TaxTMI 
TaxTMI 
2018 (4) TMI 422
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....t to be under heading no. 89059090 of the First Schedule to the Custom Tariff Act, 1975 against the claim to be classified under heading no. 80 9019000 with consequential liability to duty and by upholding the confiscation of the three ships under section 111 of Customs Act, 1962 with attendant fine in lieu thereof, albeit with a substantial reduction from that imposed by the lower authority. At the same time, the claim of the appellant for fresh determination of duty liability in accordance with section 15 of Customs Act, 1962 as well as by exclusion of the liability for the period beyond that barred by limitation, with corresponding re-determination of penalty under section 114A of Customs Act, 1962 was accepted. 3. In the context of the disposal supra and the contents of the present application, it may be worthwhile recalling, for the record, the finding on the manifold submissions made during the course of hearing which is '78 In view of the settled the position of law as stated above and having decided the appeals on the statutory principles as well as first principles of law, further discussions on other citations is considered redundant and not to burden this order....
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....he Learned Counsel. Further, according to him, the arguments of Revenue relying upon end use appeared to have outweighed the plea of the appellant that the fundamental principles of classification, as laid down by the Hon'ble Supreme Court in Commissioner of Central Excise, Delhi v. Carrier Aircon Ltd [2006 (199) ELT 577 (SC)], should be followed to discard the classification adopted by the original authority. 8. Submitting that even this was but an exercise in superfluity had the primary plea of the applicant for declaration of the ships as vessels and, thereby, outside the purview of section 12 of Customs Act, 1962 been taken upon for consideration, Leamed Counsel pointed out that the precedent of Noble Asset Co Ltd v. Commissioner of Customs (Preventive), Mumbai [2006 (205) ELT 901 (Tri-Mumbai)] should have been followed and, more so, in view of the affirmation by the jurisdictional High Court. 9. The third contention is that their plea for entitlement of concessional duty of 1% under notification no. 1/2011-CE dated 1st March 2011, which is not deniable to them in terms of the decision of the Hon'ble Supreme Court in SRF Ltd v. Commissioner of Customs [2015 (318) ....
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....nder Customs Act, 1962. Strenuously arguing that the applicant was resorting to this procedure for re-argument of the entire appeal which, according to him, is an abuse of the legal process, Mr KM Mondal contends that proper forum for bringing of these issues are the constitutional courts and not the Tribunal. 14. According to Mr KM Mondal, the scope of section 129B (2) of Customs Act, 1962 is restricted inasmuch as its purpose is to enable such mistakes, as are apparent from the record, to be rectified and that any submission that calls for lengthy and complicated arguments to be found acceptable are beyond its purview. Reliance is placed by him on the decision of the Hon'ble Supreme Court in Commissioner of Central Excise, Belapur v. RDC Concrete (India) P Ltd [2011 (270) ELT 625 (SC)], in TS Balaram v. Volkart Brothers [82 ITR 50 = 1971 (2) SCC 526], ITO v. Ashok Textiles [41 ITR 732], Commissioner of Central Excise, Calcutta v. A.S.C.U. Ltd [2003 (151) ELT 48 (S.C.)], and Deva Metal Powders Pvt Ltd v. Commissioner, Trade Tax, U.P. [2008 (221) ELT 16 (SC)], of the Hon'ble High Court of Allahabad in Quality Exports & Chemicals v. CEGAT, New Delhi [2000 (122) ELT 361 (A....
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....pair and machinery installed therein and freight and insurance incurred, upon re-import of the vessels from time to time, although filing thereof is mandatory under Section 46 of the Act. The Bills of Entry filed were only in respect of bunker, store and consumables. Such stores and consumables only suffered duty and Revenue has no grievance thereon. But, without the Bills of Entry being filed against the cost of repair and freight as well as insurance incurred, there was escapement of levy of duty, Revenue having lost the duty imposable against re-import on the value of the repair/modification and machinery installed as well as freight and insurance incurred, adjudication was made and resulted with the consequence of adjudication as stated herein before. It was the obligation of the importer in law to file the Bills of Entry under Section 46 of the Act on import as well as re-import under Section 20 of the Act. 58 According to law of Customs on import and re-import, when Bill of Entry is filed in respect of the goods imported, necessary particulars of import are furnished therein for examination by Customs. Descriptions relating to import appearing in the Bill of Entry are requ....
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....ng to the classification certificate issued by the Indian Registry of Shipping implying thereby that those were meant for transporting goods and persons from ports to offshore installations with unrestricted navigation facility and that, in any case, the appeal of Revenue pending before the Hon'ble Supreme Court deprived it of any value as a precedent as laid down by the Hon'ble Supreme Court in Union of India v, West Coast Paper Mills Ltd [2004 (164) ELT 375 (SC)] thus 'once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in Jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit ' 18. On the proposition of the applicant that disregard of the decisions of the Tribunal in re Raj Shipping Agencies Ltd, in re Acadia Shipping Ltd, and in re L&T Sapura Shipping P Ltd was a mistake that ought to be rectified, Mr. Mondal points out the irrelevance of that classification to the present dispute. ....
