TaxTMI 
TaxTMI 
1987 (2) TMI 62
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.... loaded on board ocean going ore carriers. Alternately, they would be directly unloaded in stream into the ocean going ore carriers. On account of the shallow draught of the Mormugao harbour which prevented large ocean going ore carrying vessels from entering the harbour or from having iron ore loaded to full capacity on such vessels within the harbour, considerable time was wasted in the loading process resulting in substantial increase of the cost of transporting iron ore from Monnugao. Therefore, in about 1967, the appellant company conceived the idea of acquiring a 'transhipper' into which barges could unload iron ore and from which large quantities of iron ore could be loaded into large vessels in open anchorages. Such a transhipper would have to be specially fitted with special and adequate equipment to carry out those tasks. The operation of loading a vessel in open anchorage by the use of transhippers is described as 'topping up'. On July 26, 1967, the appellant Company applied to the Government of India, Ministry of Transport and Shipping, for necessary permission for "purchasing a second hand vessel of about 15000 DWT for use as a topping up vessel at Morm....
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....er amended and the purposes for which the licence was granted was treated as "(a) for topping up purposes in stream at any Indian Port; (b) for trading on coast; and (c) for a period of five years from March 5, 1970 to March 4, 1975." On November 29, 1969, the petitioner company informed the Assistant Collector of Customs, Custom House, Mormugao harbour about the acquisition of the vessel Maratha Transhipper (earlier Tropical Grace) for "the purpose of up-topping large size bulk carrier in stream". It was stated that they would be operating the ship within the port limits and that she would serve as a sea barge. It was also stated that normally she would take cargo coming by barges with the help of her own equipment and storing in her own hatches to the extent of 15000 tonnes and thereafter she would go alongside bulk carriers and transfer the ore from her holds into the bulk carriers. This letter was followed by another letter dated November 29, 1969 in which it was stated that S.S. Maratha Transhipper was registered as a "home trade vessel" and that it was capable of three types of operations:- (a) load herself in stream in river barges (b) up top another vessel....
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....but on an appeal under the Latter Patent a Division Bench of the High Court holding that a vessel was goods within the meaning of Section 46 of the Customs Act, allowed the appeal and dismissed the writ petition, The company having obtained special leave of this court under Article 136 of the Constitution, the appeal is now before us. 4. The facts in Civil Appeal No. 4427 of 1985 are some what different. The vessel in question in this appeal, "Priyamvada" was originally called 'Jagatswamini'. Jagatswamini was an ocean going merchant vessel engaged in foreign and coastal trade in India, the United Kingdom, the continent, Japan, North America, South America and Australia. V.S. Dempo & Co. Private Limited, the appellant in Civil Appeal No. 4427 of 1985 acquired the vessel from its previous owner M/s. Dempo Streamship Limited. The appellant company obtained the permission of the Government to have it converted as a transhipper. The conversion was effected by M/s. A.G. Weser at a West German Shipyard. The ship was fitted with added holds on both sides, cranes, conveyors and ship loading equipments designed for transfer operations. The vessel was surveyed by Germanischer Lloyd....
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....ndia from a place outside India but not including goods which have been cleared for home consumption". "Importer" is defined, "in relation to any goods at any time between their importation and the time when they are cleared for home consumption" as "including the owner or any person holding himself out to be the importer". "Conveyance" is defined to include" a vessel, an aircraft and a vehicle". "Bill of Entry" is defined to mean a "Bill of Entry referred to in Section 46". A "Bill of Export" is defined to mean a "Bill of Export referred to in Section 50." An "Import Manifest or Import Report" is defined to mean "the manifest or report required to be delivered under Section 30". "Stores" are defined to mean "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." 7. Section 12 provides for the levy of duties of Customs on goods imported or exported from India. Section 15 provides that the rates of duty and tariff valuation shall be the rate and valuation in force,- (a) in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect ....
