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of <h1>Court rules vessel buyers not importers, exempt from customs duty & procedures under Customs Act.</h1> <h3>CHAUDHARY INDUSTRIES Versus UNION OF INDIA</h3> CHAUDHARY INDUSTRIES Versus UNION OF INDIA - 2012 (281) E.L.T. 216 (Guj.) Issues Involved:1. Applicability of customs duty on a confiscated vessel purchased in an auction.2. Requirement to follow customs procedures under Section 46 of the Customs Act, 1962.3. Interpretation of the terms of the tender notice, specifically conditions 10 and 11.4. Legal status of the vessel as 'imported goods' and the petitioners as 'importers.'Detailed Analysis:1. Applicability of Customs Duty on a Confiscated Vessel Purchased in an Auction:The petitioners challenged the communication dated 31-12-2001, which directed them to follow customs procedures and pay customs duty under Chapter CTH 8908 for the vessel M.V. GLORIA KOPP. The petitioners argued that as per the tender notice conditions, especially condition no. 11, no customs duty was payable on the confiscated vessel sold by the Customs Authority, Chennai. The court found that the vessel was sold as a confiscated item, and thus, no customs duty was leviable as per the tender conditions.2. Requirement to Follow Customs Procedures Under Section 46 of the Customs Act, 1962:The petitioners contended that they were not required to follow the procedures under Section 46 of the Customs Act, 1962, as they were not importers of the vessel but purchasers of a confiscated item. The court agreed, stating that the vessel was not imported by the petitioners but was sold to them as a property of the Central Government. Therefore, the petitioners were not required to follow the customs procedures prescribed under Section 46 of the Act.3. Interpretation of the Terms of the Tender Notice, Specifically Conditions 10 and 11:The tender notice issued by respondent No. 5 included conditions that taxes and duties would be charged as per the TNGST Act, but no customs duty would be charged on the sale value of the confiscated vessel. The court noted that the petitioners had complied with these conditions, including the payment of sales tax. The court held that the terms of the tender notice were clear and binding, and thus, no customs duty was applicable.4. Legal Status of the Vessel as 'Imported Goods' and the Petitioners as 'Importers':The court examined the definitions under the Customs Act, 1962, including 'goods,' 'import,' 'imported goods,' and 'importer.' It concluded that the vessel, having been confiscated and vested in the Central Government, was not imported by the petitioners. Therefore, the vessel could not be considered 'imported goods,' and the petitioners could not be considered 'importers.' Consequently, the petitioners were not liable to pay customs duty or follow the customs procedures under Section 46 of the Act.Conclusion:The court quashed the communication dated 31-12-2001, which required the petitioners to pay customs duty and follow customs procedures. The vessel was sold as a confiscated item by the Central Government, and the petitioners were not importers. Therefore, the customs duty was not applicable, and the petitioners were not required to follow the procedures under Section 46 of the Customs Act, 1962. The petition was allowed, and the rule was made absolute.
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