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....serving orders, permitted the plea of jurisdiction to be raised in a clarificatory hearing. According to him, the invoking of rule 41 of the Rules supra was an appeal to the conscience of the Tribunal owing to the potential for irreparable harm should the issue of jurisdiction be resolved against Revenue by the Hon'ble Supreme Court at a later stage. 21. Having heard the submissions from both sides, we now turn to the records. It would appear that in the appeal against the order of the original authority fastening duty liability on the ships, the cavil is to the disregard of the rigorous hierarchy of decision enjoined by the Customs Act, 1962. According to them, the hierarchy, commencing with the taxing provision to classify the goods and ascertain the rate of applicable duty - from the tariff and exemption notification through appraisal of the value in accordance with section 14 and culminating in computation of duty liability under section 17, which, according to Constitutional mandate, being restricted to goods, should have examined the scope of coverage under section 46 which does not extend to conveyances. 22. We notice that the original authority had gon....
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....ng vessels' issued under the erstwhile Sea Customs Act, 1878 and the predecessor to the Customs Tariff Act, 1975 and, though incidentally did accord a meaning to 'consumption, held that '20. We do not think that, in the present case, the question whether a transhipping vessel is an ocean-going vessel, can solely rest on the test of its dominant use to which their owners put them at times. Use may vary from season to season, port to port and also managers to managers. So in this area of understanding use of the article stands down-staged, and the Court must look at to know what actually the commodity is. 21. In the Merchants Shipping Act, 1958, the expression "sea-going vessels " is used and defined it in Section 3(41), like this. "Sea-going", in relation to a vessel means a vessel proceeding to sea beyond inland waters or beyond waters declared to be smooth or partially smooth waters by the Central Government by notification in official gazette. " 22 Though an endeavour was made before the Tribunal to show that there is a shade of difference between the two words "sea" and "ocean", we are not disposed to attach much emphasis on the nuances in the se....
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.... assumption appears to have been that the specialized ship, with navigability as a subordinate characteristic, was, as an equipment, incapable of being a conveyance - usually regarded as a mode for transport of people and goods. This conclusion appears to have stemmed from the description in, as well as the notes (including 'explanatory notes') pertaining to, heading no. 8905 of the First Schedule to Customs Tariff Act, 1975 instead of approaching a fitment within this description at the second stage in the hierarchy of decision. 25. Certain obligations devolve on, and certain privileges accrue to, ships as conveyances. These are, statutorily, built into the customs laws of the country. Furthermore, as conveyances, ships regularly traverse that unmarked frontier between the territorial waters, to which the writ of national laws extend, and the watery wilderness of high seas, which acknowledges neither sovereignty nor civilization in its natural state, on their passage. International convention on facilitation of maritime trade govern the treatment accorded to ships crossing from the high seas into the territorial waters. For ships to be accorded recognition as a conveyan....
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....eading instead of being read as the distinction between that subheading and other subheadings of the chapter. The classification merits fresh determination particularly in the light of the various judicial decisions dealing with import of 'supply vessels.' 27. It would appear from the above that the mistakes in the order of the Tribunal require rectification. These issues do not find sufficient coverage in the adjudication order. For the Tribunal to delve into the details of these without the assistance of a comprehensive adjudication order would not be equitable to either side. The order of the Tribunal has directed the adjudicating authority to subject some of the claims of the applicant to scrutiny for re-computation of duty. It would be in the fitness of things for the two issues of categorization as 'conveyance' or 'goods' on entries after the first import and for classification under the appropriate entry in chapter 89 in the event of the ships being found to be 'goods' on each voyage to be included in the terms of determination by the adjudicating authority. While doing so, the other issues of rate of exchange and appropriateness of the not....
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.... was contrary to the early settlement for the following reasons: '14 The contention that all proceedings founded upon a show cause notice that was inherently lacking in jurisdiction, would be non est, null and void, is perhaps right as a simple statement of a proposition of law. But it is not without exceptions. If this theory of nullity and voidity is accepted, all proceedings initiated before 8-4-2011, which have already culminated in orders of adjudication and pursuant to which recoveries have been made, are also to be deemed as non est. Therefore, the Commissionerates of Excise throughout the country can today be flooded with applications for refund of the duty paid in pursuance of the orders of adjudication passed on the basis of such show cause notices. The theory of nullity and voidity cannot be extended to such an extent as to lead to such disastrous consequences. 15. There is also one more aspects It is not the case of the petitioner that they challenged either the impugned show cause notice or the Order-in-Original at the relevant point of time on the ground that the show cause notice was issued by a person not assigned the role of a proper officer. The p....