TaxTMI 
TaxTMI 
2017 (8) TMI 55
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....ng exemption under Sl.No.352A of Notification No.21/2002-Cus. dt.1.3.2002 as amended. On investigation by the Directorate of Revenue Intelligence (D.R.I), it emerged that items like HFHSD, Fish Bait, Lubricating Oils, Hyd.Oil, foods items etc. had also been imported along with the fishing trawlers, for which no Bill of Entry was filed, no customs duties were paid. Accordingly, proceedings were initiated vide SCN dt. 18.07.2006, inter alia, proposing demand of customs duties on the fish bait and other consumable goods, along with interest thereon, confiscation of the quantities of the said goods and imposition of penalties under various provisions of the Customs Act, 1962. In adjudication, vide the impugned order dt. 31.10.2006, Commissioner....
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....e case of M/s. Aban Lyod Chiles Offshore Ltd. Vs. Commissioner of Customs, Mumbai - 2003 (156) ELT 490 (Tri.), the Tribunal held that the Oil Rigs when entered Indian territorial waters loses its character of foreign going vessel and it resumes its character as a Foreign Going Vessel when it leaves Indian territorial waters. Therefore, in the instant case from the date of entry inwards till voyage to High Seas, the trawlers under reference and the bunkers, fish bait and food items on their board clearly cease to be foreign going vessels and ship stores respectively and hence clearly fail within the ambit of dutiable imported goods. iii) Since, the trawlers under reference did not enjoy the status of a foreign going vessel at the time of ....
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....s including fish baits does not arise. c) The vessels imported by the Respondents are foreign going vessels in terms of Section 2(21) of the Customs Act. d) The vessels imported by the Respondent are fishing vessels which can be operated only in the deep sea beyond 24 nautical miles. Such vessels are not capable of any other use and cannot be used within the coastal region. Fish baits are either alive or dead fish which is attached to a fish hook and is laid in the water to lure big fish. Section 2(38) of the Customs Act, defines stores as all goods for use in a vessel or aircraft and includes fuel and spare parts and other articles of equipment, which is inclusive definition and includes within its ambit all such goods which are for ....
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.... are not Ship Stores. 4.5 To understand the controversy, it would be useful to extrapolate the relevant provisions in the Customs Act, 1962, relating to Transit and transhipment of stores as follows :- "Section 86 - Transit and transhipment of stores. - (1) Any stores imported in a vessel or aircraft may, without payment of duty, remain Ion board such vessel or aircraft while it is in India. (2) Any stores imported in a vessel or aircraft may, with the permission of the proper officer, be transferred to any vessel or aircraft as stores for consumption therein as provided in section 87 or section 90. Section 87 - Imported stores may be consumed on board a foreign going vessel or aircraft - "Any imported stores on board a....
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....treated as ship stores for use and consumption in the subsequent fishing operations in high seas. There can also be no dispute that once the fishing trawler complete its shore modalities and goes to the high seas for their intended fishing operations, they will have to be treated as foreign going vessel in terms of Section 2 (21) of the Customs Act, 1962 reproduced in para 4.6 above. Even the CBEC Customs Manual of Instructions, in Chapter 2, Para-15 thereof clarifies that consumables can remain on board without payment of duty, relevant extract of which is reproduced below for ready reference : "Filing of Stores List: 15 When entering any port, all ships are required to furnish to the Commissioner of Customs, a list (or nil return) o....