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TMI Blog2024 (12) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... bilizing of the vessel and recovery of the containers - that turned out to be cause for controversy. Her salvage is entrusted to M/s Smit Salvage BV, Netherlands and M/s Smit Singapore Pte Ltd and, for re-floating, it was but natural for several consignments of 'salvage' equipment to be delivered to consignee who, in the present circumstances, was none other than 'Master of MSC Chitra', c/o M/s JM Baxi & Co, Mumbai, for deployment through M/s MSC Mediterranean Shipping Company SA, bareboat charterer, acting for the salvers. It is common ground that these goods were transferred under escort from airport, and port, of arrival to the vessels - both of Indian flag and foreign flag - that were involved in adjusting the centre of gravity of the listed vessel and its restoration as conveyance. 2. Ship 'stores' for 'foreign going vessel', which is nothing but those not being 'coastal vessel', are 'zero rated' for duty liability, by special law of chapter XI ensconced in Customs Act, 1962 with specific substitutions of the normal under the authority of section 88 of Customs Act, 1962, to the extent conforming to '2. Definitions. - In this Act, unless the context otherwise requires xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sheva between August 2010 and February 2011, impugned is order [ order-in-original no. 48/2022-23/CC/NS-GEN/CAC/JNCH dated 1st November 2022 ] of Commissioner of Customs (NS- General), Jawaharlal Nehru Customs House, Nhava Sheva confirming demand of Rs. 2,50,68,363 under section 28 of Customs Act, 1962, along with applicable interest under section 28AA of Customs Act, 1962, confiscation of the goods valued at Rs. 10,26,09,460 under section 111(n) and 111(o) of Customs Act, 1962 which were offered for redemption on payment of fine of Rs.1,02,00,000 under section 125 of Customs Act, 1962, while imposing penalty of like amount under section 114A of Customs Act, 1962 on M/s JM Baxi & Co besides penalties under section 112 and section 114AA of Customs Act, 1962 on S/Shri Vijayan Chrisostem D'souza and Anshu Sahai. 5. Strangely, we note that both orders have sanctified recovery under section 28 of Customs Act, 1962 by recourse to '12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to 'transit and transhipment' which, in the context of 'stores', is to be deemed as those on board only. He further contended that MSC Chitra was not 'foreign going vessel' but 'wreck' only which, in terms of section 21 of Customs Act, 1962, is to be accorded treatment as goods and not as vessels. He placed reliance on the decision of the Hon'ble High Court of Bombay in Khanbhai Essofbhai v. Union of India [1989 (41) ELT 239 (Bom)]. He contended the impugned goods were deployed on vessels other than the distressed ship and that these were not 'foreign going vessels' entitled to exemption from duty on 'ship stores' in chapter XI of Customs Act, 1962 and that certificate of 'some captain', in his words, did not suffice for evincing placement on board MSC Chitra. Reliance was placed on statements recorded from the individual appellant and e-mail communications to submit that transhipment permits had been erroneously sought for and had been at the insistence of the other individual appellant. 9. We are constrained to note that the submissions of Learned Authorized Representative are on specific aspects of specific provisions of Customs Act, 1962 such as 'transhipment' and 'stores' - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of appellants, it was argued that neither were requisite inasmuch as the impugned goods, with appropriate permissions, had been moved beyond taxable jurisdiction by licit entry coupled with deployment on vessels whose entitlement to 'duty less' placement had neither been the subject of adjudicatory notice nor examined to place the confirmation of demand, on goods that had not been cleared for home consumption, beyond the pale of section 28 of Customs Act, 1962. 11. That the goods had not been subjected to duty liability is not in controversy. That the goods had been escorted out of respective customs stations to place beyond is not in question even as their not being intended for foreign shores and, thereby, required to conform with '(18) "export", with its grammatical variations and cognate expressions, means taking out of India to a place outside India; (19) "export goods" means any goods which are to be taken out of India to a place outside India; ' of section 2 of Customs Act, 1962 is not disputed. According to the adjudicating authority, acknowledgement of receipt by consignee and placement on board was necessary to qualify as 'stores' with lack thereof requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re special provisioning in section 54(3) of Customs Act, 1962. Customs Act, 1962 does not envisage operation of levy of duty therein except on goods cleared for home consumption or statutorily deemed to have been removed for home consumption. 14. The shipment of the impugned goods from 'customs station' of arrival under escort, to the 'accident site' is not in dispute. Furthermore, by placement on board the transferring vessel, the acceptance thereof by the consignee, or by M/s JM Baxi & Co, for placement on board, and not as 'export goods', suffices, in the circumstances of salvage, for acknowledgement as 'stores' at that point in time. The case of Revenue turns on the factual matrix of grounded vessel not being bound for any place outside India, deployment of equipment on salvage craft that, too, were not bound for any place outside India and of not having been received the master of MSC Chitra as exclusion of purview of 'stores' and, therefore, liable to be charged to duties of customs. We note a fatal flaw in the first of the considerations that actuated the adjudicating authority inasmuch as 'sauce for the goose is sauce for the gander'; discard of privilege of 'stores' owing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a law to feed the insatiable appetite of tax monster. Such legislation is outside the competence of customs authorities who are entrusted with assessment and levy of duties on goods cleared for home consumption or deemed, by specific provision in law, to have been. Procedural prescriptions do not empower levy of duty on goods that pass through the national territory. 17. Notice for recovery of duty under section 28 of Customs Act, 1962 has been issued to M/s JM Baxi & Co, and by recourse to ingredients that are founded on alleged complicity on the part of importer. An importer, in circumstances of non-discharge, or short-payment, of duty liability is the 'person chargeable to duty or interest', the intended noticee under the empowerment of Customs Act, 1962. The records do not suggest that M/s JM Baxi & Co are so liable within the meaning of '(26) "importer", in relation to any goods between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be importer;" in section 2 of Customs Act, 1962. The expression 'person chargeable to duty' is not defined in the statute and, even 'Section 148. Liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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