TaxTMI 
TaxTMI 
2024 (4) TMI 384
X X X X Extracts X X X X
X X X X Extracts X X X X
....arline", "Richard", "Bright" and "Alden" purchased by Bhavnagar/Alang based importer for breaking purpose were discharged at Bedi Port, Jamnagar by mother vessel MV Xiang Yun Kou. On the transshipment permissions under Section 54 of the Customs Act, 1962 granted by the Jamnagar Customs, the vessels on their own propulsion arrived at Alang on different dates. Upon the arrival of the vessels at Alang, the shipping agent (Appellant) filed Bills of Entry which were assessed by the proper officer and duty payable on bunker consumption from Bedi port to Alang was figured out. The said calculation of bunker figures was figured out on the basis of log books available onboard duly signed by the Master of Vessel. The Appellant however did not accept ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Customs Act, 1962. 4 He also submits that the lower authorities have failed to appreciate that this is a case where tug that was undisputedly meant for breaking at Alang had arrived at Alang on its own after being dropped at Bedi port by a mother vessel arriving from foreign port owing to logistical difficulties. There is no dispute over the fact that the said tug had not performed any coastal voyage or undertaking any coastal operations prior to entry into India at Bedi port or whilst on voyage from Bedi port to Alang and hence, the voyage from Bedi port to Alang must be seen in the context of the voyage undertaken by the mother vessels from foreign port laden with a tug meant for delivery at Alang. The price negotiated between the ove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er. 7. Heard both the sides and perused the available records of the case. We find that the issue to be decided in this matter is whether the appellant is liable to pay customs duty on the bunkers lying inside the tanks of the vessel including the consumption between Bedi Port to Alang or not . We observed that the Section 55 of the Customs Act 1962 prescribes the provisions for liability of duty on goods transited under Section 53 or transshipped under Section 54 as follows : Section 55.-Liability of duty on goods transited under section 53 or transhipped under section 54. - Where any goods are allowed to be transited under section 53 or transhipped under sub-section (3) of section 54 to any customs station, they shall, on their arrival ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....umption on its way to Alang via Bedi port did not change the character of the tug from foreign going vessel to a coastal vessel. 8. Further, to understand the controversy, it would be useful to extrapolate the relevant provisions in the Customs Act, 1962, relating to transit and transshipment 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 on 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 s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Customs Act goods entering into India becomes imported goods and chargeable to duty under Section 12, unless they are exempt from payment of duty by virtue of specific provisions. It is significant to note that ship stores or spares thereof are not exempted from the operation of Section 12, but by virtue of Section 53 of the Act are allowed to be transited without payment of duty. Similar provision is found in Section 54 in respect of the goods imported into a customs port or customs airport but is intended for transhipment of goods. Section 86(2) of the Act inter alia provides that any Imported stores may be transferred to any vessel as stores for consumption therein as provided in Section 87. Section 87 inter alia provides that imported....