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TMI Blog2008 (2) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ere covered by a previous Division Bench Judgment of the same High Court in Writ Petition No. 1818 of 2002 [Pride Foramer v. Union of India]. 3. The principal issue that falls for consideration in this case is:- "Whether oil rigs engaged in operations in the exclusive economic zone/ continental shelf of India, falling outside the territorial waters of India, are "foreign going vessels" as defined by Section 2(21) of the Customs Act, 1962, and are entitled to consume imported stores thereon without payment of customs duty in terms of Section 87 of the Customs Act, 1962?" FACTS 4. The Appellants are engaged in drilling operations for exploration of offshore oil, gas and other related activities under contracts awarded by the Oil and Natural Gas Commission (for short, "ONGC"). The drilling operations are carried on at oil rigs/vessels, which are situated outside the territorial waters of India. Until around November, 1993, the Appellants, and all other similarly situated companies which were engaged in oil and gas exploration and exploitation were permitted to transship stores to the oil rigs without levy of any customs duty regardless of the fact whether oil rigs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office report reads thus: "Pursuant to Court's Order dated 13th May, 1999, it is submitted for the information of the Hon'ble court that Special Leave Petition (Civil) No.... of 1999 (D.No.6292 of 1997) was returned to the Advocate for the Appellant on 22nd April, 1997 for curing the defects but till date the same has not been re-filed despite this Registry's letters dated 24th May, 1999, 7th July, 1999 and reminder dated 24th February, 2000." Having regard to the failure of the appellants to do what was required to be done till date, the application for adjournment is refused. The appeals will go on. Learned counsel for the appellants says that he is not in a position to argue the matter. The appeals are dismissed with costs." 8. The Central Government issued Notification No. S.O. 429 (E) dated 18.07.1986 under Section 6(5)(a) and Section 7(6)(a) of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (for short, 'the Maritime Zones Act, 1976') by which certain areas were identified as "designated areas". The "designated areas" are more than 12 nautical miles away from the shore and are outside the territorial waters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons stated above, we are of the view that the respondents are perfectly justified in refusing to permit the petitioner to clear, ship stores and spares for use on the Oil Rig, on transshipment permit and without payment of customs duty while the Oil Rig is in a designated area. We also hold that the continental shelf land the exclusive economic zone are the parts of India in view of the provisions of sections 6(6) and 7(7) of the Maritime Zones Act and for the purposes thereof and pursuant to notifications referred to in para 26 (Supra) the provisions of the Customs Act, 1982 were extended to such areas, consequently, the Oil Rigs proceeding to such areas or operating therein are not foreign going vessels under section 2(21) of the Customs Act. If that is so, the petitioner is not entitled to the benefit of section 53 read with 54 and/or of section 86 r/w 87 of the Customs Act. In view of our view the petition must fail." 14. In the present case, Appellants imported the "stores" by air which landed at Sahara Airport. When they sought clearance to shift stores without payment of duty, the same was declined by the Revenue Authorities on 24.12.2001, by passing the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be appropriate to refer to the relevant provisions of the Constitution of India, Customs Act, 1962, Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 existing at the relevant time and the International Conventions and provisions thereof: - (I) "ARTICLE 1(3) OF THE CONSTITUTION OF INDIA provides that the " TERRITORY OF INDIA " shall comprise of- a. the territories of States; b. the Union territories specified in the First Schedule; and c. such other territories as may be acquired." (II) "SECTION 3(28) OF THE GENERAL CLAUSES ACT provides that: - "India" Shall mean- a. XXX XXX b. XXX XXX c. as respects any period after the commencement of Constitution all territories for the time being comprised in the territory of India." (III) SECTION 2(27) OF THE CUSTOMS ACT, 1962 defines " INDIA " as under:- "India" includes the territorial waters of India." This definition under the Customs Act is relevant for the purposes of the Customs Act only. RELEVANT PROVISIONS OF CUSTOMS ACT, 1962 SECTION 2(21) assigns the following meaning to the "FOREIGN GOING VESSEL OR AIRCRAFT": - "foreign-going ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eign-going vessel or aircraft." ARTICLE 297 OF THE CONSTITUTION OF INDIA as it originally existed was as under: - ARTICLE 297- "All lands, minerals and other things of value underlying the ocean within the territorial waters of India shall vest in the Union and be held for the purposes of the Union." Article 297 was amended in 1963 to include the words "or the continental shelf" after the words territorial