TaxTMI 
TaxTMI 
1998 (3) TMI 134
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the ratio in the above decision requires reconsideration by a Larger Bench. Thus, these matters have come up before us. 2. Some facts necessary for these appeals can be stated thus : Section 46 of the Customs Act, 1962 requires the importer of any goods, other than goods intended for transit or transhipment, to present a Bill of Entry for home consumption of such goods in the prescribed form. By a notification issued by the Ministry of Finance (Department of Revenue) Government of India on 11-10-1958, "ocean-going vessels" have been exempted from payment of customs duty. The said notification reads thus : "Under Govt. of India Ministry of Finance (Deptt. of Revenue), Notification No. 262-Customs, dated the 11th October, 1958, ocean-going vessels other than vessels imported to be broken up, are exempt from the payment of customs duty 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." 3. Some persons who imported transhippers (vessels fitted with equipment for transhipping and topping operations) claimed the benefit of the said noti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erations do not make these vessels ocean-going vessels when their primary purpose and the purpose for which they were permitted to be purchased and brought to Indian waters, is to conduct topping up operations in Indian territorial waters and not to serve as ocean-going vessels." 7. Learned Counsel for the importers, in the course of their arguments raised an incidental contention that transhippers were not imported for "home consumption", as the commodity remains intact, without any alteration, even after it is put to use. It was suggested that consumption would involve complete using up of the article to such an extent that identity of the consumed article becomes non-existent. 8. The Word "consumption" may involve in the narrow sense using the article to such an extent as to reach the stage of its non-existence. But the word "consumption" in fiscal law need not be confined to such a narrow meaning. It has a wider meaning in which any sort of utilization of the commodity would as well amount to consumption of the article, albeit that article retaining its identity even after its use. 9. A Constitution Bench of this Court has considered the ambit of the word "consumption"....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n was rendered by a two Judge Bench of this Court in Chowgule & Co. Pvt. Ltd. (supra), a notification was issued on 19-3-1997 by the Government of India in supersession of the earlier notification (which has been extracted above) exempting all the vessels (other than floating structures) from the whole of the duty of customs leviable thereon except those which are imported for the purposes of breaking up. 15. The contention was raised on behalf of the owners of the vessels that the close proximity of the time at which Government issued the subsequent notification is a telling circumstance that Government of India did not intend to exclude transhippers from the category of ocean-going vessels. However, Shri Gauri Shankar Murthi, learned Counsel for the Revenue forcefully contended that the transhippers cannot get the benefit of the first notification at least until the Government of India issued the second notification dated 19-3-1997. 16. The expression "ocean-going vessels", unfortunately, has not been defined in the notification dated 11-10-1958 and that vacuum created room for this dispute. However, Customs Act contained definition for the term "foreign going vessel" in Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within [limits. Once the articles are in circulation and come to be described] and known in common parlance, we then see no difficulty for statutory classification under a particular entry." 21. We do not think that, in the present case, the question whether a transhipping vessel is an ocean-going vessel, can solely rest on the test of its dominant use to which their owners put them at times. Use may vary from season to season, port to port and also managers to managers. So in this area of understanding use of the article stands down-staged, and the Court must look at to know what actually the commodity is. 22. In the Merchants Shipping Act, 1958, the expression "sea-going vessels" is used and defined it in Section 3(41), like this : "Sea-going", in relation to a vessel means a vessel proceeding to sea beyond inland waters or beyond waters declared to be smooth or partially smooth waters by the Central Government by notification in official gazette." 23. Though an endeavour was made before the Tr....