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TMI Blog2018 (3) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute that after necessary certification by the proper authorities, the new vessel SV Shivam commenced sailing on foreign voyage and there is no dispute of the fact that the ship stores transferred earlier had been used in the said vessel on board as prescribed under Section 87 of CA, 1962. Merely because as on the date of transfer of ship stores to the newly built vessel SV Shivam, which was not ready for voyage, the transfer of ship stores under Section 86 and later consumed on board as per Sec. 87, becomes incorrect and duty could be recovered on the ship stores, cannot be sustained. Appeal allowed - decided in favor of appellant. - Appeal No. C/150,180/2010-SM - Final Order No.A/ 10417-10418/2018 - Dated:- 28-2-2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed with interest and penalty and also the ship stores transferred from MSV Sundaram to SV Shivam was directed to be confiscated with an option to redeem the same on payment of fine of ₹ 5,00,000/-. Aggrieved by the said order, they filed appeal before the Ld. Commissioner (Appeals), who in turn, partly allowed the Appeal to the extent of setting aside the penalty and confiscation, but upheld the demand of duty. Aggrieved by the said order of confirmation of duty, assesse is in appeal; whereas the Revenue has challenged the Order of the Ld. Commissioner(Appeals) for setting aside the confiscation and penalty. 3. Ld. Advocate for the appellant Sh. H.D. Dave, has submitted that the transfer of stores from their old vessel MSV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational equipment. The vessel being new was not surveyed by Indian Registry of Shipping and no clearances was accorded to the said vessel for sailing. Thus, the said vessel was not commissioned to carry the goods or passengers. Hence, the vessel Shivam has not attained the status of foreign going vessel within the meaning of Section 2(21) of the Customs Act, 1962. It is his contention that as regards consumption of stores which comprises of navigational equipment, safety equipment and diesel etc., it cannot be denied that diesel was consumed for running generator, moreover the navigational and safety equipment were used on day to day basis when the vessel was stationary. He has vehemently argued that merely because the vessel after its comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and any port or airport outside India, whether touching any intermediate port or airport in India or not, and includes - (i) any naval vessel of a foreign Government taking part in any naval exercises; (ii) any vessel engaged in fishing or any other operations outside the territorial waters of India; (iii) any vessel or aircraft proceeding to a place outside India for any purpose whatsoever SECTION 86. Transit and transhipment of stores. (1) Any stores imported in a vessel or aircraft may, without payment of duty, remain on board such vessel or aircraft while it is in India. (2) Any stores imported in a vessel or aircraft may, with the permission of the proper officer, be transferred to any vessel or aircraft as st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uffice if the vessel later undertakes foreign voyage and the Ship stores transferred to it is consumed on board as per Sec.87 of the Customs Act,1962. It is not in dispute that after necessary certification by the proper authorities, the new vessel SV Shivam commenced sailing on foreign voyage and there is no dispute of the fact that the ship stores transferred earlier had been used in the said vessel on board as prescribed under Section 87 of CA,1962. Merely because as on the date of transfer of ship stores to the newly built vessel SV Shivam, which was not ready for voyage, the transfer of ship stores under Section 86 and later consumed on board as per Sec. 87, becomes incorrect and duty could be recovered on the ship stores, cannot be su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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