waters. Article 297 was again amended in 1976 to read as under: - ARTICLE 297- "Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union: (1) All lands, mineral land other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone, of India shall vest in the Union and be held for the purposes of the Union. (2) All other resources of the exclusive economic zone of India shall also vest in the Union and be held for the purposes of the Union. (3) The limits of the territorial waters, the continental shelf, the exclusive economic zone, and other maritime zones, of India shall be such as may be specified, from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of India. The territorial waters and the continental shelf are traditional concepts in international Law and the national jurisdiction in these zones is well established. The concept of the exclusive economic zone which has been developed at the initiative of developing countries has gained acceptance of the international community of States. The concept of contiguous zone which is located within the exclusive economic zone and over which additional jurisdiction is claimed by coastal States has also been accepted by the international community of States. Provision has also been made in the Bill regarding the historic waters of India which are adjacent to its land territory and over which India has sovereignty. The limits of these waters such as the waters in the Palk Bay and the Gulf of Manaar, will be specified by the Central Government by notification in the Official Gazette. The limits of other maritime zones of India have been specified in the Bill itself. The Bill empowers the Central Government to alter, by notification in the Official Gazette, the limits of these maritime zones. It has been made clear that notifications for altering the limits as specified in the Bill shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A notification issued under this sub-section may provide for the regulation of entry into and passage through the designated area of foreign ships by the establishment of fairways, sealanes, traffic separation schemes or any other mode of ensuring freedom of navigation which is not prejudicial to the interests of India." 25. Central Government, has been authorized to extend the enactment for the time being in force in India to the continental shelf of any "designated area" on the continental shelf by issuing a notification under Section 6(6) which reads as under: - SECTION 6(6)- "The Central Government may by notification in the Official Gazette.- (a) extend, with such restrictions and modifications as it thinks fit, any enactment for the time being in force in India or any part thereof to the continental shelf or any part [including any designated area under sub-section (5)] thereof; and (b) make such provisions as it may consider necessary for facilitating the enforcement of such enactment,and any enactment so extended shall have effect as if the continental shelf or the part [including, as the case may be, any designated are under sub-section (5)] therof to which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y enactment for the time being in force in India or any part thereof in the exclusive economic zone or any part thereof; and b) make such provisions as it may consider necessary for facilitating the enforcement of such enactment,and any enactment so extended shall have effect as if the exclusive economic zone or the part thereof to which it has been extended is a part of the territory of India." 29. The relevant notifications issued under the Maritime Zones Act, 1976 are M.E.A. No: S.O. 429 (E) dated 18.07.1986 (effective since Jan. 15th 1987) and No. S.O. 643(E) dated 19.9.1996 which took immediate effect. 30. The text of notification no. No: 429 (E) dated 18.07.1986 is as under: - "S.O. 429 (E): - In exercise of the powers conferred by clause (a) of sub-section (5) of section 6 and clause (a) and sub-section (6) of section (7) of the Territorial Waters, Continental Shelf, Exclusive Economic Zones and Other Maritime Zones Act, 1976 (80 of 1976), the Central Government hereby declares the areas in the continental shelf or, as the case may be, in the exclusive economic zone of India where the installations, structures and platforms, the coordinates of which are given i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al shelf of India and the exclusive economic zone of India with effect from the date of publication of this notification in the Official Gazette for the following purpose namely - a) the prospecting for extraction of production of mineral oils in the continent shelf of India or the exclusive economic zone of India and b) the supply of any goods as defined in clause (22) of Section 2 of the Customs Act, 1962 in connection with any of the activities referred to in clause (a). Explanation: For the purposes of this notification "mineral oils" include petroleum and natural gas." INTERNATIONAL COVENANTS AND PROVISIONS THEREOF 34. In the Eleventh Session, on 30.04.1982, Conference adopted the draft Convention on the Law of Sea by the overwhelming majority of 159 States. The Convention on the Law of Sea known as United National Convention on the Law of Sea, 1982 (for short, "UNCLOS, 1982") has 320 Articles. They are divided into seventeen parts and nine annexures. It lays down rules for all parts and virtually all users of seas and oceans. The relevant clauses thereof are as under:- "Article 2 " Legal status of the territorial sea, of the air space over the territoria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstallations and structures; (ii) marine scientific research; (iii) the protection and preservation of the marine environment; (c) other rights and duties provided for in this Convention. 