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TMI Blog2017 (4) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... (I) Pvt. Ltd. to the extent of 6,65,072/- is also legal and proper. The confiscation of the stores and consequent, demand of duty and the redemption of 1 lakh is not justified because the Revenue has not produced any evidence on record to show that it is a smuggled goods and it is also a fact that after the repair, the vessel left along with stores. In this context, the Revenue can only demand duty for mis-declaration as there was some discrepancy in the stores declared by the Master of the vessel and the actual store recovered. Even though the vessel was carrying 6180 litre of diesel, 1045 litre of paint and 225 litre of thinner, only 5627 litre of diesel, 280 litre of paint and 80 litre of thinner were declared by the vessel. Therefore, as per the Commissioner, actual quantities of import appeared to have been mis-declared with the object of implementing a predetermined scheme of subsequent illegal diversion of the goods. In my opinion, the appellants are liable to pay the duty with regard to the excess quantity not declared by them. With regard to imposition of penalty of 50,000/- on the vessel M. v. Minnath, representative of M/s. Coastal Shipping Link (I) Pvt. Ltd. and the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sea Blue Shipyard Limited, Vypeen. On 20.10.2012, verifications conducted on board the said vessel revealed that the said vessel was of Maldives registry and was on foreign run from Male to Cochin. It was seen that the said vessel had filed a Nil IGM No. 2046672 dated 17.10.2012, that the declared purpose of arrival of the vessel was 'dry dock repair' and it had arrived at the said shipyard on 19.10.2012. 2.1 Further verifications revealed that 5,900 liters of diesel oil had been smuggled out of the ship in the night of 19.10.2012 and that 724 liters of paint, 140 liters of thinner and 80 liters of hardener were removed from the vessel immediately prior to the arrival of Customs officers on board the vessel in the morning of 20.10.2012. 2.2 A search was therefore conducted on board the vessel which resulted in the recovery of 321 liters of paint and 85 liters of thinner. On verification of the declaration made by the vessel in the store list filed with the Custom House it was noticed that the quantity of paint on board exceeded the declaration by 41 liters and the quantity of thinner by 5 liters. 2.3 A search was thereafter conducted in the premises of M/s. Sea Blue ship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging to this line have been calling at Customs Port as a matter of routine for the past few years for repairs in the private non bonded shipyard belonging to Cochin Port. The details of such vessels which have availed these facilities at Cochin Port Drydock belonging to Cochin Port have been given by the appellant. He further submitted that when M/s. Sea Blue Shipyard, Vypeen, Cochin wanted to offer this facility to this line on vessels, on their enquiry with the customs about the formalities to be complied with, the Assistant Collector of Customs in his letter dated 13.5.2010 addressed to them, informed them the conditions for a Foreign Flag Vessel to be complied for conducting repair works. He also submitted that the conditions stipulated were that the vessel will have to be converted to a coastal run and bonds sealed and duty paid on stores consumed till reversion, duty has to be paid on these scrap generated during repair and the custom officer will have to be posted round the clock on overtime payment to satisfy the work till completion. He placed the letter of the Assistant Commissioner on record. He also submitted that the vessel MV Minnath arrived at Cochin on 19.10.12 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign going vessel and imposition of redemption fine and penalty are contrary to the established practice followed in respect of the vessels of this line entering the port for repair from foreign destination. In fact it means to discouraging the shipyards in India undertaking repairs to foreign vessels employing local technical personnel for same and incidentally earning foreign exchange for the country. He also submitted that the steamer agent had submitted a letter dated 17.10.2012 for posting Customs Officer as usual for supervision on board for all the repair operation and inventory of stores for conversion from foreign run vessel to coastal run. He also submitted that the vessel and the stores have all along been under the customs custody and control and the vessel after repair was allowed to leave the port with stores within 15 days. He further submitted that even if import duty is leviable, the vessel and the store are eligible for drawback of duty paid up to 98% of the duty and hence the net effect of duty would be 2% of the import duty and this will be substantially less than the duty claim in the impugned order and consequently, the fine and penalty will be proportionat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ELT 305 (Tri.-Mumbai) 6. After considering the submissions of both the parties and perusal of the material on record, I find that the impugned order to the extent of confiscation of the vessel M.V. Minnath under Section 111(f), 111(g) and 111(h) of the Customs Act is justified and its release on payment of redemption of the vessel on payment of ₹ 6,00,000/- under Section 125 of the Customs Act 1962 is justified and legal. Similarly, the confirmation of duty demand on the vessel M.V. Minnath represented by Steamer Agent, M/s. Costal shipping Link (I) Pvt. Ltd. to the extent of ₹ 6,65,072/- is also legal and proper. Further, in my view, the confiscation of the stores and consequent, demand of duty and the redemption of ₹ 1 lakh is not justified because the Revenue has not produced any evidence on record to show that it is a smuggled goods and it is also a fact that after the repair, the vessel left along with stores. In this context, the Revenue can only demand duty for mis-declaration as there was some discrepancy in the stores declared by the Master of the vessel and the actual store recovered. In para 21 of the impugned order, the learned Commissioner has obse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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