Customs law in the exclusive economic zone: prima facie challenge succeeded and show cause adjudication was stayed.

India under the Customs Act, 1962 includes territorial waters, and the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 permits extension of Indian enactments to the continental shelf and exclusive economic zone by notification. The notifications relied on extended the Customs Act and Customs Tariff Act generally, but their special extension to the continental shelf and exclusive economic zone was limited to prospecting, extraction or production of mineral oils and connected supplies. As the fibre-optic cables imported for installation were not shown to fall within that limited purpose, the Court found a strong prima facie case on the applicability of customs law and stayed adjudication of the show cause notice pending final disposal of the writ petition.

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Issues: Whether, on a prima facie view, customs duty could be levied on fibre-optic cables imported for installation in the exclusive economic zone and international waters, and whether adjudication of the show cause notice should be stayed pending final decision in the writ petition.

Analysis: India under the Customs Act, 1962 includes territorial waters. The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 empowers the Central Government to extend Indian enactments to the continental shelf and exclusive economic zone by notification. The notifications relied upon extended the Customs Act, 1962 and the Customs Tariff Act, 1975 to designated areas generally, and separately extended them to the continental shelf and exclusive economic zone only for prospecting, extraction or production of mineral oils and connected supplies. The import in question was not shown to fall within that limited purpose. On that basis, the Court found a strong prima facie case on the applicability of customs law to the goods imported for the stated purpose.

Conclusion: Prima facie, the petitioners' challenge was accepted and the adjudication of the show cause notice was stayed pending final decision in the writ petition.

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