2. In exercising its rights and performing its duties under this Convention in the exclusive economic zone, the coastal State shall have due regard to the rights and duties of other States and shall act in a manner compatible with the provisions of this Convention. 3. The rights set out in this article with respect to the sea-bed and subsoil shall be exercised in accordance with Part VI. Article 57 - Breadth of the exclusive economic zone. The exclusive economic zone shall not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. Article 127 - Customs duties, taxes and other charges:- 1. Traffic in transit shall not be subject to any customs duties, taxes or other charges except charges levied for specific services rendered in connection with such traffic. 2. Means of transport in transit and other facilities provided for and used by land-locked States shall not be subject to taxes or charges higher than those levied f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing/loading outside India is absent in sub-clause (ii) of Section 2(21). 38. It is contended by him that the Appellants' are entitled to the benefit of the exemption under Section 86(2) read with Section 87 of the Customs Act, 1962 with regard to "stores" consumed on the oil rigs. Elaborating further, it was submitted that Chapter XI of the Customs Act, 1962 contains "Special provisions regarding baggage, goods imported or exported by post and stores". The expression "stores" is defined in Section 2(38). The goods imported by the Appellants are "stores". Section 87 contains statutory exemption with respect to the transshipment of stores. According to him, in order to claim the benefit of the exemption under Section 87 of the Customs Act, the following conditions must be fulfilled: - a) The imported goods must be stores; b) The stores must be consumed on a vessel or aircraft; c) The vessel or the aircraft must be a foreign-going vessel or aircraft; and d) The stores must be consumed during the period such vessel or aircraft is a foreign-going vessel or aircraft. 39. Where these conditions are fulfilled, a person is entitled to consume the stores without payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete when a ship moves out of the territorial waters of India. This is so even where the goods do not land in any place outside India. According to him, for the purposes of ascertaining whether there is an import or an export, the demarcating line is the territorial waters of India. A fundamental rule for ascertaining whether there has been an import or export of goods is to determine whether the goods have crossed into the territorial waters (for the purposes of import) or whether they have moved out of the territorial waters (for the purposes of export). 41. That the Maritime Zones Act, 1976 defines territorial waters of India, contiguous zone of India, continental shelf of India, exclusive Economic Zones of India, etc. Each of these concepts is distinct from one another and is carefully defined so as to eliminate any confusion of one concept with any other concept. Parliament recognizes the distinction and maintains the distinction in the Customs Act, 1962 as well. For instance, whereas "territorial waters of India" is used in Sections 2(21) and 2(27), the expression "contiguous zone of India" is used in Section 2(28) of the Customs Act. 42. It is further contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical miles. 44. It was contended that admittedly, the oil rigs are vessels and are carrying on operations more than 12 nautical miles from the shore of India. Hence, the oil rigs clearly answer the definition of a "foreign going vessel" carrying on operations outside the territorial waters of India, as defined under Section 2(21) of the Customs Act. It would be impermissible to read any words into the definition of "a foreign going vessel" or to substitute the words "territorial waters of India" with any other words. The effect of the High Court Judgment and the Respondent's submissions is to substitute the words "territorial waters of India" with the words "territory of India"/ "continental shelf of India"/"India" in sub-clause (ii) of Section 2(21). Such an exercise is impressible in law, particularly, in the case of a fiscal State. The subject vessels are foreign going vessels and fall within the plain language and meaning of the definition in Section 2(21) of the Customs Act. 45. That since, there has been no change in the definition of the expression "foreign-going vessel" in the Customs Act, and this definition continues to utilize the expression "outside the territ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued under the provisions of Sections 6(6) and 7(7) of the Maritime Zones Act, 1976 purports to extend the limits of the territorial waters. The territorial waters limit remains at 12 nautical miles and the limited sovereignty which can be exercised therein " for the purposes of exploration and exploitation of resources" does not result in the definition or meaning of territorial waters of India or foreign going vessel being changed. According to him, the Appellants' vessels would continue to be entitled to be classified as such and claim exemptions contained in the Customs Act as a consequence thereof. 