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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 ..... rrence that precluded inclusion in national legislation - 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. 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 - In the absence of any fastening of obligations of levy or fiscal consequences on the principal, through empowerment under section 28 of Customs Act, 1962, it cannot be held that the noticee intended by law is the agent. In the absence of any evidence that the impugned goods have remained behind for domestic use, and without any reason to discard the transformation, by delivery and use thereof in salvage of foreign going vessel , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (38) stores means goods for use in a vessel or aircraft and includes fuel and spare parts and other articles of equipment, whether or not for immediate fitting; xxxxx of Customs Act, 1962. There is no statutory controversy over goods landed in India being cleared for home consumption under section 47 of Customs Act, 1962, being warehoused under chapter IX of Customs Act, 1962 for clearance as such, or after manufacture, as provided for in section 68 of Customs Act, 1962, export as such, or after manufacture, as provided for in section 69 of Customs Act, 1962 and for transit or transshipment , as provided for in section 86 of Customs Act, 1962, of stores. There is no factual controverting that the impugned goods did leave the shores of India or that these had literally vanished by the time that the notices leading to the impugned orders came to be issued. Customs authorities were of the view that the salvage equipment , even as being beyond the sphere of chapter XI of Customs Act, had neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 time being in force, on goods imported into, or exported from, India. xxxxx which, pertaining, as it does, to one of the two limbs of assessment under section 17/section 18 of Customs Act, 1962 the other being valuation in terms of section 14 of Customs Act, 1962 and, thereby offering recourse to section 28 of Customs Act, 1962 with section 47 of Customs Act, 1962 as the catalyst, implies that the dispute is about rate of duty only. We also note that the first of the orders has invoked two penalising provisions against M/s JM Baxi Co while the latter has declined to invoke section 112 of Customs Act, 1962 owing to exclusion thereby in section 114A of Customs Act, 1962 which may have stemmed from amendment therein. 6. The contours of the controversy rest upon the proposition of Revenue that presumption of duty liability under Customs Act, 1962, subject to exemptions, inheres in goods landed in India and not exported therefrom. The appellants, per contra, suggest that the circumscribing effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the submissions of Learned Authorized Representative are on specific aspects of specific provisions of Customs Act, 1962 such as transhipment and stores both of which are compartmentalized in the context of reference without taking into consideration that a vessel may, during voyage, require replenishment of stores which, to the extent of carriage by another conveyance for whom it will not be stores , are goods till arrival and movement to the consuming vessel. These are procedural provisions subsidiary to the principal object of the statute, viz., levy and collection of duties of customs and to be deployed towards that end. To suggest that stores are to be used only in a vessel is too simplistic a perspective of navigation and engineering required to keep a craft afloat and mobile on the oceans. The decision in re Khanbhai Essofbhai had nothing to do with Customs Act, 1962, except insofar as Bombay Port Trust (as it then was) had indicated the petitioner therein to be liable to discharge such duties of customs as may be levied from Bombay Port Trust on the vessel that once was having turned into a wreck, or the dispute before us inasmuch as the decision referred to section 21 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , acknowledgement of receipt by consignee and placement on board was necessary to qualify as stores with lack thereof requiring process initiated by section 50 of Customs Act, 1962 to be taken to its logical conclusion to avoid the detriments proposed in the show cause notice. 12. This is not a case of goods manufactured in India and, as intended for export, not discharged liability to duties of central excise but, owing to inability to evince proof of export, now obliging the manufacturer to make good the foregone revenue; that emerges from a liability to levy attaching to the goods which stands assessed but, owing to intent of cross-border movement, not paid. This is not a case of importer having warehoused the goods and, thereby, not immediately obliged to discharge liability but, being unable to establish either availability of goods or evidence of export thereof, liable to make good the foregone amount on expiry of warehousing period which flows from assessment effected on import. Contrarily, the consignments were not imported but transshipped, and though not landed as stores for transfer as stores , with alteration of character from goods to stores which is not precluded by c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty inasmuch as sauce for the goose is sauce for the gander ; discard of privilege of stores owing to immobility of the vessel should have extended to discard of privilege of export for all containers on board and no evidence of such rescinding of let export order is before us. That a stranded vessel ceases to be conveyance of goods is a proposition supported by any legal authority and it is only on reversion of conveyance to goods , and by the registration authority, that the cargo and stores on board cease to be exports with consequent retraction of clearance under section 51 of Customs Act, 1962. In any case, as far as stores are concerned, application of section 88 of Customs Act, 1962 relegates territorial destination to irrelevance. 15. The other two of the considerations supra are linked. The destination of the impugned goods was, and as stores for, MSC Chitra to be deployed for refloating her. The consignee was Master of MSC Chitra ; it appears that the adjudicating authorities considered that to be the person employed by the ship owner to traverse the seas which, in normal circumstances, would have been correct. However, under the laws of salvage, it is the salvage master w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efined in the statute and, even Section 148. Liability of agent appointed by the person in charge of a conveyance.- (1) Where this Act requires anything to be done by the person in charge of a conveyance, it may be done on his behalf by his agent. (2) An agent appointed by the person in charge of a conveyance and any person who represents himself to any officer of customs as an agent of any such person in charge, and is accepted as such by that officer, shall be liable for the fulfilment in respect of the matter in question of all obligations imposed on such person in charge by or under this Act or any law for the time being in force, and to penalties and confiscations which may be incurred in respect of that matter. of Customs Act, 1962 does not enlarge the scope of the said expression to incorporate an agent, responsible only for fulfilling obligations imposed on the person in charge of conveyance , including confiscation and penalties thereof. In the absence of any fastening of obligations of levy or fiscal consequences on the principal, through empowerment under section 28 of Customs Act, 1962, it cannot be held that the noticee intended by law is the agent. 18. In the absence ..... 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