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TMI Blog2008 (8) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... notice and adjudicate the same to demand duties on goods imported, assessed and cleared on assessment orders of the proper officer of Customs working in the Bombay Customs House." 3.The learned Tribunal after considering the various contentions held that the Commissioner (Preventive) had rejected the objections as to lack of jurisdiction on the ground of certain decisions of the Tribunal which held that the jurisdiction of the Commissioner of Customs (Imports), Mumbai and that of the Commissioner of Customs (Preventive), Mumbai was concurrent and, therefore, whatever the Commissioner of Customs (Imports), Mumbai could do could also be done by Commissioner of Customs (Preventive). The learned Tribunal held that they do not accept this reasoning as the concurrent jurisdiction of Customs (Preventive) and Commissioner of Customs (Imports) would be confined to areas of the Port of Mumbai and districts of Maharashtra as notified, over which both the Commissioner of Customs (Imports) as well as the Commissioner of Customs (Preventive) had jurisdiction. However, in respect of the designated locations in the Exclusive Economic Zone (EEZ), no such concurrent jurisdiction exists or has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area of 300 kms. from the limits of Brihan Mumbai. It is submitted that the entire policing of this area is done by the Commissioner (Preventive) who is incharge of the anti-smuggling operations in Mumbai along with Coast Guards and the State Police. Learned Counsel has placed reliance on the Administrative set up of the Mumbai Customs taken from the official web-site which sets out three Customs Zones in the Mumbai Customs, and the Commissioner (Preventive) finds place in the third zone headed by the Chief Commissioner of Customs, Mumbai-III. The functions indicated therein indicate as under :- Commissioner of Customs (Preventive), Mumbai Customs House"(ix) : Anti-smuggling work in the Mumbai, Thane & Raigad districts. The Rummaging & Intelligence Wing of the Commissionerate in Mumbai covers the Docks, Mumbai Harbour, Sahar Airport and Mumbai City. The Marine and Preventive Wing of the Commissionerate covers the 220 Kms. long coastlines in the coastal districts of Thane and Raigad and also carries out joint operations with Navy, Coast Guard and Police." It is submitted that a doubt has been raised about the implication of specific mention of the Designated Area as being within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and cleared on assessment orders of the proper officer of Customs in the Bombay Customs House. Reliance is placed on various provisions of the Customs Act, to contend that considering the provisions of the Customs Act, the various notifications issued thereunder as also the provisions of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act (hereinafter referred to as the Territorial Waters Act) that there is no infirmity in the finding of the learned Tribunal and consequently on this point alone the Appeal is liable to be rejected. 7.At the outset we may point out that we have heard Counsel only on the point of issue of jurisdiction considering the finding recorded by the CESTAT and we propose to deal with that issue as that goes to the root of maintainability of the Appeal itself. 8.The Rig was detained on 12th May, 2001 and a show cause notice dated 7th August, 2003 was served upon the 1st respondent. As per the show cause notice at the time of issuance of the seizure memo, the said rig was located at SI Platform at 19o 38' 28" N and 71o 17' 31" E. A few other facts. The Respondent No. 1 M/s. Noble Asset Company Limited, incorporated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India under the provisions of the Territorial Waters Act, 1976. It is the submission on behalf of the respondents that on perusal of both the Notifications it will be demonstrated that the location 19o 38' 28" N and 71o 17' 31" E is not a designated area. Hence the said Rig when seized was in international waters and as such as it was situated within a non-designated area in the Continental Shelf and EEZ of India, neither the Commissioner of Customs (Imports) had jurisdiction over the designated areas in the Continental Shelf and EEZ of India nor the Commissioner of Customs (Preventive) assuming that he has jurisdiction over any part of the EEZ, had jurisdiction to seize the said Rig or to issue show cause notice and decide upon the same. On this factual aspect on behalf of Revenue, it is sought to be submitted that the Rig was seized from a designated area and it appears to be a mistake showing it in a non-designated area. We do not propose to answer the said issue as we propose to first dispose of the issue as to whether the Commissioner of Customs (Preventive) had jurisdiction in respect of a designated area in the EEZ. 10.To answer the issue we may firstly refer to some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentation and dispose of the same. Therefore, considering Sections 2(34), 4, 5 and 28 of the Customs Act it is only the proper officer assigned those functions by the Board or Commissioner of Customs who alone can exercise the powers in the matter of confiscation of goods. In other words it is such officers who can exercise jurisdiction. The power has to be exercised in terms of Section 124 by the proper officer of customs by giving a notice in writing with the prior approval of the officer of Customs not below the rank of a Deputy Commissioner of Customs and complying with the other provisions. 11.We may now refer to Notification No. 27/97-Cus. (N.T.), dated 7th July, 1997. This is a Notification issued in exercise of the powers conferred by sub-section (1) of Section 4 of the Customs Act, 1962 whereby the Central Government has appointed officers to be Commissioner of Customs, Deputy Commissioner of Customs and Assistant Commissioner of Customs for the area mentioned in corresponding entry under Column No. (2) of Table with effect from the date of publication of the Notification by the Central Government in the Official Gazette. We shall refer to Serial Nos. 1, 2 and 5 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omic Zone of India, power has also been conferred on the Commissioner of Customs (Airport & Air cargo) Chennai, Port (Import), Chennai, Port (Export), Chennai for the designated areas in the Continental Shelf and the Exclusive Economic Zone of India as declared by the Government of India from time to time. It is, therefore, relevant to note that the Commissioners have been notified for the designated areas in the Continental Shelf and Exclusive Economic Zone of India on the East as also the West Coast. 