TaxTMI 
TaxTMI 
2021 (12) TMI 1159
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....respondent. 3. The Background Circumstances: On 15.12.2005 the agreement entitled 'The South East Asia and Indian Ocean Cable Maintenance Agreement' was entered between the Telecom Companies (Maintenance Authorities) and Cableship operators. The object of the agreement is to provide submarine cable installation, repairs and maintenance to the Maintenance Authorities. The respondent, in turn, entered into an agreement with Cochin Port Trust for availing berthing facility at Cochin Port. The respondent, as part of its contractual obligation under 'South East Asia and Indian Ocean Cable Maintenance Agreement', shall be based at Port of Cochin, India, and has deployed 'C S Asean Explorer' for carrying out the contractual obligations under the Cable Maintenance Agreement. 'C S Asean Explorer' was berthed at Cochin Port and undertook sorties to places of repair and maintenance work in the Arabian Sea. 3.1 Show-cause notice dated 10.07.2012 along with corrigendum dated 14.08.2012 was issued proposing to initiate action under Sections 111(b) and (f) of the Act read with Section 125 of the Act contemplating to levy duty, impose redemption penalty, etc under....
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....tores valued at Rs. 45,15,20,479/- received by the Cable Ship ASEAN Explorer under Section 28(8) of the Customs Act 1962. v) ASEAN Cable Ship Pte Ltd. shall also be liable to pay interest as applicable under Section 28 (10) of the Customs Act 1962, on the duty amount of Rs. 9,98,58,697/- (Rupees nine crores ninety eight lakhs fifty eight thousand six hundred and ninety seven only) from the date of import till the date of payment of the duty. vi) I impose a penalty equal to the sum of duty of Rs. 9,98,58,697/- and interest payable thereon, on M/s. ASEAN Cable Ship Pte Ltd, under section 114A of the Customs Act 1962. vii) I impose a penalty of Rs. 5,00,000/- (Rupees Five lakhs only) on Shri. Too Taik of the vessel CS. ASEAN Explorer under section 112(a) of the Customs Act 1962. viii) I impose a penalty of Rs. 1,00,00,000/- (Rupees One Crore only) on M/s. Forbes and Company Ltd., under section 112(a) of the Customs Act 1962. ix) I order that the Bank Guarantee of Rs. 46.26 crores submitted by M/s ASEAN Cable Ship Pte Ltd. shall be invoked and adjusted against the duty, interest, fine and penalty payable." 3.3 The respondent aggrieved by the order dated 04.04.2013 filed appe....
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....ELT 31; Union of India v. Auto Ignition Ltd. 2002 (142) ELT 292 (Bom.); Sterlite Optical Technologies Ltd. v. Commr. of C. Ex., Aurangabad 2007 (213) ELT 658 (Bom.); The Commissioner of Customs v. BMW India Private Limited, Kanchipuram 2019 (5) TMI 930 Madras HC ; CCE., C. & ST., Thiruvananthapuram v. Kerala State Beverages 2014 (300) ELT 217 (Ker.); CCE Mumbai vs. Reliance Media Works Ltd. 2019 (12) TMI 392 - Bombay HC for the proposition/tests in appreciating what constitutes eligible order etc. 5. Learned Additional Solicitor General, replying to the preliminary objections, contends that the objection on the maintainability of appeal is on an erroneous assumption of circumstances in favour of respondent which is, in fact, an issue between the parties in the subject proceedings. The subject matter of the appeal does not deal with duty, valuation, classification or exemption given by a notification, but the substance of the issue for decision is whether, in the facts and circumstances of the case, the status claimed by the respondent for C S Asean Explorer as a foreign-going vessel is sustainable or not? Elaborating his argument, he contends that the order under appeal, among oth....
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....as a foreign-going vessel is not under obligation to pay duty under the Act. To appreciate the above controversy we deem it appropriate to refer to a few findings recorded by the Commissioner in order dated 04.04.2013. Paragraph 154 prefaces that the primary issue for decision in this proceeding, i.e., before him, lies within a small compass and seeks to determine whether the Vessel-C S Asean Explorer qualifies as a foreign-going vessel, as defined under Section 2(21) of the Act. 6.2 In paragraphs 168 and 175 of the order, the Commissioner recorded the following findings: "168. It can thus be seen that the vessel was in fact being paid by the maintenance authority in India for its state of operational preparedness. Operational preparedness when discharged as a function under an agreement and when paid for under the agreement becomes a paid service rendered by the vessel. Even assuming for the sake of argument that the vessel was in fact idling in the Indian waters, I now proceed to examine the provisions of law in this regard. As already discussed in the preceding paragraphs, the definition at section 2 (21) of the Customs Act 1962 does not make provisions for a foreign-going ve....