48. That there is a clear distinction between the concept of (i) the territory of India and (ii) the deeming provisions regarding the extension of an enactment to designated areas and such areas being deemed to be a territory of India for the purposes of extension of law. In the former case, the territory of India is circumscribed by Article 1(3) of the Constitution. The designated areas are not the territory of India and do not fall under any of the clauses of Article 1(3). Apart from the Constitution not treating the designated areas as a part of the territory of India, such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exclusive economic zone. 51. The Customs Act extends to the whole of India and not simply to the territorial waters of India. Customs Act has no provision permitting determination of the maritime limit. For this purpose, one has to revert to the Maritime Zones Act, 1976. Hence, reference to the Maritime Zones Act, 1976 is inevitable, while considering any issue relating to maritime issues at that time. That Section 2(21) of the Customs Act cannot be read in isolation. The entire scheme of the Customs Act and other Acts which are in pari-materia have to be read together. 52. It was submitted that the Appellants' vessel may be a foreign going vessel, and may be carrying its operations outside the territorial waters (the term as understood under Section 3 of the Maritime Zones Act, 1976). Nevertheless, for all purposes, it is within the limit where the Coastal State has a sovereign right or power to enact or extend any law, and the exemption to a foreign going vessel will not be available under Sections 86 and 87 of the Customs Act. 53. Refuting the submissions advanced on behalf of the Appellants, it was submitted that the limit of the territorial waters is not ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Court in Pride Foramer's case (supra) would result in absurd situation. The Appellant wants the Court to read Section 2(21) of the Customs Act in isolation, which is not the correct approach. There is neither any substitution nor any attempt to read any provision of the Customs Act in a manner contrary to the intent and purport of the Act. The fact remains that even if it is a foreign going vessel, the stores are unloaded and consumed within the maritime boundary or within the limit of Customs Act, Section 12 will be attracted as it would be construed that there has been an import within the territory of India to which the Customs Act applies. 59. Refuting the contention of the Appellants that an attempt is being made to substitute the phrase appearing in the Customs Act contrary to its intention, it is submitted, has no basis. What the Appellants want is that for the present adjudication or cause, the Court should not look beyond Sections 2(21), 86 and 87 of the Customs Act and that it should not look into the other Acts. This may not be the right approach as it would undermine the power of the Parliament and the provisions of the Maritime Zones Act, 1976 would be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h inter alia provides that imported stores may, without payment of duty be consumed on the vessel as stores during the period such vessel is a foreign going vessel. 62. Applicability of Section 86 read with Section 87 depends upon the answer to the question: "Whether the oil rig operating in the designated area is a foreign going vessel?" Thus, entire issue centers around the interpretation of Section 2(21) of the Customs Act, which defines the "foreign going vessel" to mean any vessel engaged in the carriage of goods or passengers between any port in India and any port outside India whether adjoining any intermediate port or airport in India or not and it amongst others also includes vessel engaged in fishing or any other operations outside territorial waters of India, or, any vessel proceeding to a place outside India for any purpose whatsoever. 63. Contention advanced on behalf of the Appellant is that the oil rigs which are located in the exclusive economic zones and are beyond the territorial waters of India, would fall outside the territory of India and, therefore, the stores consumed on the oil rigs would be deemed to have been consumed by a foreign going vessel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India extends and has always extended to the territorial waters of India. Section 4 makes the position clear further as to the use of its territorial waters by foreign ships, i.e., all foreign ships (other than warships including sub-marine and under water vehicles) shall enjoy the right of innocent passage through the territorial waters which in turn means, the passage will be innocent so long as it is not prejudicial to the peace, good order or security of India. Section 5 defines the contiguous zone of India as that part of the sea which is