12.Considering the provisions of the Customs Act and the Notifications it would be clear that in so far as designated areas in the EEZ and continental shelf concerned, under Section 4 of the Customs Act the Government of India has appointed Officers for the designated Zones and once Proper Officers have been appointed for the designated zone it would mean the exclusion of the power of the other officers who have not been so designated. In Commissioner of Sales Tax, U.P. v. Sarjoo Prasad Ram Kumar, (1976) 37 S.T.C. 533 the issue was assessment under U.P. Sales Tax Act. The assessee was carrying on business in Sector III for which sector there was a separate Assistant Sales Tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d articles attracting customs duty in any part of India. This contention was rejected. Our attention was also invited to the statutory interpretation by F.A.R. Bennion, Butterworths, 1984 to the following :- "In some cases the Act conferring jurisdiction does so in affirmative terms, leaving it to be inferred that what is not expressly given by the Act is to be taken as withheld. An example is the legislation setting up the Lands Tribunal. In Essex County Council v. Essex Incorporated Church Union (1963) AC 808, it was held by the House of Lords that the parties could not consent to give the Tribunal a jurisdiction not within the words of the Act." On a reading of the provisions of the Act itself read with Sections 4 and 2(34) and Section 28 as also Section 124 it is only the proper officer notified for that area who could exercise the powers under the Act and to that extent the Commissioner (Preventive) Mumbai would have no jurisdiction. 13.The submission, however, on the part of Revenue is that the area in the EEZ where the vessel was seized would fall within the extended area of Thane District and that being so in terms of the Notification the Commissioner (Preventive) could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and fuel ("spares" for short) and transshipment thereof for being used on Oil Rigs carrying on operations in the designated areas be allowed to be consumed as stores thereon, without payment of customs duty, treating it as foreign going vessel while it was operating on the designated area of the "Economic Zone". The petitioner there had argued that the rig operating at designated areas of EZ would be operating outside the territorial waters. The said rig would be a foreign going vessel entitled to the benefit of non-payment of duty and consequently entitled to consumption of imported goods without payment of customs duty while operating in designated areas. This contention was rejected by the High Court which held that the designated areas in the EZ were part of India and hence the rig operating in the designated area was not a foreign going vessel and the spares is to be used on the rig were liable to customs duty. It would thus be clear that considering the ratio of the judgment in Pride Foramer (supra) that the issue involved in this Appeal as to jurisdiction of the Commissioner of Customs (Preventive) based on notification issued under Section 4 of the Customs was not in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the territorial sea is exercised subject to this convention and to other rules of International law. Breadth of the territorial sea extends to 12 nautical miles, measured from base lines determined in accordance with this Convention. There is then what is known as Contiguous Zone where instead of exercising sovereignty the coastal State may exercise the control necessary to: (a) present infringement of its customs, fiscal, immigration or sanitary laws and regulations within its territory or territorial sea; (b) punish infringement of the above laws and regulations committed within its territory or territorial sea. The contiguous zone may not extend beyond 24 nautical miles from the baselines from which the breadth of the territorial sea is measured. We have then what is known as Exclusive Economic Zone which extends beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. In so far as Exclusive Economic Zone it is specifically made clear that this is subject to the rights and jurisdiction of the coastal States and the rights and freedoms of other States are governed by the relevant provisions of this Convention. In so far as the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aws of the Sea nor to the exclusive rights in the EEZ. Considering Article 297 and Article 1 of the Constitution, it will be clear that the territorial waters, Contiguous Zone, Continental Shelf and EEZ are not part of the territory of India but India exercises sovereign rights in respect of the territorial waters, on the continental shelf and also certain sovereign rights within the EEZ. In A.M.S.S.V.M. & Co. (supra) the Madras High Court referred to various commentaries on International Laws of the Sea. From the commentaries referred to, it is clear and as observed in Oppenheim's International Law, where the learned Author had added "that the territorial waters are as much inseparable appurtenances of the land as are the territorial subsoil and atmosphere." Messrs Higgins and Colombos on International Law of the Sea have in respect of the right of a State over its maritime belt and observed as under :- "With some it is an actual ownership ('dominium') because it implies in certain cases an exclusive enjoyment very characteristic of ownership, especially in the matter of fishing and pilotage; others treat it as a right of limited sovereignty conferring only a right of jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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