2015 (7) TMI 816

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....m foreign run to coastal run on 12-8-2008. As per the conversion certificate dated 12-8-2008, 568.550 MT of Marine Gas Oil was found on board. Transocean Offshore Deepwater Drilling Inc., the third appellant in Appeal No. C/20013/2014 had imported Drillship (Rig) Discoverer Seven Seas (DSS) at Kakinada Port in July 2006 which was converted from foreign run to coastal run on 28-7-2006. As per the conversion certificate dated 28-7-2006, 644.654 CBM of Marine Gas Oil was found on board. 2. In all the cases samples of the Marine Gas Oil were drawn by the Customs officers and sent for chemical examination. Since it was agreed by both the sides that in all the 3 appeals the issue involved is common and facts are also similar, the issue dealt with by us in this case is based on the facts in Appeal C/20011/2014. 3. The issue involved is eligibility of exemption for Marine Gas Oil as declared by the appellants for exemption under Sl. No. 217 of Notification No. 21/2002-Cus., dated 1-3-2002. For better appreciation, the Notification and the Condition No. 32 subject to which exemption is available and the List 12 which covers the items covered under the Notification are reproduced....

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....e from a duly authorised officer of the Directorate General of Hydro Carbons, in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the imported goods are required for petroleum operations or coal bed methane operations, as the case may be, referred to in clause (a) and have been imported under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy, as the case may be, and containing the name of such sub-contractor, (ii)     an affidavit to the effect that such sub-contractor is a bona fide sub-contractor of the contractor, (iii)    an undertaking from such contractor, binding him to pay any duty, fine or penalty that may become payable, if any of the conditions of this notification are not complied with, by such sub-contractor or contractor, as the case may be; and (iv)    a certificate, in the case of a contract entered into by the Government of India and a Foreign Company or Companies or, the Government of India and a consortium of an Indian Company or Companies and a Foreign Company or Companies, that no foreign exchange remittance is made for the import of ....

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.... oil, gas and water injection including items forming part of the platforms and equipment required like process equipment, turbines, pumps, generators, compressors, prime movers, water makers, filters and filtering equipment, Telemetry, Telecommunication, Tele-Control and other material required for platforms (10) Line pipes for flow lines and trunk pipelines including weight-coating and wrapping (11) Derrick barges, Mobile and stationary cranes, trenchers, pipe lay barges, cargo barges and the like required in the construction/installation of platforms and laying of pipelines (12) Single buoy mooring systems, mooring ropes, fittings like chains, shackles, couplings marine hoses and oil tankers to be used for oil storage and connected equipment, Tanks used for storage of oil, condensate, water, mud, chemicals and related materials (13) All types of fully equipped vessels and other units/equipment required for pollution control, fire prevention, fire fighting, safety items like Survival Craft, Life Raft, fire and gas detection equipment, including H2S monitoring equipment. (14) Mobile and skid mounted pipe laying, pipe testing and pipe inspection equipment (15) All types of valves i....

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.... 5. Learned AR submitted that the Chemical Examiner's report is very clear and unambiguous and specifically states that the product is LDO. Therefore it cannot be considered as MGO. DGHS has given the essentiality certificate only for MGO. Since the product is LDO according to the Chemical Examiner, no benefit of exemption can be extended to MGO. 6. The learned counsel on behalf of the appellant draws our attention to the specifications of Marine Gas Oil as per ISO 8217 Grade DMA, 2010. According to the specifications of ISO, Density at 15°C, has to be maximum 0.8900 whereas the sample tested at the Density of 0.8440 which is within the limits as per the ISO. 7. As regards Sulfur content he submits that according to the standards it should be 1.5% maximum whereas in the present case Chemical Examiner has found the percentage of Sulfur to be 0.880 which is again within the limits for MGO. As regards Flash point, he submits that 85°C is the Flash point according to the Chemical Examiner and according to ISO 61.5°C is the minimum. Therefore the sample fulfilled the requirement of MGO as far as combustion ash is concerned. 8.  Lastly he submits that ....