beyond and adjacent to the territorial waters and the zone extends to a line which is 24 nautical miles of the coast. This Section specifically recognizes the competence of the Central Government to exercise such powers and take such measures as to consider necessary with respect (a) the security of India, and (b) immigration, sanitation, customs and other fiscal matters. Under Section 6(1) of the said Act, the continental shelf of India extends to a distance of 200 nautical miles from the baseline referred to in sub-section (2) of Section 3 where the outer edge of the continental margin does not extend upto that distance. Section 6(2) prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. The continental shelf of India comprises of the seabed beyond the territorial waters to a distance of 200 nautical miles. The exclusive economic zone represents the sea or waters over that continental shelf. From the reading of Sections 6 and 7 of the Maritime Zones Act, 1976, it is clear that in respect of the continental shelf and exclusive economic zone, India has been given only certain limited sovereign rights and such limited sovereign rights conferred on India in respect of continental and exclusive economic zone cannot be equated to extending the sovereignty of India over the continental shelf and exclusive economic zone as in the case of territorial waters. Sub-section (6) of section 6 and sub-section (7) of Section 7 of the Maritime Zones Act, 1976 empower the Central Government by notification to extend any enactment in force in India with such restrictions and modifications which it thinks fit to the continental shelf and the exclusive economic zone and further provides that an enactment so extended shall have effect as if the continental shelf or the exclusive economic zone to which the enactment has been extended is a part of the territory of India. Thus, sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he coastal States can exercise their right of search, seizure or confiscation of vessel for violation of its customs or fiscal or penal laws in the contiguous zone but it cannot exercise these rights once the delinquent vessel enters the high seas. It has no right of hot pursuit except where the vessel is engaged in piratical acts which are liable for arrest and condemnation within the sea for the jurisdiction over piracy since historical times has been recognized as universal in international law and any State may exercise that jurisdiction over a pirate irrespective of the usual considerations of territoriality which limit the penal jurisdiction. 71. With the adoption of UNCLOS, 1982, the legal incidents of the high seas have been partly modified. UNCLOS, 1982 is a comprehensive code on the international law of sea. It codifies and consolidates the traditional law within a single, unificatory legal framework. It has changed the legal concept of continental shelf and also introduced a new maritime zone known as exclusive economic zone. Exclusive economic zone is a new concept having several new features. What is significant for our purpose is that the coastal State has in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of other enactments. The coastal State has "sovereignty" over "territorial waters" but it has only sovereign rights over the continental shelf and the exclusive economic zone. The Customs Act extends to the whole of India and not simply to the territorial waters of India. Customs Act does not contain any provision permitting determination of the maritime limits. For this purpose, one has to revert to the Maritime Zones Act, 1976. Hence, reference to the Maritime Zones Act, 1976 is inevitable while considering any issue relating to maritime issues. 76. Appellants may be carrying on its operation outside the territorial waters, as understood under Section 3 of the Maritime Zones Act, 1976. Nevertheless, for all purposes, it is within the limit where the coastal State has a sovereign right or power to enact or extend any law, and the advantage to a foreign going vessel will not be available under Sections 86 and 87 of the Customs Act to such vessels. 77. The Counsel for the Appellants may be right in contending that the limits of the territorial waters has not been extended. The limits of territorial waters as defined in Section 3 of the Maritime Zones Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral excise duties under the Central Excise Act, 1944." 78. Similarly, in Circular No. 22/2002 dated 23.04.2002 [2002(142) ELT T20], the said notification i.e. S.O. 189 (E) has been clarified in para 3 as under: - "3. The implication of the said notification is that mineral oils extracted or produced in the EEZ and Continental Shelf of India if brought to the mainland shall not be treated as import and therefore, no customs duty shall be leviable on such mineral oils. Likewise, the goods supplied from the mainland to a place in EEZ or Continental Shelf of India in connection with any activity related to mineral oil extraction or production shall not be treated as export under the Customs Act, 1962 and consequently, no export benefits can be availed of on such supplies. Another implication of the said notification is that bringing of any goods from any other country to any place in EEZ or Continental Shelf of India in connection with any activity related to extraction or production of mineral oils shall be treated as import under the Customs Act, 1962 and would be charged to duty accordingly." 