Tribunal confirms vessel confiscation & penalties under Customs Act, 1962

The Tribunal upheld the confiscation of the vessel M.V. Minnath and its stores, along with the imposition of redemption fines and penalties for mis-declaration of goods under the Customs Act, 1962. The duty demand on the vessel was confirmed as legal, but the confiscation of stores as smuggled goods was not supported. Non-compliance with customs procedures for foreign-going vessels undergoing repairs in India led to the upheld confiscation and penalties. Appeals were dismissed except for one, which directed re-quantification of duty and fine, with any excess amount to be refunded by the original authority.

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Issues Involved:
1. Confiscation of the vessel and stores.
2. Imposition of redemption fine and penalties.
3. Mis-declaration of goods and duty demand.
4. Compliance with customs procedures for foreign-going vessels undergoing repairs in India.

Issue-wise Detailed Analysis:

1. Confiscation of the vessel and stores:
The Commissioner ordered the confiscation of the vessel M.V. Minnath and the stores found on the vessel, allowing redemption on payment of fines. The vessel was seized under Section 110 of the Customs Act, 1962, on the belief that it was liable for confiscation under Section 111 of the Customs Act, 1962. The search revealed discrepancies between the declared and actual quantities of diesel, paint, and thinner on board, leading to the conclusion that these items were illegally removed and liable for confiscation.

2. Imposition of redemption fine and penalties:
The Commissioner imposed a redemption fine of Rs. 6,00,000/- for the vessel and Rs. 1,00,000/- for the stores. Additionally, penalties were imposed: Rs. 50,000/- on the vessel M.V. Minnath, Rs. 10,000/- on the Master of the vessel, and Rs. 50,000/- on M/s. Coastal Shipping Links (I) Pvt. Ltd. under Section 112(a) and 112(b) of the Customs Act, 1962. The Tribunal upheld these penalties, stating they were justified based on the evidence of mis-declaration and illegal removal of goods.

3. Mis-declaration of goods and duty demand:
The Tribunal found that the vessel had mis-declared the quantities of diesel, paint, and thinner, which were significantly higher than declared. The Commissioner’s observation that the mis-declaration was intended for illegal diversion of goods was upheld. Consequently, the duty demand of Rs. 6,65,072/- on the vessel was confirmed as legal and proper. However, the Tribunal found no evidence to support the confiscation of the stores as smuggled goods, thus, only the duty for mis-declared quantities was justified.

4. Compliance with customs procedures for foreign-going vessels undergoing repairs in India:
The appellant argued that the vessel was treated as a foreign-going vessel and complied with customs formalities, including submitting various declarations and obtaining Entry Inwards. The Tribunal noted that the vessel was brought for repairs and should have been declared as an item of import in the IGM, as per Section 2(22) of the Customs Act, 1962. The Circular No.16/2012-Cus. dated 13.6.2017 clarified that vessels for repair must file IGM and Bill of Entry, which was not done in this case. The Tribunal upheld the Commissioner’s order of confiscation and penalties based on non-compliance with this requirement.

Conclusion:
The Tribunal dismissed appeals No. C/27023/2013 and No. C/27024/2013, upholding the confiscation, duty demand, and penalties imposed by the Commissioner. However, appeal No. C/27022/2013 was partly allowed, directing re-quantification of duty and fine, and appropriation from the deposits made by the appellant. The original authority was instructed to refund any excess amount following due procedure.

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