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TMI Blog2024 (6) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... ed separately. The whole case is based on the interpretation of coastal run only for the reason that the tug has first gone to Nhavasheva there after Fuzerah UAE then it came to Alang for clearance as tug for breaking up. On the identical facts this Tribunal has considered the case of COLLECTOR OF CUSTOMS, AHMEDABAD VERSUS SHIPPING CORPORATION OF INDIA LTD. [ 1986 (12) TMI 216 - CEGAT, BOMBAY] wherein issue has been decided in favour of the assessee by holding that ' The fact that to begin with the respondents themselves had applied for conversion of the vessel as a coastal vessel cannot be held against them as estoppel once they realised their mistake in view of the High Court judgments and took remedial action in time. The point that Customs duty was demanded by the officers at this port or that is hardly material.' From the above decision and the facts involved therein, it can be seen that the facts of the present case is also identical to above decision. Therefore, Ratio of the above decision is applicable in the present case. The impugned order is not sustainable - Appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Vikas Mehta, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly paid duty of Rs. 7,09,716/- by challan dated 17.09.2009. Being aggrieved by the final assessment order the appellant filed an appeal before the Commissioner (Appeal) vide the impugned order which was rejected. Therefore, the present Appeal filed by the appellant. 2. Shri Vikas Mehta, Consultant Appearing on behalf of the appellant submits that Adjudicating Authority has grossly misconstrued definition of coastal cargo under the provisions of Chapter-XII of Custom Act 1962. 2.1. He submit that the tug namely Hurricane-III had only been imported for breaking purpose and not for any furtherance commercial business purpose. The Government statutorily provided the specific entry under the Custom Tariff Act, 1975, under the chapter sub heading 8908.00 of the Custom Tariff Act, Tariff Entry read as 8908.00- Vessels and other floating structures for breaking up. 2.2. He submits that when any old and used ship is being imported for breaking purpose the whole remaining stock either consisting various kinds of bunkers, provision stores, various accessories / parts of the ship, imported for breaking purpose. These types of goods consisting only one and use ship wholly classified under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the Bunker must be assessed for the purpose of breaking up hence on Bunker and other goods duty cannot be demanded separately. The whole case is based on the interpretation of coastal run only for the reason that the tug has first gone to Nhavasheva there after Fuzerah UAE then it came to Alang for clearance as tug for breaking up. In this regard we find on the identical facts this Tribunal has considered the case of Shipping Corporation of India Limited (Supra) wherein issue has been decided in favour of the assessee, the relevant order is reproduced below :- 7 . We have carefully considered the submissions made on both the sides and perused the records of the case. The short point for our consideration is whether the vessel, Anupama, at the relevant time can be considered as a foreign going vessel . 8 . In order to answer the above question, it would be necessary to set out certain relevant facts. The vessel Anupama arrived in India loaded with fertilizers from Protis (Sicili). She discharged the entire cargo at Bhavnagar by 26-9-1975. According to the Department after the discharge of the cargo there was a request to revert to coastal trade and the vessel did revert to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 to 13-10-1,975 it cannot be said that it reverted to coastal trade. The cargo brought by super-tankers which are called as mother vessels were transported by M.V. Anupama to coastal ports till it sailed back to Aden via Kakinada. There was not even an allegation that the vessel was engaged in transportation of Indian cargo to any of the Indian ports before it sailed to Aden. The Calcutta High Court as well as Madras High Court in the two decisions referred to above on identical facts have held that the voyage performed by daughter vessels should be treated as a continuation of the voyage of the mother vessel and therefore the daughter vessel should be treated as a foreign going vessel. 