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....re of a conveyance which has brought any imported goods or has loaded any export goods to depart from that customs station without a written order of the proper officer. Section 41 provides that the provisions of Sections 30, 40 and 42 shall not apply to a vehicle which carries no goods other than the luggage of its occupants. Chapter VII, as we said, deals with clearance of imported goods and export goods. We are primarily concerned with Section 46 and we consider it necessary to extract the whole of the section. It is as follows:- 46(1). The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form: Provided that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (....
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.... goods for exportation without payment of import duty if certain conditions are fulfilled. 10. The only other important provision requiring to be noticed by us is Item No. 76(1) of the First Schedule to the Indian Tariff Act which provides for the levy of 40 per cent ad valorem standard rate of duty on "ships and other vessels for inland and harbour navigation, including steamers, launches, boats and barges imported entire or in sections." Along with this entry has to be read the exemption granted by G.S.R. No. 930 which is in the following terms: In exercise of the powers conferred by Section 23 of the Sea Customs Act, 1878, as in force in India and as applied to the State of Pondicherry, the Central Government hereby exempts ocean going vessels imported into India or the State of Pondichery, other than vessels imported to be broken up from, the whole of the duty of customs leviable thereon, provided that any such vessel if subsequently broken up shall be chargeable with the duty which would be payable on her if she were imported to be broken up. 11. In regard to the levy of customs duty the scheme of the Act appears to be as follows:- Goods which are imported into ....
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....s, Shri Setalvad confessed that if a vessel, aircraft and vehicle are required to be excluded from the meaning of the expression 'goods' in Section 46(1) of the Act, he was unable to suggest what other purpose was to be served by the inclusive definition of the expression which expressly brought within its shadow 'vessel, aircraft and vehicle'. He frankly stated that he was unable to point out any provision in the Act into which the inclusive definition could be read. We cannot attribute redundancy to the legislature particularly in the case of a definition in a taxing statute. We must proceed on the basis that such a definition is designed to achieve a result. Under Section 12 of the Customs Act what are dutiable are goods imported into or exported from India and if goods are defined to include vessels, aircrafts and vehicles, we must take it that the object of the inclusive definition was to bring within the net of taxation vessels, aircrafts and vehicles which are imported into India. It is undisputed and indeed it is indisputable that Section 46(1) is a prelude to the levy of duty or a first step in that direction. It must, therefore, follow as a necessary sequi....
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....ading of goods referred to in Section 45 and 48 and argued that the reference to 'goods' here could only be to goods carried and not to the carriers themselves as in Chapter VI. We do not think that we can accept this contention. It may be that in Section 46(2) and elsewhere the word 'goods' is used in such a way as not to include and as contradistinguished from the conveyances in which the goods are carried, depending upon the context. But that does not mean that despite the definition, the word is never to be understood as defined and that it should always be interpreted as never to include vessels, aircrafts and vehicles even when there is nothing in the context justifying their exclusion. We can see no justification for holding that a vessel is not 'goods' for the purpose of Section 46(1). 14. The further question is whether the vessels which have been converted into transhippers to be used in Indian territorial waters for topping up bulk carriers, can be said to be vessels for home consumption merely on that account, even though when they entered Indian territorial waters they came under their own power as ocean going vessels and notwithstanding that....
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....gat Swamini for use as a transhipper at Mormugao port. It is clear from the material placed before us that both the vessels, the Maratha transhipper and Priyamavadha were originally ocean going vessels, that they were converted as transhippers for the purpose of topping up iron ore at Mormugao harbour and that they traversed the open sea from Yokohoma in Japan and Bremen in Germany respectively to reach Mormugao. At the time they entered the territorial waters at Mormugao it was distinctly understood and intended that the vessels were to be primarily used for topping up operations at Mormugao. If ocean journeys were to be undertaken either they were incidental to the primary purpose of topping up bulk carriers at Mormugao or they were occasionally undertaken when topping up operations were not possible at Mormugao during the inclement monsoon season. This much is indisputable that though the vessels came on the high seas to reach Mormugao harbour, they were brought to India primarily for the purpose of topping up operations at Mormugao. 15. In our view, for the purpose of the levy of Customs Duty, in order to determine whether any imported goods are goods for home consumption....