Tribunal sets aside duty demand on vessel, denies benefit of Notification No. 94/96, and rules against joint confirmation.

The tribunal set aside the impugned order and allowed the appeals. It held that Cochin Customs lacked jurisdiction to demand duty on the vessel, as it did not qualify as a foreign-going vessel during the disputed period. The appellants were denied the benefit of Notification No. 94/96 due to improper import procedures. Additionally, the tribunal ruled that the joint confirmation of duty on different parties was not legally valid.

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Issues Involved
1. Whether the impugned vessel MV Darya Manthan is a foreign-going vessel in terms of Section 2(21) of the Customs Act, 1962.
2. Whether the appellants are entitled to the benefit of Notification No. 94/96.
3. Whether the Commissioner of Customs, Cochin has jurisdiction over the import which initially occurred at the port of Paradeep on 11.6.2011.
4. Whether the vessel MV Darya Manthan is liable to pay duty on being used for coastal run at Cochin for the period 28.1.2012 to 28.2.2013.
5. Whether the Commissioner of Customs was right in holding that separate proceedings for demand of duty and seizure of the vessel MV Darya Manthan can be initiated.
6. Whether the Commissioner of Customs was correct in confirming the duty liability jointly on different parties.

Detailed Analysis

1. Whether the impugned vessel MV Darya Manthan is a foreign-going vessel in terms of Section 2(21) of the Customs Act, 1962.
The appellants argued that MV Darya Manthan is a foreign-going vessel as per Section 2(21) of the Customs Act, 1962, which includes vessels engaged in operations outside the territorial waters of India. However, the tribunal found that during the disputed period, the vessel was engaged in dredging operations within Indian territorial waters. The appellants failed to provide definitive proof that the vessel proceeded beyond Indian territorial waters. Therefore, the tribunal held that the vessel could not be treated as a foreign-going vessel during the impugned period.

2. Whether the appellants are entitled to the benefit of Notification No. 94/96.
The appellants claimed that the vessel should be treated as re-imported and thus eligible for benefits under Notification No. 94/96-Cus, which allows duty to be charged only on repair or maintenance costs. However, the tribunal found that the import and export activities were not recorded, and no Bills of Entry or Shipping Bills were filed. The tribunal upheld the Commissioner’s observation that the vessel was not imported through a due process and thus did not qualify as re-imported cargo. Consequently, the appellants could not claim the benefit of the notification.

3. Whether the Commissioner of Customs, Cochin has jurisdiction over the import which initially occurred at the port of Paradeep on 11.6.2011.
The tribunal found that the vessel was first imported at Paradeep Port, where it was converted from foreign run to coastal run. The tribunal noted that Cochin Customs did not have jurisdiction to demand duty on imports made at Paradeep Port. The tribunal cited the case of Samsung Maritime Ltd., which held that a Commissioner at one port does not have jurisdiction over imports at another port. Therefore, the tribunal concluded that Cochin Customs had no jurisdiction to demand duty on the vessel.

4. Whether the vessel MV Darya Manthan is liable to pay duty on being used for coastal run at Cochin for the period 28.1.2012 to 28.2.2013.
The tribunal observed that the vessel continued to be in coastal run throughout the period and that duty could not be demanded for different periods based on changes in lessees. The tribunal found that the duty was demanded under a Notification issued in 2012, which was not retrospective. The tribunal held that the demand for duty for different periods was not justified and lacked legal backing.

5. Whether the Commissioner of Customs was right in holding that separate proceedings for demand of duty and seizure of the vessel MV Darya Manthan can be initiated.
The tribunal found that the Commissioner’s decision to initiate separate proceedings for confiscation and penalty by Paradeep Customs while demanding duty by Cochin Customs was incorrect. The tribunal held that demand and confiscation proceedings could not be initiated in a truncated manner and that Paradeep Customs should have taken action if any violation occurred.

6. Whether the Commissioner of Customs was correct in confirming the duty liability jointly on different parties.
The tribunal found that the joint confirmation of duty on different parties without specifying the exact amount payable by each noticee had no legal sanctity. The tribunal held that such an order was not enforceable and thus set aside the impugned order on this ground as well.

Conclusion
The tribunal set aside the impugned order and allowed the appeals with consequential relief, if any, as per law. The tribunal held that Cochin Customs had no jurisdiction to demand duty on the vessel, the vessel could not be treated as a foreign-going vessel, and the appellants were not entitled to the benefit of Notification No. 94/96. The tribunal also found that the joint confirmation of duty on different parties was not legally enforceable.

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