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TMI Blog2008 (2) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... n order. 2. The appellants M/s. Danube Ocean Shipping Agency (in short M/s. DOSA) are the agents of M/s. Ukranian Danube Shipping Agency, Izmail Ukranie (in short M/s UDSA). M/s DOSA sold four lash barges bearing nos. DM-2230, DM-2220, DM-Y-1086 DM-2222 to the Appellants M/s. Bedi Shipping Ltd. vide Memorandum of Understanding dated 9-2-2006 for a total consideration of Rs. 60 lakhs. These barges were earlier brought into India as containers of import goods at Mumbai Port and for which M/s. DOSA had executed re-export bond with the Customs in terms of Notification 302/2-8-1976. 3. The Appellants did not disclose to the Customs Department either at Mumbai or Gujarat of the towing away of the barge Nos. DM-Y-1086 DM-2222 from Mumbai Port to Muldwarka. On the other hand, the Appellants filed two Bills of Entry No. C-8/20-11-96 C-9/20-11-96 in respect of the barge Nos. DM-2220 DM-2230 with the Jamnagar Customs brought by them to Jamnagar by a coastal vessel claimed classification under Chapter sub-heading 8901.90 of the Customs Tariff Act, 1985 claimed exemption under notification 36/96 dated 23-7-96. However, the Bills of Entry did not indicate the Bill of Lading N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urface Transport, New Delhi as the conditions under the letter of permission dated 21-3-1996 were not complied with by M/s. Bedi Shipping Ltd. including condition no. (ii) relating to the intimation indicating the flow of outgoing foreign exchange, which is in contravention of Para 156J of the export import policy 1992-97 read with Para 78 of the Hand Book of Procedures 1992-97 and is deemed to be in contravention of the prohibition imposed under Section 11 of the Customs Act, 1962 as applicable to Section 3 of the Foreign Trade (Development Regulation) Act, 1992. Thus, M/s. Bedi Shipping Ltd. M/s. DOSA and Shri Arvind Shah, Director of M/s. Bedi Shipping Ltd, had contravened Sections 42, 45, 46 47 of the Customs Act, 1962 inasmuch as the imported goods were removed from the custody of the Mumbai port to Muldwarka and Jamnagar without proper clearances or by absence of endorsement on the port clearance of the fishing boats, which have towed the barges and cleared the barges without filing a proper bill of entry. Thus, the barges boats were liable to confiscation and the Appellants liable to a penalty. As a consequence, the notice called upon the Appellants to show cause as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Customs Act, 1962. 9. Learned Advocates S/Shri V.S. Nankani and Naresh Thacker appearing for the Appellants M/s. Bedi Shipping Ltd. its Director submitted as under: (a) The Appellants purchased four barges from M/s. DOSA vide MOU dated 9-2-96 @ Rs. 15 lakhs per barge; (b) Pursuant to this MOU, the Appellants obtained the necessary permission from the Ministry of Surface Transport vide letter dated 21-3-1996 and certificate dated 28-5-96 from DG Shipping, Mumbai approving the said purchase at the price agreed between their clients and M/s. DOSA; (c) In respect of the two barges set out for Muldwarka, the Appellants had obtained the port clearance on 28-9-96. While in the case of the barges set out for Jamnagar, the barge numbers were mentioned on the port clearances dated 15-10-96 issued by the authorities, due to inadvertence, the barge numbers could not be mentioned on the former Port clearances certificates dated 28-9-96; (d) The four barges were seized on 27-11-96 23-12-96 respectively provisionally released on the execution of bank guarantee for Rs. 20 lakhs; (e) At the time of the entry of the barges into India, their import was allowed and the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they should be given the option to redeem the same upon payment of redemption fine and not M/s. DOSA. 10. The S.D.R. Mr Ajay Saxena, on the other hand, reiterated the findings of the Commissioner (Imports) and submitted that the order to confiscate the barges as well as imposition of the fines and the penalties was justified in view of the fact that the Appellants had not followed any of the provisions of the Customs Act, 1962 and also failed to follow the provisions of the policy, as is evident from the two show cause notices and hence the findings of the Commissioner (Imports) are correct and are required to be upheld. 11. We have carefully studied the rival submissions. At the outset, we find that the issue is whether the Appellants' action to clear the four barges was in contravention of the provisions of the Customs Act, 1962. The notices allege that the Appellants had violated the provisions of Sections 42, 45 47 of the Customs Act, 1962. 12. We find that Section 45 places a restriction on the custody and removal of imported goods. All imported goods, unloaded in a Customs area shall remain in the custody of the Commissioner of Customs until they are cleared fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Gujarat to Mumbai was only done in the fitness of things since the whole cause of action has arisen at the, Mumbai Port and since none of the formalities under the Customs Act, 1962 has been fulfilled, it would be difficult to hold that the towing of the barges from Mumbai to Jamnagar Muldwarka respectively was licit in nature. Therefore, we told that the entire exercise of towing the four barges without following the proper procedure laid down in Sections 45, 46 47 of the Customs Act, 1962 would result in confiscation of the same. We find that the barges which arrived at India were meant for re-export and for which M/s. DOSA had executed a Bond before the Customs. It is on record that even as on date there is no application from M/s. DOSA for de-bonding of the barges as the bond is still in force as on date. This means that in the record of the Mumbai Customs i.e. the proper officer, the four barges are in bond only. The evidences gathered so far reveal that neither M/s. DOSA nor M/s. Bedi Shipping Ltd. and other Appellants informed the proper officer of the Mumbai Customs about the sale of the barges in India and its consequent discovery in Muldwarka and Jamnagar. The wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... boats, perhaps the barges would have lost its identity forever. Thus, all the permissions etc. which the Appellants have referred to and relied upon in their submissions would not come to their rescue. Thus, this being the case, the barges are liable to confiscation, which has been correctly ordered by the Commissioner (Imports) and hence we see no reasons to interfere with the same. 15. We also find no answer from M/s. Bedi Shipping Ltd as to why only two bills of entry No. C-8/20-11-96 C-9/20-11-96 for import of two barges Nos. DM-2220 DM-2230 were filed at Jamnagar Customs, when all the four barges were originally berthed in the Mumbai Port and no Customs clearances undertaken. We also find that the Appellants have also not sought any written permission from the Mumbai Customs to permit them to file the bill of entry at Jamnagar instead of at Mumbai. Under the Customs Act, 1962, there is no provision to transport the imported goods to be suo motu taken on a coastal vessel within the territorial waters of India without complying with the Customs law and procedure. The whole scope of filing the bills of entry for two out of the four barges smacks of mala fide intention and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir dues. Nor intimation was given to the RBI for such proposed adjustment in relation to the sale proceeds of foreign property and that no application was filed with the Mumbai Customs for de-bonding of the said barges produced two valuation certificates certifying the value as US$ 70,000 each. Since the appellants failed to produce valid evidence of licit import of the barges, the barges valued at Rs. 15 lakhs each and seized on 23-12-96 are liable to confiscation. From the conduct of the Appellants, it is very clear that the Appellants had illicitly removed the four barges from the Port Area of Mumbai without the knowledge of the proper officer of Customs at Mumbai and, therefore, we uphold the order of the imposition of penalties and the confiscation ordered by the Commissioner. 16. The appellants have also made certain submissions with regard to the documents produced by them before the Gujarat Customs. In our view, this does not come to their rescue. The jurisdiction for the assessment of the goods under question is Mumbai and no matter how legal the documentation may be, yet by virtue of the Tribunal being a creature of the statute and considering the fact that the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserve that M/s. DOSA did not provide the relevant copy of the bill of lading, which is part of the Customs documentation under Section 46, of the Customs Act, 1962. Since the actual entry of the barges was meant to be part of the vessel, which would have any day sailed back for its next voyage across the ocean, the fact that the four barges were offloaded as per a MOU drawn behind the back of the proper officer of the Mumbai Customs coupled with the manner in the four barges were towed without the assessed bills of entry at Mumbai clearly indicts the Appellants. This being the position, we observe that there has been a substantial violation of the provisions of the Customs Act, 1962. Since the four barges have been cleared from the port area illicitly, the question of extending the benefits of any notification, policies etc. as sought to be done post clearances from the Mumbai port would be patently incorrect and as a result of which we hold that the Appellants are not liable to reap the benefits of any notification or a policy in force and the same are rejected. 18. In addition, as on the date when the barges were towed from the Mumbai Customs area, the same were in bond and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, Notification 302/76 is not applicable as far as M/s. Bedi Shipping Ltd. are concerned. 20. Next is the applicability of Notification No. 36/96 dated 27-7-96. We are inclined to accept the findings of the Commissioner (Imports) at Para No. 8 of the impugned order that at the time of the import of barges in India on 26-6-95, the notification was not in force and hence the benefit of this notification cannot be extended to the two barges for which the Appellants M/s. Bedi Shipping Ltd had filed the two bills of entry at a later date. Thus, the Appellants' reliance upon the judgment of the Hon'ble Supreme Court in the case of Associated Cement Company v. Commissioner [2001 (128) E.L.T. 21 (S.C.)] has no place here as the facts are clearly different and the barges are yet under bond meant for re-export. We accordingly reject the contention. 21. Next is the applicability of Notification 133/87. In the instant case; the barges were initially meant for re-export and for which we find that there is a bond executed by M/s. DOSA. However, it is on record that the barges were towed away illicitly for home consumption on 28-9-96 and 15-10-96 respectively as can be seen from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation) Act, 1992. The importer also contravened the provisions of Section 14 of the Customs Act, 1962 as they failed to declare the correct value of the barges as mentioned in the valuation certificates. Further, M/s. DOSA were not eligible to the exemption Notification No. 36/96 dated 27-7-96 in the bills of entry filed by them as the notification was not in force at the time of import to India on 26-6-95. 23. In view of the above, we are inclined to uphold the order and we agree with the Adjudicating Authority's findings and the reasonings that the barges are liable to confiscation. Since, the barges have been cleared from the Mumbai Port without filing the bills of entry and without completion of other formalities, and barges being restricted item as per the policy, the whole process of sale of the barges is ab initio void. This being the legal position, we are unable to concur with the view of the learned Advocates that by virtue of the sale of the barges, the Appellants M/s Bedi Shipping Ltd are required to exercise the option of redemption. In view of the above legal position, we reject the same and hold that the option of redemption is required to be exercised by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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