TaxTMI 
TaxTMI 
2020 (3) TMI 860
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.... M/s. Global Cambay Marine Service Private Limited respondent herein (hereinafter referred to as "the respondent") is engaged in the activity of supply of ship store, water bunker and other items to the vessels calling at various ports of Gujarat. Amongst the fleet of vessels, the respondent has one utility vessel boat named MV Al-Vard, which was used by the respondent for towing of sea plying vessels. 2.2 An intelligence was received by the office of the Directorate of Revenue Intelligence, Ahmedabad that the Director of the respondent has been involved in illegal import/smuggling of diesel oil by the barges and tugs deployed at Hazira Port, Surat. Intelligence also suggested that utility vessel boat MV Al-Vard was used in illegal import/smuggling of diesel oil and has been retained as bunker for its use. The investigation by the office of the Directorate of Revenue Intelligence, revealed that the respondent illegally imported diesel oil in the tug MV Al-Vard and the quantity of the said diesel was ascertained by visit on the said boat at the Jetty of Larsen and Tubro. Owing to the aforesaid investigation, actual quantity of diesel was ascertained through sounding of the bunker....
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....fore the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal') which, allowed the appeals and remanded the matter to the Commissioner (Appeals) for deciding the same on merits vide its order dated 21st November, 2014. On remand, the Commissioner (Appeals), passed an order dated 11th May, 2015 whereby, the appeals filed by the respondent and three others came to be dismissed and as a result whereof the order of the adjudicating authority stood confirmed. 2.7 The respondent and others being aggrieved by the said order dated 11th May, 2015, preferred appeals before the Tribunal and the Tribunal, vide its order dated 7th August, 2018, while partly allowing the appeals, passed an order inter alia reducing the redemption fine on tug MV Al-Vard to Rs. 8 Lakhs; reducing the redemption fine in respect of goods to Rs. 8 Lakhs and; setting aside the redemption fine of Rs. 6 Lakhs as the goods were not available. The operative portion of the final order dated 7th August, 2018 passed by the Tribunal is extracted herein below: - The duty demand, interest and 25% penalty paid is maintained. The redemption fine on tug is reduced t....
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....ribunal has committed an error by placing reliance on the judgment of the Supreme Court in the case of Jain Exports Private Limited reported in 1993 (66) ELT 537 inasmuch as, the facts of the present case are totally different from the facts of the said case. It is submitted that the issue involved in the case of Jain Exports pertains to violation of import policy and bill of entries. Whereas, in the present case, the respondent and others intentionally and knowingly attempted outright smuggling without filing bill of entry. It is further submitted that the respondent and others contravened the provisions of the import policy and thus, the principle laid down in the case of Jain Exports Private Limited (supra), could not have been made applicable to the facts of the present case. It is further submitted that the approach adopted by the Tribunal is erroneous. The Tribunal ought to have appreciated that the provisions of the Act of 1962 are to curb the menace of smuggling on economy and when the respondent and three others have intentionally engaged themselves in the smuggling of the diesel, redemption fine and penalty should be commensurate with the offences and should have deterren....
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.... Essential Commodities Act, 1955, has observed that the proviso to sub-section (2) of section 115 specifically mentions that where any such conveyance is used as a means of transport in the smuggling of goods, the owner of any conveyance is to be given an option to pay in lieu of the confiscation of conveyance a fine not exceeding the market price of the goods which are sought to be smuggled, and under the circumstances the Tribunal rightly imposed the redemption fine of Rs. 8 lakhs on tug MV Al-Vard. 4.3 It is further submitted that the contention raised by the appellant that the proviso to sub-section (2) of section 115 only covers the goods where conveyance is used for the carriage of the goods or passengers for hire is misconceived and without any basis. It is further submitted that going by the proviso to sub-section (2) of section 115, the Tribunal rightly concluded that the maximum fine on the conveyance can be an amount not exceeding the market price of goods which are sought to be smuggled or the smuggled goods as the case may be. Thus, it is urged that the Tribunal has not committed any error and the findings recorded by the Tribunal cannot be said to be perverse and t....
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.... (1) The following conveyances shall be liable to confiscation :- (a) any vessel which is or has been within the Indian customs waters, any aircraft which is or has been in India, or any vehicle which is or has been in a customs area, while constructed, adapted, altered or fitted in any manner for the purpose of concealing goods; (b) any conveyance from which the whole or any part of the goods is thrown overboard, staved or destroyed so as to prevent seizure by an officer of customs; (c) any conveyance which having been required to stop or land under section 106 fails to do so, except for good and sufficient cause; (d) any conveyance from which any warehoused goods cleared for exportation, or any other goods cleared for exportation under a claim for drawback, are unloaded, without the permission of the proper officer; (e) any conveyance carrying imported goods which has entered India and is afterwards found with the whole or substantial portion of such goods missing, unless the master of the vessel or aircraft is able to account for the loss of, or deficiency in, the goods. (2) Any conveyance or animal used as a means of t....
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....ne of the core grounds raised by the appellants and relatable to the controversy in issue is to the effect that while reducing the redemption fine on the conveyance, the Tribunal has erroneously interpreted the proviso to sub-section (2) of section 115 inasmuch as, the proviso to sub-section (2) of section 115 is applicable only to the cases, where the conveyance is used for carriage of goods or passengers for hire for smuggling of the goods. It has been contended on behalf of the appellant that in the facts of the present case, the respondent was an owner of the conveyance and since the tug was not hired the proviso to sub-section (2) of section 115 of the Act of 1962 is not at all applicable. At this stage, the order dated 25th April, 2013 passed by the adjudicating authority, is required to be taken note of. The adjudicating authority having found that the respondent had illegally imported/smuggled 150 MT of diesel oil valued at Rs. 75,00,000/- into the tug MV Al- Vard, with an intention to use the same for plying inside the sea without payment of duty thereon, confiscated the goods. The adjudicating authority also imposed customs duty amounting to Rs. 12,71,406/-. Further, the ....
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....ld that the proviso to sub-section (2) of section 115 specifically mentions that where any conveyance is used as a means of transport in the smuggling of the goods, the owner of any conveyance is to be given an option to pay in lieu of confiscation of the conveyance, a fine not exceeding the market price of the goods which are sought to be smuggled and the explanation to the proviso to sub-section (2) of section 115 provides that the market price means the market price on the date when the goods are seized. 15. The Tribunal, having regard to the proviso to sub-section (2) of section 115 of the Act of 1962, has observed that the maximum fine on the conveyance can be an amount not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be, and held that the maximum redemption fine which can be imposed cannot be more than Rs. 51,82,850/-. Keeping in mind the principles enunciated by the Supreme Court in Jain Exports Pvt. Ltd. (supra), the Tribunal found that the total benefit derived by the respondent was Rs. 13 lakhs, which is the duty amount; and that the respondent had deposited not only the amount of duty but also the inter....