show Cause Notice were confirmed by the adjudicating authority against which the Appellant preferred an appeal before this CESTAT, wherein it reiterated all the contentions urged in its reply to the notice. The appeal contains specific challenges to the demand for duty on the ground that the appellant was not the importer; goods were ship stores and that the goods had been re-exported. 2.11 The CESTAT vide Order No. C-III/708 to 710/WZB/2003 dated 17.4.2003 held as under: 3. After hearing rival submissions and perusal of the case records we are of the opinion that the impugned order is not sustainable as it has computed the duty liability without applying the exemption Notifications prescribing effective rates of duty from time to time. We also observe that penalties have been imposed both under Section 112 and under Section 114A which are mutually exclusive. The Commissioner has also not quantified the amount of penalty under Section 114A and has merely stated that the appellants are liable to pay mandatory penalty as envisaged under Section 114A. In view of the foregoing, we have no option but to set aside the Order in Original and remand the same f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing used as ship stores on foreign going vessel, such a permission could not be granted at a later date. Insofar as the argument that goods having been imported for oil exploration work were otherwise exempt from payment of duty/goods after use were re-exported and drawback would have been eligible, it was held that the claim for exemption /drawback could not be examined at the adjudication stage and ought to have been claimed at the time of import/export. It was further held that there was evasion of Customs duty and accordingly the Appellant company and its employee was liable for penalty. The summary of total duty and interest payable as appearing in the annexure to the order reads as thus; Mode of Import Duty Payable (Rs.) Interest Payable (Rs.) Air/Sea Courier Hand Baggage 68,549 1,35,20,252 48,19,955 NIL 3,38,098 99,460 TOTAL 1,84,08,757 4,37,558 3. Having recorded the relevant facts, I will now deal with the submissions urged by the Appellant and the Respondent on the issues of difference urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) M Nagabhushana vs State of Karnataka 2011 (271) ELT 481 (SC) 3) Central India Polyester Ltd vs CCE 2004 (171) ELT 241 (T) 3.4 In my view the order passed by CESTAT, remanding the matter back to the adjudicating authority cannot be so read so as to limit its scope only to the determination of the effective rate of duty. It is nobody's case that the appellant had before the CESTAT given up on all its other contentions and had confined its case to a dispute only on the quantum of duty demanded and the consequent penalty. In my view unless there is an express conceding of the issue and the legal contentions, which the Tribunal records in its order, it cannot be construed that when the matter has been remanded by finding merit in one of the contentions urged, that, the other contentions stand given up or foregone. It has always been the practice of this Tribunal, that whenever an assessee gives up on any of its contention or makes a concession, the same is specifically recorded in the order. In the instant case neither from the order nor from the records I could find either any written or oral concession on the part of the appellant with respect to any of legal conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the notice was that the goods in question were mechanical spares and that the same had been imported on urgent basis so that the operation of the rigs was not held up, which would entail a national loss of ₹ 1 lakh per hour. It was further submitted that the only reason assigned by the adjudicating authority for refusing to extend the benefit of ship stores was that in terms of Section 85 of the Customs Act, 1962 it was the prerogative of the proper officer to permit warehousing of the goods imported without payment of duty for use as ship stores. According to the Respondent since prior permission of the proper officer had not been sought, the claim that the goods imported were ship stores could not be entertained at a belated stage. It was submitted on behalf of the Appellant that Section 85 does not contemplate a prior permission and that a post facto permission could have been granted, since no prior permission was contemplated. Reliance in this regards was placed on the judgement of the Apex court in the case of LIC vs Escorts Ltd, AIR 1986 SC 1370. Insofar as the finding of Member (Technical) to the effect that there was no evidence produced to show that the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute that goods were used or consumed in the offshore locations to which the jurisdiction of the Customs Act was not extended. I find that, it is not in dispute that goods were used or consumed in the offshore locations to which the provisions of the Custom Act have not been extended. It is only w.e.f. 7.2.2002 that the provisions of the Customs Act, 1962 were extended to the whole of the Continental Shelf and the whole of Exclusive Economic Zone of India. Prior thereto the jurisdiction of the Customs Act has been extended only to some specific designated areas in the CS EEZ by Notifications dated 11/1987-Cus dated 14.1.1987 and 64/1997-Cus(NT) dated 1.12.1997. It is not the Revenue's case that the vessels were operating in the said designated