TaxTMI 
TaxTMI 
2017 (5) TMI 1068
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....ported in connection with offshore oil exploration and exploitation from the whole of the duty of customs subject to production of certificate, from an officer not below the rank of a Deputy Secretary in the Ministry of Petroleum & Natural Gas, that the imported goods are required, and used, for offshore oil exploration; in addition, the exemption could be availed only upon the production of an essentiality certificate from the Directorate General Technical Development. 2. The importers acquired the above rigs on 'bare boat charter' terms from M/s Triangle Drilling Ltd and had them transported from Brazil under tow by MV Mighty Servant 3 which was anchored 20 miles off the coast of Daman without entering the territorial waters. The agents of tow vessel filed Import General Manifest (IGM) no.2738 declaring the two rigs as cargo for discharge off the harbour at Bombay (as it then was). The cargo was off-loaded at the anchor location without filing a bill of entry. Norbe-II remained in the waters off India between 1st November 1988 and 21st December 1992 of which for 5 months and 21 days till 21st April 1989 it operated in the designated area. Norbe-V operated in Indian water....
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....n the Chairman, Shri Jegdish Pershad Gupta under section 112 and 114 of Customs Act, 1962. 5. The primary ground of appeal, and the submissions made on behalf of appellants by Learned Senior Counsel, is that Commissioner of Customs (Preventive), Mumbai was devoid of not jurisdictional competence to initiate proceedings against the importer and the imported goods. Pointing out that recovery of duty and confiscation proceedings could be triggered only upon import of goods into India within the meaning of such in the Customs Act, 1962. Mr DB Shroff contends that the rigs had operated only in the designated area of the Exclusive Economic Zone (EEZ) without entering the territorial waters. It is further contended that the empowerment of Commissioner of Customs (Preventive), Mumbai being restricted to the three districts of Mumbai, Thane and Raigad and, by any stretch, extendable to another twelve nautical miles into the waters from the appropriate baseline within which area the rigs had never brought into, impugned proceedings under Customs Act, 1962 was in excess of jurisdiction. Reliance is placed on the decision of the Tribunal in Nobel Asset Co Ltd v. Commissioner of Customs (Preve....
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....e, by statute, commissions instruments of the executive to collect such taxes, and in such manner, as prescribed by law. That, and no other, is the sole sanctity and authority for taxing goods, services or possessions. 8. Jurisdictions are assigned by the Central Board of Excise & Customs in exercise of powers under section 4 of Customs Act, 1962 and thus acquires the sanctity of law for empowerment of such officers to discharge their function. If tax collection were to be a mere accounting exercise, jurisdiction of the tax collector would be of no consequence. However, such a proposition is fraught with the peril of administrative chaos and the threat of potential subversion of legislatively sanctioned authority. Acts in excess of law and jurisdiction, and their associated arbitrariness, undoubtedly, are remediable at the bar of the higher courts of the land but when justice is delivered only to those who can contemplate such redressal, tentacles of distortion and arbitrariness get hooked into the economic system. Remedy by the highest court of the land for should, therefore, not be the first option of the distressed. The primary bulwark against the least ingress of arbitrariness....
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....ection 2 ... ..... xxxxx (27) "India" includes the territorial waters of India; (28) "Indian customs waters" means the waters extending into the sea upto the limit of the contiguous zone of India under section 5 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976) and includes any bay, gulf, harbour, creek or tidal river;' 12. We find ourselves unable to confer sanctity to this claim as the inclusion of waters, whether territorial or of the exclusive economic zone, in the definition of India cannot extend to the states that compose the Union because the states are deprived of jurisdiction over the waters adjoining their respective coastlines. This has been settled by the Hon'ble Supreme Court, in Republic of Italy & others v. Union of India & others [Order dated 18th January 2013 in WP (Civil) No, 35 of 2012], holding that the investigative and policing authority of state of Kerala does not extend beyond the coastline. In that decision, the Hon'ble Supreme Court did take into consideration its decision in Aban Lloyd Chiles Offshore Ltd v. Union of India [2008 (227) ELT 24 (SC)] which has been relied upon by Mr Mon....
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.... to draw sustenance from the decision of the Hon'ble Supreme Court in Commissioner of Customs, Mumbai v. Virgo Steels Ltd [2002 (141) ELT 598 (SC)], proceeded to claim powers under section 12 of Customs Act, 1962. 15. Before proceeding further to analyse the amenability of section 12 of Customs Act, 1962 for recovery of short-paid or unpaid duty, it would be appropriate to examine the scope and applicability of the decision of the Hon'ble Supreme Court in re Virgo Steels Ltd. There can be no doubt that decisions of courts are precedents that may lay the foundation for demand of duty in adjudication orders but it is, indeed, doubtful if a show cause notice can rely upon judicial decisions as authority for demanding duty. The reasons are not far to seek: the peculiarities, singularities and angularities that characterise a particular dispute which may find judicial settlement that may not necessarily be replicated in another; it is only upon hearing the person served with the notice, and upon taking note of the defence, that a reasonable conclusion can be drawn of similarity with or distinction from another dispute. It is, therefore, inappropriate to cite the authority of an order o....
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....are of the opinion that this Court used the expression "condition precedent" with reference to issuance of notice under Section 28 and not with reference to the jurisdiction of the proper Officer under that Section. While the absence of notice may invalidate the procedure adopted by the proper Officer under the Act, it will not take away the jurisdiction of the Officer to initiate action for the purpose of recovery of duty escaped. This is because of the fact that the proper Officer does not derive his power to initiate proceedings for recovery of escaped duty from Section 28 of the Act. Such power is conferred on him by other provisions of the Act which mandate the proper Officer to collect the duty leviable. By a perusal of Chapter V of the Act in which Section 28 is found, it is seen that the charging Section which authorises the levy of customs duty is found in Section 12 of the Act. Section 17 contemplates the procedure for making an assessment in regard to duty payable while sub-section (4) of Section 17 makes a provision to empower the proper Officer to reassess the imported goods for duty if it is found that the assessment made at the time of importation was based on incorr....
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....owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit: Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1) the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods. 17. The adjudicating authority has referred to the aforesaid provision to claim that, akin to absence of time bar for recovery under section 125 of Customs Act, 1962, recourse to section 12 is also not hindered by any bar of limitation. Section 125 is relied upon by adjudicating authorities consequent upon the decision of the Hon'ble Supreme Court in Commissioner of Customs (Import) v. Jagdish Cancer & Research Centre [2001 (132) ELT 257 (SC)]. In re Jagadish Cancer Research Centre, the Hon'ble Supreme Court was concerned with 'duty fore....