79. It may not be correct to contend that the oil rigs installed by the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lliam Trikard and Others [215 ITR 638] after considering Article 1 and Article 297 of the Constitution of India, the provisions of the Maritime Zones Act, 1976 and the provisions of the Income Tax Act which had been extended in the same way as has been extended in a similar manner as the Customs Act, came to the conclusion that the salary received by the assesses for the services rendered in India while working on the continental shelf/exclusive economic zone and other maritime zones shall be liable to tax under the Income Tax Act after the issuance of the notifications, extended the applicability of the Income Tax Act to the continental shelf and exclusive economic zones. Though in the said case, it was held that the salary income earned by the assessee prior to 01.04.1983 could not be charged to tax in the assessment year 1983-84 as the continental shelf and exclusive economic zone were not part of India prior to the issuance of the notifications by the Government of India extending the applicability of the Income Tax Act to continental shelf and exclusive economic zones. In the said case, the facts were, that the assessees were employees, during the assessment year 1983-84, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warehoused. The question with respect to the applicability of Sections 6 and 7 of the Maritime Zones Act, 1976 together with the notifications issued pursuant thereto were not considered at all. 85. By notification S.O. 429 (E) dated 18.07.1986, and notification S.O. 643 (E) dated 19.09.1996, issued under clause (a) of sub-section (5) of Section 6 and clause (a) of sub-section (6) of Section 7 of the Maritime Zones Act, 1976, the Ministry of External Affairs has declared certain areas in the continental shelf or, in the exclusive economic zone of India, where certain installations, structures and platforms of certain coordinates given in the Schedule are situated and the areas extending upto 500 meters from such installations, structures and platforms as "designated areas" for the purposes of Sections 6 and 7 of the Maritime Zones Act, 1976. The Ministry of Finance (Department of Revenue) by two corresponding notifications no. 11/87-Customs dated 14.01.1987 and 64/97-Customs dated 01.12.1997 issued under clause (a) of sub-section (6) of Section 6 and clause (a) of sub-section (7) of Section 7 of the Maritime Zones Act, 1976 have extended the Customs Act and Customs Tariff Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t duty and the ship employed for transshipment of the goods for that purpose would not be a foreign going vessel under Section 2(21) of the Customs Act. The area of discharge or unloading/loading is within India by virtue of the deeming provisions of Sections 6 and 7 of the Maritime Zones Act, 1976. The Customs Act stands extended to the designated areas by virtue of the Maritime Zones Act, 1976. The oil rigs carrying on operations in the designated area is not a foreign going vessel as the same would be deemed to be a part of Indian territory i.e. going from the territory of India to an area which also deemed to be part of the territory of India. 86. As stated above, contiguous zone is that part of the sea which is beyond and adjacent to the territorial waters of the coastal States. The coastal States though do not exercise sovereignty over this part of the sea, however, they are entitled to exercise sovereign rights and take appropriate steps to protect its revenue and like matters. The police and revenue jurisdiction of the coastal States is extended to the contiguous zone as well. 87. The question whether the Courts can look into the provisions of the international trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the same is in consonance with UNCLOS, 1982. 91. Article 127 of UNCLOS, 1982 deals with customs duties, taxes and other charges. Clause (1) provides that traffic in transit shall not be subject to any customs duties, taxes or other charges except charges levied for specific services rendered in connection with such traffic and Clause (2) provides that means of transport in transit and other facilities provided for and used by the land locked States shall not subject to taxes or charges higher than those levied for the use of means of transport of the transit State. According to this Article, where the goods are in transit to other country shall not be subject to any customs duties, taxes or other charges except for the charges levied for specific services in connection with such traffic. In other words, there is no prohibition for levying customs duties on the goods which are not in transit for onward transmission to any other country. If the goods are brought in only while proceeding to other country, then no customs duty can be levied. In all other cases, it seems to be permissible. 92. In the present case, as the goods were being taken to a territory which would be d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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