TaxTMI 
TaxTMI 
2006 (5) TMI 32
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....n-Appeal. 5. The facts of the cases have been narrated in detail in the impugned orders. Hence the same are not repeated here. The issues involved in the instant appeals are as under: (a) Appeal No; 13/97 (V) Cus. Whether the appellants are entitled to refund of Rs. 3, 62,802/- by considering the vessel MV WORLD PROSPER as having not lost its character of being a foreign going ship when she picked up coastal cargo for discharge at Bombay enroute to a foreign port thereby making her entitled to consume stores without payment of customs duty during the voyage between Vizag and Bombay? (b) Appeal No. 14/97 (V) Cus. Whether the appellants areentitled to refund of Rs. 42,205/- by considering the vessel M.V DIAMOND HALO as having n....
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.... consume stores without payment of Customs duty during the voyage between Vizag and Bombay. 7. Perusal of the case records revealed that the duty collected on shipstores in this case was based on the procedure set out in PN 2/85 of Visakhapatnam Custom House. The said Public Notice envisages payment of duty on the entire ship stores lying on board the vessel excluding those kept under Customs seal at the time of conversion of the vessel to coastal run. After reconversion to foreign run, based on the closing inventory of stores, taking into account actual consumption, the drawback is paid under Section 74 of the Customs Act, 1962 in respect of duty paid consumable stores remaining on board. Therefore duty is not only collected on shipstor....
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....tion 2(21) of the Customs Act, 1962 which carry foreign cargo, discharge the same in India and then sail back to a foreign port. In such cases only imported consumable stores remaining on board the vessel is exempted from payment of duty. Therefore, Section 86 of the Customs Act, 1962 does not contemplate exemption from payment of duty on the stores available on board the vessels, which are in coastal run between two Indian Ports. The collection of duty on such stores is therefore not contrary to the aforesaid provisions of the Customs Act, 1962 as contended by the Steamer Agents. 10. Section 87of the Customs Act, 1962 statutorily permits consumption of stores duty free on board a foreign going vessel. In other words such facility is not....
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....arry Indian/coastal cargo. The kind of voyage undertaken by the vessel MV WORLD PROSPER cannot be equated with the kind of journey that was made by lighter MV ANUPAMA in the case decided by the Hon'ble Tribunal in Order No. 1290/86. 13. The vessel MV WORLD PROSPER was a foreign cargo carrying vessel which arrived with foreign cargo for Visakhapatnam. When she went to Bombay she did so only to carry indigenous cargo/coastal cargo. Nor is there any evidence to the effect that the subject vessel was destined to discharge foreign cargo at Bombay and that the said vessel merely helped to carry the cargo to its intended destination in continuation of the same operation. The run from Vizag to Bombay was clearly a coastal run to carry cargo betw....