areas. In this view of the matter, the present case can be termed as one of transshipment, where the goods are meant to be taken outside India and in terms of Section 54(2) of the Act, no duty is payable on such goods. I find that in terms of Section 46 the importer of any goods other than goods intended for transit or transshipment is required to file a bill of entry, with the proper officer for home consumption or for wareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de India. Further the Apex Court has in the case of Collector of Customs vs Sun Industries reported in 1998 (35) ELT 241 SC held that a ship beyond the territorial waters of the country would be a place outside the country. The relevant observation of the Apex Court in this regards is extracted herein below for ease of reference: 6. .......................It is true that the goods did not land in any place because of the defect in the ship. But the expression taking out to a place outside India would also mean a place in high seas. It is beyond the territorial waters of India. High Seas would also mean a place outside India, if it is beyond the territorial waters of India. Therefore, the goods were taken out to the high seas outside territorial waters of India, they will come within the ambit of expression taking out to a place outside India. Indutiably the goods had been taken out of India. Place according to Webster Comprehensive Dictionary International Edition page 964 means a particular point or portion of space, especially that part of space occupied by or belonging to a thing under consideration; a definite locality or location. It also means an open space or squar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no investigation was undertaken to bring on record as to who the consignee was and as to whether the appellant had filed or authorized the courier to file the bill of entry. It was further submitted that the only reason assigned by the Respondent for holding that Appellant was the importer was that it was the owner of the imported goods, which was contrary to the accepted facts in the notice itself. 5.2 The Ld. AR contended that the courier is an agent of the consignee and cannot be considered an importer. If any duty is short paid due to mis-declaration in value or any other reason the same has to be paid by the consignee. 5.3 i agree with the Appellant that, the reason assigned by the Respondent for confirming the demand for duty against it i.e., on the premise that it was the owner of the goods is manifestly incorrect and contrary to the accepted position in the notice to the effect that the ownership always vested with the holding/associated companies overseas. This position has been time and again reiterated in the show cause notice, the relevant extracts of which reads as under: 3(d) .......... majority of the imports are from their parent or associated firms locat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number, etc in a few cases yet they chose not to investigate as to who the consignee was as also whether there was any authorization from the appellant in favour of the courier to file the bill of entry. In the absence of these details having been brought on record the demand of customs duty against the Appellant cannot be sustained. To this extent I agree with the Member (Judicial). 6. The fourth question of difference is essentially whether Customs duty could have been demanded from the Appellant in respect of goods brought in as hand baggage by its employees without declaring the same or by mis-declaring the value? 6.1 The Appellant has contended that the goods having been imported by the passenger, the demand for customs duty can only be raised against the passenger who was the importer and not against the Appellant. It has been pointed out that here again the demand has been confirmed by the Respondent on the erroneous premise that the Appellant was the owner of the goods. 6.2 The Ld. AR (Additional Commissioner) has contended that as the Appellant had undertaken to pay duty during investigations, the investigating authorities did not identify who the actual carriers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by it but by ONGC and consequently the demand of duty has rightly been confirmed against the Appellant. 7.4 In my view the onus was on the revenue to establish as to who had actually filed the Bill of entry and had taken upon it the mantle of an importer. The Revenue having failed to discharge this burden, it was not open for the Revenue to draw an adverse inference against the Appellant and call upon it to prove the negative. I also take note of the fact that the Appellant has right from the stage of investigation itself clearly stated in no uncertain terms that ONGC was the importer, which fact has not been rebutted by the investigating authority. I therefore agree with Member (Judicial), that the demand of customs duty in respect of three consignments imported by sea cannot be fastened upon the Appellant. 8. The sixth question of difference is essentially whether in the facts and circumstances no duty was chargeable from the Appellant as held by Member Judicial or the duty was chargeable as held by Member Technical. 8.1 For reasons recorded in the preceding paragraphs, I am of the view that the Appellant not being the importer, as also the goods having been transshi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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