11 . Before the Calcutta High Court arguments similar to the arguments advanced by Shri Pal were addressed. It was contended that the vessel Nancy Dee was not a foreign going vessel within the meaning of Section 2(21) since at the relevant time she was carrying goods from one port, i.e. Paradip in India to another port in India, i.e. Kidderpore Docks. It was also urged that under Section 2(21) the character of the vessel for the time being was relevant and not the character of the goods. It was fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals referred to above also took a similar view. The relevant observation in the judgment reads the vessels, which brought wheat and mile, indisputably were foreign vessels owned or operated by foreign shipping companies, they could not be berthed in the port premises themselves for the purpose of unloading. They, therefore, employed daughter vessels. These daughter vessels could not be treated in any way different from the foreign vessels from which cargo had to be discharged. The daughter vessels were only a means adopted or used in order to enable the discharge of the cargo on land. The supplies made from the bonded stock should, therefore, in substance and in truth be taken to be supplies made to foreign vessels. If that be so, as we think it was the case, no customs duty would be leviable . 13 . The ratio of the decisions of the Calcutta High Court as well as Madras High Court applies to the facts of the present appeal. The contention of the Department that it is the character of the vessel and not the character of the goods that is relevant for deciding the question as to whether a vessel is a foreign going vessel or not is not a correct proposition in law. A foreign going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erted to the coastal trade even if it continues to be idle in the coastal waters . 15. On a careful consideration of all the aspects, we reject this appeal and discharge the review show cause notice issued by the Government of India. 16 . [per : Shri K.S. Dilipsinhji, M(T)]. - I have given the utmost consideration to the order drafted by Brother Hegde which is based on the judgments of the Hon ble Calcutta and Madras High Courts. However, for the reasons to be recorded hereafter I am not able to persuade myself to subscribe to the points of view held by Brother Hegde. Hence this dissenting order. 17 . The facts of the appeal and also the facts of the case and the arguments of the appellants and the respondent have been incorporated in paras 1 to 6 of the order drafted by Brother Hegde. 1 adopt them for reference and therefore I see no need for repeating them. The main question for consideration in the appeal of the Collector of Customs, Ahmedabad before this Tribunal is the levy of duty on stores imported by M.V. Anupama which arrived at Bhavnagar on 19-7-1975 and which reverted to coastal trade on 26-9-1975 as per the request of the Shipping Agents M/s J.M. Baxi Co. at Bhavnagar. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coastal run. Therefore, the facts of the present appeal are distinguishable from the cases considered and decided , by the Honourable Madras High Court. So far as the present appeal is concerned, the stores of M.V. Anupama were imported into India when she arrived at Bhavnagar on 19-7-1975. Under Section 12 of the Customs Act, goods imported into India are chargeable to duties of Customs unless otherwise provided under the Customs Act. The ships stores are covered within the definition of the term goods under Section 2(22)(b) of the Customs Act and the stores were imported into India as defined under Section 2(23) when the Anupama arrived in Bhavnagar on 19-7-1975 from a foreign port. Therefore, there is no doubt that in terms of Section 12 the duty on stores of M.V. Anupama becomes leviable from the moment she arrived at Bhavnagar on 19-7-1975. In fact, under the same definition of the term goods the vessel M.V. Anupama is also treated as goods and duty is attracted on her. However, M.V. Anupama being a foreign vessel, the levy of duty on her is exempted under Notification No. 262/58-Cus, dated 11-10-1958. But the benefit of such an exemption is not available to the stores of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable on the stores imported and consumed on board the Nancy Dee or supplied ex-bond to the vessel at the Indian ports. In coming to the aforesaid decision, the Hon ble High Court observed that it was not necessary that the foreign voyage for bringing goods from a port outside India to a port in India should be completed by one ship. Besides the Hon ble Calcutta High Court was guided by the fact that the shipping was of two categories; (i) coastal and (ii) foreign. The Hon ble High Court further observed that the Nancy Dee was not required to have and did not have a licence for coastal trading as per the letter of the solicitors of M/s Turner Morrison Co. Ltd. who were the appellants before the High Court. The High Court further E.L.T. that the Government of India s contract for import of the foodgrains was a composite one and the entire journey from a foreign port to the port of destination in India was one journey for carriage of imported goods. Since the super-tankers could not physically enter the ports by reasons of their size and weight, they-required the services of the daughter vessel. They unloaded the cargo into the Nancy Dee and the Nancy Dee carried the goods to the por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be equated