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TMI Blog2021 (12) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... d order is in error for concluding so after withholding permission to amend the manifest. Confiscation under section 111(f) of Customs Act, 1962, as well as attendant penalty on the appellant-directors under section 112 of Customs Act, 1962, is unwarranted. Alleged undervaluation in the declaration pertaining to Nancy 3 for which, in addition to quantification of duty liability, the vessel has been confiscated under section 111(m) of Customs Act, 1962 - HELD THAT:- Conceptual commotion is manifest in this salmagundi of statutory provisions invoked by the Commissioner of Customs; while finalizing assessment, in exercise of authority conferred under section 18 of Customs Act, 1962 on the proper officer , the duty so assessed has been ordered for recovery under section 28 of Customs Act, 1962. It is also seen from the record that, by the time the bill of entry was permitted to be filed on 27 th November 2009, the appellant-company had, on 31st October 2009 deposited ₹ 45,00,000 as the estimated duty liability on the payment of US$ 1,020,000 effected to the seller against two invoices which was appended to the bill of entry - it would appear that full value of both invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants Mr R K Dwivedy, Additional Commissioner (AR) for the respondent ORDER Under challenge in this appeal of M/s Bombay Launch Services Pvt Ltd against order-in-original no. 67/2011/CAC/CC (I)/SHH/Gr.VB dated 26th September 2011 of Commissioner of Customs (Import), Mumbai is the finding of mis-declaration of value, by non-inclusion of certain elements of cost incurred for the import of two tugs, Nancy 3 and Greenville 11, and of attempt to import Nancy 3 without declaration. The confiscation of Nancy 3 under section 111(f) and 111(m), with option for redemption on payment of fine of ₹ 1,20,00,000, along with the holding of Greenville 11 as liable to confiscation under section 111(m) of Customs Act, 1962, and redetermination of assessable value of Nancy 3 and Greenville 11 at ₹ 5,59,77,957 and ₹ 3,09,92,067 with consequent duty liability of ₹ 53,71,177 and differential duty of ₹ 4,91,352 (over and above ₹ 24,11,055 paid at the time of import) respectively under section 28 of Customs Act, 1962, besides the charging of applicable interest under section 28AB of Customs Act, 1962, and imposition of penalty of ₹ 58,62,529 under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 2009 that the steamer agent sought amendment of the manifest to include the vessel itself as cargo though Memorandum of Agreement had been entered into as early as 26th September 2009 and invoices for US $ 8,00,000 and US $ 2,20,000 had been raised on 1st October 2009 by M/s MLC Carriers Pte Ltd towards purchase price (CIF) and mobilisation cost to be borne by the appellant-company. 5. The amendment sought by M/s Atlantic Shipping Pvt Ltd was not taken up for consideration till the remitting of duty liability of ₹ 45,00,000 and till the provisional release of the vessel was sought upon furnishing bank guarantee of ₹ 15,00,000 by the appellant-company and of ₹ 8,00,000 by the steamer agent. During the examination of the tug on 3rd December 2009, it was also noticed that, during her dry docking in August of that year, the vessel had been repainted and refurbished with addition of equipment and parts which was appraised at 15% of the declared value. 6. The culmination of the proceedings for redetermination of value was based on the mobilization advance paid for the conveying of Nancy 3 and the estimated cost of painting/refurbishing as well as the additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of the carrier till the goods are landed. Chapter VI of Customs Act, 1962, relating to conveyance and person-in-charge of conveyance, has been designed for this purpose. Conveyance, according to (9) includes a vessel, an aircraft and a vehicle in section 2 of Customs Act, 1962 and it is not controverted that Nancy 3 has not been proceeded against as conveyance but as goods , which according to (22) includes (a) vessels, aircraft and vehicles; in section 2 of Customs Act, 1962 and, though not applicable to every voyage, it is when procured just as goods are. It is this distinction that differentiates the dual aspect of vessels, as both conveyance and goods, and the occurrence, though infrequent, provided for in the statute that has been latched on to by the adjudicating authority to render the finding of section 30 of Customs Act, 1962 having been breached for justifying confiscation under section 111(f) of Customs Act, 1962. 9. It is not in dispute that Nancy 3 was declared as conveyance en route from Colombo to Singapore. It has been contended that the possession of Nancy 3 was transferred only after arrival at Mumbai which, commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged undervaluation in the declaration pertaining to Nancy 3 for which, in addition to quantification of duty liability, the vessel has been confiscated under section 111(m) of Customs Act, 1962 and, while ordering finalization of provisional assessment, has also invoked the liability to penalty under section 114A of Customs Act, 1962. Conceptual commotion is manifest in this salmagundi of statutory provisions invoked by the Commissioner of Customs; while finalizing assessment, in exercise of authority conferred under section 18 of Customs Act, 1962 on the proper officer , the duty so assessed has been ordered for recovery under section 28 of Customs Act, 1962. It is also seen from the record that, by the time the bill of entry was permitted to be filed on 27 th November 2009, the appellant-company had, on 31st October 2009 deposited ₹ 45,00,000 as the estimated duty liability on the payment of US$ 1,020,000 effected to the seller against two invoices which was appended to the bill of entry. Hence, it would appear that full value of both invoices were declared in the entry, made under section 46 of Customs Act, 1962 and, thus, precluding any scope for suggesting, let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signified by relevant date which is intended, inter alia, to operate from the date of finalization of provisional assessment under section 18 of Customs Act, 1962. The final recourse cannot be the first option. Hence, the recovery of duty of ₹ 53,71,177 cannot be held to be sustainable as demand under section 28; we are constrained to examine this aspect as duty liability discharged on value declared in the invoices is short by ₹ 8,71,177 attributable to the assessment on the additional 15% by which the value was ordered to be enhanced. 13. We find that the enhancement of declared assessable value is based on examination of the vessel and the reported improvements and additions during dry docking in August 2009. There is nothing on record to suggest that this work was undertaken at the instance of the appellant-company or that the cost, even if accurately estimated, was borne by, or on behalf of, the appellant to justify inclusion in assessable value. In the statement relied upon in the impugned order, and in which it has been the admitted that US$ 1,020,000 was paid, there is no reference to the cost of drydocking having been charged from them. Furthermore, a cas ..... 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