2022 (1) TMI 223 - HC - Customs

Customs Authorities lack jurisdiction to confiscate vessel & goods under Customs Act, 1962. Vessel deemed 'goods in transit.'

The court held that the Customs Authorities did not have jurisdiction to confiscate the vessel and goods under the Customs Act, 1962. It determined that ... Foreign Vessel in transit - Confiscation - While the vessel was fishing on the high seas at Yemen, it was abducted by its own crew members and brought it near the territorial waters of India - according to the petitioner, penalising the petitioner for criminal acts done without his knowledge after abducting his vessel is highly arbitrary and unjust - HELD THAT:- The abduction and bringing into India of a foreign vessel by its crew illegally, without the knowledge of its owner, cannot amount to import or be liable to customs duty as contemplated under the Act, unless the same is used for consumption in India. If the vessel and the goods that came with it are intended by the owner to be taken back to the flag State of the vessel, the bringing into the country can only be regarded as in the course of transit if it is mentioned in the import manifest or report. In the light of the submission made on behalf of the petitioner that the vessel or the goods would not be used in India and on an appreciation of the proved facts, as evident from the impugned order, even in the absence of the import manifest, the conveyance and the goods in the said conveyance could at the most be regarded as in transit and not liable to be imposed with customs duty or subjected to confiscation. The impugned order of confiscation reveals that the customs duty and confiscation have been imposed and ordered as per Ext.P1 and Ext.P2 in a mechanical manner, without bearing in mind the fact that it was not the volition of the owner of the vehicle to bring the vessel or the goods into India. To penalise the owner of the vessel, when admittedly he had no knowledge of the alleged ‘bringing into India’ of the vessel or the goods in it, in the context of the factual situation emerging in this case, is, to say the least, too harsh, arbitrary and not contemplated under law. The order of confiscation issued as per Ext.P1 shall stand set aside - while setting aside Ext.P1 and Ext.P2 orders, the respondents are directed to handover custody of the vessel and the goods in it, to the petitioner forthwith, without imposing any charges and in ‘as is where is condition’ - Petition allowed. Issues Involved:1. Jurisdiction and authority of the Customs Authorities to confiscate the vessel and goods.2. Applicability of customs duty and confiscation under the Customs Act, 1962.3. The legal interpretation of 'import' under Section 2(23) of the Customs Act.4. The classification of the vessel and goods as 'goods in transit' under Section 53 of the Customs Act.5. The applicability of international treaties and conventions on distress calls and rescue operations.Detailed Analysis:1. Jurisdiction and Authority of the Customs Authorities to Confiscate the Vessel and Goods:The petitioner challenged the confiscation order issued under Section 111 of the Customs Act, 1962, arguing that penalizing the petitioner for acts committed without his knowledge was arbitrary and unjust. The court examined whether the Customs Authorities had the jurisdiction and authority to issue the impugned orders. The court held that the petitioner need not be relegated to the alternative remedy of appeal under Section 129 of the Act due to the extraordinary circumstances of the case.2. Applicability of Customs Duty and Confiscation under the Customs Act, 1962:The Customs Authorities issued a notice under Section 124 of the Act and found the vessel liable for confiscation under Section 111(d), (f), and (l) of the Act, with an option to redeem the vessel on payment of a redemption fine. A corrigendum was issued imposing a duty on the vessel and goods found on board. The court scrutinized whether the vessel and goods were liable for customs duty and confiscation, considering that the vessel was brought into Indian waters due to a distress call, which was later found to be a ploy by the crew.3. Legal Interpretation of 'Import' under Section 2(23) of the Customs Act:The court analyzed the definition of 'import' under Section 2(23) of the Act, which means bringing into India from a place outside India. The court emphasized that the definition should be given a contextual interpretation. It concluded that the vessel's entry into Indian waters, facilitated by the Indian Coast Guard responding to a distress call, did not constitute an 'import' as contemplated under the Act. The court noted that the act of bringing the vessel into Indian waters was not voluntary on the part of the owner.4. Classification of the Vessel and Goods as 'Goods in Transit' under Section 53 of the Customs Act:The court considered whether the vessel and goods could be classified as 'goods in transit' under Section 53 of the Act. The court referred to the petitioner's submission that the vessel and goods would not be used in India and would be taken back to the flag State. The court held that the vessel and goods should be regarded as 'goods in transit' and not liable for customs duty or confiscation.5. Applicability of International Treaties and Conventions on Distress Calls and Rescue Operations:The court discussed the international treaties and conventions, such as the United Nations Convention on the Law of the Sea (UNCLOS) and the Safety of Life at Sea (SOLAS), which obligate States to render assistance to vessels in distress. The court acknowledged that the Indian Coast Guard acted in accordance with these treaties by responding to the distress call and bringing the vessel into Indian waters. The court emphasized that distress calls are recognized modes of calling for help on the high seas and that the vessel's entry into Indian waters was a result of a distress call, not an act of import.Conclusion:The court set aside the orders of confiscation and the corrigendum imposing customs duty, declaring that the vessel and goods were not susceptible to customs duty or confiscation proceedings under the Act, provided they were not used in India and were taken out of the country. The court directed the respondents to hand over custody of the vessel and goods to the petitioner without imposing any charges, subject to an undertaking that the vessel and goods would not be used or consumed in India and would be taken out of the country as soon as they were sea-worthy. The writ petition was allowed accordingly.