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.... the ship to have repairs, whether the said ship can be qualified as a foreign-going vessel (emphasis supplied) 2. When the ship C.S. Asean Explorer admittedly stood berthed at Cochin Port for the substantial period without taking voyage to ports/destinations abroad, whether the stores in the ship would be entitled for exemption from. payment of Customs duty on the premise of foreign-going vessel. (emphasis supplied) 7.1 Chapter XV of the Act deals with appeals and revision. The scheme of remedy, by way of appeal and revision to aggrieved party/person, is provided for by the Parliament. The case on hand deals with an order made by CESTAT in exercise of its power under Section 129 of the Act. The aggrieved party, depending upon the complexion of consideration of an issue by the Tribunal, has a remedy of further appeal under Section 130 to the High Court and under Section 130E to the Supreme Court. For convenience, Sections 130 and 130E are excerpted hereunder: "130 Appeal to High Court (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things,....
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....ggrieved party and, in the case on hand, the right of appeal, as noted above, is covered by Sections 130 and 130E of the Act. The scheme of Customs Act envisages redressal mechanism by way of appeal under Section 128 from primary authority to Commissioner; further from the order of Commissioner to the CESTAT constituted under Section 129; from the order of CESTAT to the High Court under Section 130; or to the Supreme Court under Section 130E. The order of the High Court is again appealable under Section 130E to Supreme Court. An appeal is nothing but a proceeding where a higher Forum reconsiders the decision of the lower Forum on questions of fact and questions of law with jurisdiction authority to confirm, reverse, modify the decision or remand the matter to the lower Forum for fresh decision in terms of its directions. An appeal is a creature of Statute and there is no inherent right of appeal. The argument now advanced by Mr Rohan Shah is that the cognizance of the issue now canvased by the appellant is vested in the Supreme Court, but not this Court. 7.3 The jurisdictional facts are appreciated and determined by keeping in perspective the meaning assigned to the words 'assessm....
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....sean Explorer is a foreign-going vessel. Noted that, the Commissioner has taken one view on the circumstances of the case and the CESTAT has taken a different view on the very same set of circumstances to hold that C S Asean Explorer is a foreign-going vessel. Pausing here for a while, the jurisdictional fact for consideration in the instant appeal could be the circumstances set out by the respondent whether would fall within the definition of 'foreign-going vessel'. Therefore, we hold and record that the jurisdictional fact for consideration in the appeal is whether C S Asean Explorer is a foreign-going vessel or not? The respondent laid much emphasis on the definitions of "assessment", "duty", "foreign-going vessel or aircraft", and "stores'' for deciding eligible and ineligible order under Section 130 of the Act. It is commended to this Court, with persuasion, to determine the controversy of jurisdiction vis-a-vis Section130 of the Act, by specifically employing the meaning assigned to applicable words in respective definitions. 8. A legal definition is for the most part inductive generalization derived from judicial experience and in order to be complete and adequate, ....
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.... or passengers between any port or airport in India and any port or airport outside India, whether touching any intermediate port or airport in India or not, and includes- (i) any naval vessel of a foreign government taking part in any naval exercises; (ii) any vessel engaged in fishing or any other operations outside the territorial waters of India; (iii) any vessel or aircraft proceeding to a place outside India for any purpose whatsoever; ****** Section 2(38) "stores" means goods for use in a vessel or aircraft and includes fuel and spare parts and other articles of equipment, whether or not for immediate fitting:" 8.1 The four definitions now referred to or relied on by both the Counsel are with the words both "means" and "includes" as excerpted above. The objection is that Section 130 of the Act has employed the defined words such as "duty", "goods", "value", and "assessment". Therefore, while interpreting Section 130 of the Act, the defined meaning of the Act is kept in mind inasmuch as the issue in question for decision in the appeal is an issue pertaining to levy of duty. The said argument, for consideration of applicable definition while applying Section 130, be....
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....ty; (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. 2A) The High Court may admit an appeal after the expiry of the period of one hundred and eighty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question: 9.1 The Parliament in its wisdom has provided for a further remedy by way of appeal in respect of a few sets of orders of the Tribunal to the High Court. And another set of national importance to the remedy of appeal to the Supreme Court under Section 130E of the Act. Whether the order under appeal is an eligible order or not can be decided by the Golden Rule of interpretation of Section 130 of the Act. So interpreted, Section 130 reads: An appeal shall lie to the High Court from every order passed in appeal ....
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....provides for. The converse of what is stated above comes within the jurisdiction of this Court under Section 130 of the Act. Now coming to the present case none of the above mentioned questions come up for consideration at the first instance before this court. The final question to be decided is whether the imported stores consumed on board without payment of duty. To qualify this the primary question is whether ASEAN Explorer is a foreign going vessel or not. The question of payment of duty, or rate of duty will depend only on the question first posed. Hence the appeal is maintainable only before this court as it squarely fit in under Section 130 of the Customs Act 9.2 Firstly, as noted above, the jurisdictional fact for consideration by the High Court, in the case on hand, is whether C S Asean Explorer is a foreign-going vessel or not, and secondly, what is accepted from the scope of eligible order namely the duty of customs, the value of goods cannot and could not be the scope of subject appeal. In other words, in final analysis and consideration, the consumption of stores could become dutiable if it is held that C S Asean Explorer is not a foreign-going vessel. The other side....