to Coastal Trade for the purposes of the Customs Act. The ports in Pakistan, Burma or Ceylon are not Customs ports within Section 2(12) of the Customs Act, nor can the Continent of India under the Merchant Shipping Act be held as coterminous with India as defined under Section 2(27) of the Customs Act. Besides, it is possible that the super-tankers and the Nancy Dee were chartered by the Government of India and in that case the Nancy Dee would not have required the licence for coasting trade. Therefore, the absence of a licence for the coasting trade of India under the Merchant Shipping Act is not relevant for determining as to whether a ship is a foreign going vessel under the Customs Act. This apart, there is no contention advanced by the agents or owners of the Anupama that she had or did not have a licence for coasting trade under Section 407 of the Merchant Shipping Act, 1958. Therefore, the judgment of the Calcutta High Court in the case of M/s Turner Morrison Co. Ltd. can be distinguished from the present appeal of the Collector of Customs, Ahmedabad. Furthermore, I am to observe that in coming to the aforesaid finding, the High Court was deciding a question befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -4-1977, the Shipping Corporation of India Ltd. in their letter, date4 20-6-1977 addressed to the Assistant Collector of Customs, Bhavnagar stated that the Anupama waited at Bombay as it was decided to engage her for lightening cargo brought by the super bulk carriers expected to arrive at Salaya immediately thereafter. It is therefore legitimate to infer that the vessel left Bombay for Salaya for the aforesaid purpose. It is not known whether on this voyage also the Anupama carried any goods from Bombay to Salaya. At Salaya, the Anupama acted as a daughter vessel to the super-tankers. Therefore if the Departmental instructions were to be extended to the Anupama, it would mean that she carried transhipment cargo from Salaya to other ports. In that event also the Anupama is not eligible to the concession for not charging the duty on her stores as envisaged in the departmental instructions quoted by the Appellate Collector in his Order, dated 29-12-1979. 21 . Relying on the judgments of the Madras and Calcutta High Courts, the respondents have laid great stress on the argument that the voyages of the Anupama as a daughter vessel to the three super-tankers Motilal Nehru, Rajendra Pras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly in that sense, the daughter vessel could be said to be continuing the voyage of the mother ship. The Anupama s services in that sense cannot be considered as services of a daughter vessel to the mother vessel. The super-tankers Motilal Nehru and Rajendra Prasad arrived at Salaya while the third super-tanker jhansi Ki Rani arrived at Paradip. These details are available from the letter No. 026/Inventory/193 dated 25-19-1979 of the Shipping Corporation of India Ltd. addressed to the Assistant Collector of Customs, Bhavnagar. As per this letter, the Anupama carried the cargo from the super-tankers off Salaya to Marmagoa and Calicut. Therefore, the Anupama did not bring the foodgrains from the super-tankers anchored at the roads off Salaya to the port of Salaya which could be said to be a continuation of the voyages of the super-tankers. The voyages of the super-tankers ended at Salaya as seen from the records. Possibly after discharging the foodgrains at Salaya, the Motilal Nehru and Rajendra Prasad left for different ports other than Marmagoa and Calicut. The Anupama, on the other hand, carried transhipment cargo from Salaya to Marmagoa and Calicut. The voyages of the Anupama the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad is to be rejected as held by M(J) or allowed as held by M(T). Sd/- (K. Gopal Hegde) Member (Judicial) Sd/- (K.S. Dilipsinhji) Member (Technical) Bombay, 2-9-1986 25 . Per K.L. Rekhi CD-BOM-A No. 365/80. - The matter has been assigned to me by the President under Section 129C(5) of the Customs Act, 1962 for hearing and disposal on the aforesaid point of difference. The judgments recorded by my learned brothers of the West Regional Bench were made available to both sides before the hearing. I have heard them at Bombay today. The Department was represented by Shri G.D. Pal, S.D.R. and the respondents by Shri J.J. Bhatt, Advocate. 26. I have given the matter my earnest consideration. The question is whether during the period from 26-9-1975 to 17-1-1976 the vessel M.V. Anupama was a foreign going vessel or a coastal vessel. During this period, the vessel functioned as a daughter vessel to lighten the mother vessels (super-tankers) which had brought cargo from abroad and which, because of their big size, were unable to come alongside of Indian ports. I find that even if the cargo lightened off Salaya was unloaded at Marmagoa and Calicut and not at Salaya. itself, and that ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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