AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1015
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....ad of departing to Dubai tug salied for port Fuzerah UAE under cover of the port of clearance dated 02.08.2019. However, on 06.08.2019 tug arrived at Alang encourage. The appellant vide letter dated 05.08.2019 had informed that tug was due to arrive at Alang encourage for breaking purpose. The appellant vide letter dated 14.08.2019 submitted the details of coastal consumption of MGO (high speed diesel) Lub. Oil, provision store and informed that they were ready to pay custom duty on the quantity of provisions and bunkers. Accordingly, manual Bill of Entry No. 03/2019-20 dated 04.09.2019 as permitted by the Commissioner of Customs (prev.), Jamnagar was filed and the same was provisionally assessed for want of test result of bunker. On 20.09.2019 the appellant paid provisionally assessed custom duty of Rs. 7,09,716/- however vide letter dated 01.10.2019 the adjudicating authority after hearing the appellant and considering the written submission passed the final assessment order dated 03.03.2020 and finally assessed Bill of Entry at the same value and same duty as assessed at the time of provisional assessment. As per the adjudicating authority the appellant was required to complete ....
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....th the lower authority has wrongly interpreted coastal duty, coastal goods, coastal cargo. It is the submission that since the vessel along with bunkers is assessed for the purpose of breaking of tug the bunkers cannot be classified separately and cannot be demanded duty of coastal duty. He placed Reliance on the following judgments:- • 1987 (29) ELT 182 (Tri.) Collector of Customs, Ahmadabad V/s Shipping Corporation of India Ltd., • 1989(43) ELT 479 (Tri.) Collector of Customs & Central Excise V/s South East Asia Shipping Company Ltd., • 2000(123) ELT 91 (CAL.) Scindia Steam Navigation Co. Ltd. V/s Collector of Customs, • 2009 (240) ELT 723 (Tri. Ahmd) Jain Marine Services v/s CC, Jamnagar • 1987 (29) ELT 182 (Tri. Bombay) Collector of Customs v/s Shipping Corporation of India Ltd 3. Shri Rajesh Nathan, learned Assistant Commissioner (AR) appearing on behalf of Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that as per the facts of the case there is no dispute that the tug was brought to Alang port for brea....
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....the ship's voyage from Bhavrtagar to Bombay was in Ballast. It was not contended by the Department that the vessel Anupama at any time carried Indian goods or discharged Indian goods in any of the Indian ports. Admittedly, the vessel Anupama was engaged till 12-1-1976 in transportation of imported cargo between Indian ports. Thereafter, it sailed to Calcutta and then to Aden via Kakinada. 9. The Assistant Collector recorded a finding that the vessel has to be considered as having been reverted to coastal trade, firstly because there was a request to revert to coastal trade and secondly a Bill of Entry has also been filed and it was assessed. The Appellate Collector, however, took a different view. Relying on the judgment of the Calcutta High Court in M/s. Turner Morrison, the Appellate Collector held that the finding of the Assistant Collector that the vessel reverted to coastal trade was wrong. 10. The character of the vessel, whether it was foreign going vessel or it reverted to the coastal trade, should depend upon the voyage it performed and the nature of the goods it carried during the voyage. The request of the owners or the agents to revert to coastal trade....
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....owever, did not accept the above contentions. The High Court observed "under the scheme of the Act, it seems to us, that there may be two kinds of shippings, viz., (i) coastal shippings and (ii) foreign shippings. On the facts disclosed, it does not appear to us that this is a case of coastal shipping at all. Nancy Dee was not required to have and did not have a licence for coastal trading vide Appellant's Solicitor's letter, dated 26-12-1970 to the Assistant Collector of Customs, being Annexure B to the petition. The facts reveal that the Government of India had entered into only one contract for carriage of goods. There was only one principal which was carrying the goods, 'Nancy Dee' was an agent of the foreign principal. The entire journey from a foreign port to the port of destination in India was one journey for carriage of imported goods and 'Nancy Dee' took part towards the end in completing the journey. In other words, these super-tankers was required to carry foodgrains from a foreign port to an Indian port, namely, either Paradip or Kidderpore Docks. The super-tankers by reason of their size and weight could not physically reach any of these ports. The super-tankers waite....
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....scharging foreign goods at Bhavnagar, the vessel voyaged to Bombay in Ballast and remained in Ballast from 26-9-1975 to 13-10-1975. This stay of the vessel by itself would not convert it into a coastal trading vessel. In this connection, reference may be made to the Departmental instructions found in the order of the Collector (Appeals). The instructions read "if a vessel completes discharge of foreign cargo at Bhavnagar and then proceeds in Ballast to another Indian port there to load cargo for another foreign port, that in Ballast journey does not constitute a break in its foreign voyage. Such a vessel is not considered to have reverted to coastal trade at any stage at all. It is all along the foreign going vessel. If a vessel after completing discharge of foreign cargo at an Indian port remains anchored in the coastal waters with no immediate future plans either to proceed to another Indian port with or without cargo or to proceed to foreign port with or without cargo then also it is wrong to consider as if it reverts to coastal trade immediately on completion of discharge of the foreign cargo. In such cases the idle time at the Indian port with no plans of future voyages immedi....
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....s from the mother vessels viz. super-tankers and therefore, the voyage of M.V. Anupama should be treated as a continuation of the voyages of the super-tankers and hence no duty should be leviable on the stores of M.V. Anupama. However, the Assistant Collector of Customs, Bhavnagar did not accept the contention of the steamer agent that the ship was a foreign going vessel within the meaning of Section 2(21) of the Customs Act and ordered levy of duty on the stores of the ship which was paid under Bill of Entry No. 31, dated 31-7-1976 and cash No. 1, dated 2-5-1977. The same contention has been repeated during the hearing of the appeal before the Tribunal and the same decisions of the Madras and Calcutta High Courts have been cited during the course of the hearing by the learned advocate of the respondent. Therefore, the main question which requires determination is the applicability of these decisions to the appeal now before the Tribunal. 18. So far as the decision of the Madras High Court in Writ Appeals Nos. 583 to 587/1971, dated 22-4-1976 is concerned the facts of the cases related to supply of ex-bond stores to the daughter vessels without payment of duty, in terms of....
