2020 (2) TMI 408 - HC - Customs

Classification of Survey Equipment on Vessel: Legal Disputes and Compliance Challenges

The Commissioner of Customs (Import-I) Versus Fugro Survey (Middle East) Ltd. (Formerly known as Racal Survey Overseas Ltd.)

The case involves disputes over the classification of survey equipment on board a vessel, the determination of the vessel as a survey vessel, and the ... Maintainability of appeal - Ocean going survey vessel or not - HELD THAT:- The appeal was admitted by the Supreme Court and when it came up for hearing, it was pointed out by the learned Counsel for the Appellant that appeal had to be filed in the High Court in view of section 130 of the Customs Act, 1962 and therefore, the appeal was dismissed giving liberty to the Appellant to approach the High Court. Hence, the present Appeal. Appeal admitted. Issues:1. Classification of survey equipment on board a vessel.2. Determination of vessel as a survey vessel.3. Classification of survey equipment as ship-stores.4. Validity of confiscation under Sections 111(f) and 111(1) of the Customs Act.5. Alleged violation of Section 30 for non-declaration of survey equipment as cargo.6. Relevance of ownership in determining eligibility of survey equipment as ship-stores.7. Evaluation of the order of the CESTAT regarding statutory violations.Issue 1: Classification of survey equipment on board a vesselThe primary issue revolves around determining whether the survey equipment carried on board a vessel is to be considered as import cargo or as an integral part of the vessel itself, thereby classifying the vessel as an ocean-going survey vessel. The Tribunal's decision on this matter is being challenged.Issue 2: Determination of vessel as a survey vesselAnother key issue is whether the vessel in question, named M. V. Sutton Tide, should be classified as a survey vessel despite evidence indicating that the survey equipment is intended to be off-loaded once its usage is complete. The vessel has been utilized for purposes other than surveying, such as ferrying passengers and goods, raising questions about its classification.Issue 3: Classification of survey equipment as ship-storesThe Tribunal's decision regarding the classification of survey equipment as ship-stores when lying loose or as part of the ship's fitments when affixed is under scrutiny. The interpretation of ship-stores in this context is crucial for determining the applicability of relevant regulations.Issue 4: Validity of confiscation under Sections 111(f) and 111(1)The legality of the confiscation under Sections 111(f) and 111(1) of the Customs Act, as determined by the adjudicating authority and subsequently challenged, is a significant aspect of the case. The Tribunal's ruling on this matter is being contested.Issue 5: Alleged violation of Section 30The issue of whether there was a violation of Section 30 of the Customs Act due to the non-declaration of the survey equipment as cargo during adjudication is being examined. Compliance with statutory provisions regarding cargo declaration is crucial in this context.Issue 6: Relevance of ownership in determining eligibility of survey equipmentThe relevance of ownership in deciding the eligibility of survey equipment to be classified as ship-stores or as part of the ship is a point of contention. The Tribunal's stance on this matter is being questioned for its legal validity.Issue 7: Evaluation of the CESTAT's orderLastly, the judgment involves an evaluation of the CESTAT's order, focusing on whether it was based on sufficient evidence and whether it adequately addressed the alleged statutory violations. The assessment of the CESTAT's decision forms a critical part of the overall legal analysis in this case.