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....86. The Collector's appeal pertains to the levy of duty on M.V. Anupama's stores when she did not remain a foreign going vessel, but reverted to coastal trade as per the request of her agents at Bhavnagar. The phrase "coastal trade" is not defined in the Customs Act, though Chapter XII deals with coastal goods and coasting vessels. Strictly speaking, such a definition is not essential for the consideration of the present appeal. What is important is the crucial fact that as per the agent's request, the Anupama ceased to be a foreign going vessel with effect from 26-9-75 attracting levy of duty on her stores in terms of Sections 12 and 87. 19. However, the facts of the present appeal relating to the stores of M.V. Anupama on first sight appear to be identical with the case of the 'Nancy Dee' decided by the Honourable High Court at Calcutta in appeal No. 314/71 on 3/4-5-1976. Hence, they call for a more detailed examination. The Nancy Dee arrived at Paradip on 4-1-1970 and acted as the daughter vessel upto 23-2-1970. During this period, she acted as the daughter vessel to three super-tankers and made trips from Paradip or Sandheads to Calcutta and sailed finally from Calcutt....
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....g to the levy of duty on the stores of the Nancy Dee went up for consideration before the Single Judge and the Division Bench of the Calcutta High Court out of an order of the Assistant Collector of Customs for Exports (II) of the Calcutta C.H. It would thus imply that the duty on the stores of the Nancy Dee was demanded by the Assistant Collector of Customs, Calcutta and not by the jurisdictional Assistant Collector in charge of Paradip port where the Nancy Dee arrived from a foreign port on 4-1-1970. The nature of the subsequent voyage of the Nancy Dee from Paradip to Calcutta is not explicitly revealed from the judgment of the Hon'ble High Court in Appeal No. 314/1971, dated 3/4th May, 1976. But it appears to be in the nature of the continuation of her foreign voyages as otherwise the duty on her stores would have been demanded by the Assistant Collector of Customs, Paradip. On the other hand, the facts regarding the appeal relating to the duty on the stores of the M.V. Anupama are very clear. She reverted to the coastal trade after arriving at the port of Bhavnagar. Furthermore, the Calcutta High Court was guided by the fact that the Nancy Dee was not required to have a licence....
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.... the decision of the High Court, within whose jurisdiction the Tribunal was located, as the jurisdiction of the Tribunal comprised the whole of India and therefore the Tribunal had the judicial freedom to depart from the decision of a particular High Court. Following this decision of the Tribunal, I find myself unable to agree with the decision of the Calcutta High Court in the case of M/s Turner Morrison & Co. Ltd. 20. Reverting to the case of M.V. Anupama it is seen that after allowing the first appeal of the Shipping Corporation of India Ltd., the Appellate Collector of Customs in his Order No. S/49-2/79 Bhavnagar, dated 29-12-79 substantially reproduced the departmental instructions on the subject for the future guidance of the Assistant Collector. The instructions inter alia stipulated that the voyage in Ballast of a foreign going vessel from one Customs port to another to pick up cargo at the second port for export to foreign ports should be treated as a continuation of the foreign run of the vessel. These instructions also stipulate that in case a foreign going vessel is detained in Customs port for want of cargo or for repairs the reasonable period of detention in ....
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....f these Sections have further to be read with the Rules and Regulations framed by the Government and the Central Board of Excise and Customs for carrying out the purposes of the aforesaid Sections. These are the Import Manifest (Vessels) Regulations, 1971 and the Export Manifest (Vessels) Regulations, 1976. As per the first regulation, the Manifest is required to be filed in the prescribed form and with the prescribed declarations and documents. These requirements further stipulate that if a ship is not carrying any cargo for a particular Customs port, it has to file a Nil cargo manifest at that port. The Anupama would have complied with the requirements of the foregoing Sections and the Regulations when she acted as a daughter vessel to the super-tankers. The super-tankers had arrived from foreign ports and taking into account the requirements of these Sections and the Regulations it cannot be held that the services of the Anupama as a daughter vessel to the super-tankers were a continuation of the voyages of the super-tankers in the course of carrying the goods from the foreign ports to the coastal ports in India. 22. The judgments of the Madras and Calcutta High Courts ....
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.... by the jhansi Ki Rani at Paradip. It is not the appellant's contention that Calcutta was on the itinerary of the jhansi Ki Rani and hence the Anupama's voyage from Paradip to Calcutta cannot be termed as the continuation of the foreign voyage of the jhansi Ki Rani. From Calcutta the Anupama sailed to Kakinada on 9-1-1976 and after loading ore at Kakinada, she sailed for the foreign port of Constanza on 17-1-1976 when she again embarked on a foreign run and became a foreign going vessel at that point of time. Therefore from 26-9-1975 to 17-1-1976, the Anupama was not a foreign going vessel. Therefore, the duty on her stores was correctly chargeable as held by the Assistant Collector of Customs, Bhavnagar in his order, dated 19-10-79. At best the Agents or the owners could have claimed drawback of Customs duty under Section 74- when the Anupama left Kakinada for Constanza on 17-1-1976. 23. In the foregoing circumstances, I am of the opinion that the order of the Assistant Collector of Customs, Bhavnagar charging duty on the stores of the Anupama is correct and that the order of the Appellate Collector of Customs, dated 29-12-1979 is not legal and proper. Accordingly, I set ....