Supreme Court - Daily Orders
Commr.Of Customs Preventive vs M/S Mustan Taherbhai on 29 September, 2022
Bench: M.R. Shah, Krishna Murari
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7244 OF 2010
COMMISSIONER OF CUSTOMS (PREVENTIVE) APPELLANT
VERSUS
M/S MUSTAN TAHERBHAI RESPONDENT
O R D E R
1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 15-07-2008 passed by the High Court of Gujarat at Ahmedabad in Tax Appeal No.1430/2006, by which the High Court has dismissed the said appeal preferred by the Revenue and has confirmed the judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Appeal NO.C/1510/05 by which the learned Tribunal allowed the said appeal preferred by the respondent herein and has held that the respondent cannot be said to be an importer of the vessel in question which the respondent purchased for the purpose of breaking and, therefore, not liable to pay the custom duty demanded, the Revenue has preferred the present appeal.
2. The relevant facts for determination of the present appeal in nut shell are as under -
2.1 The vessel in question named “M.V. Vishwa Yash” was manufactured by M/s. Hindustan Shipyards Ltd. and was Signature Not Verified Digitally signed by SNEHA Date: 2022.10.01 13:35:09 IST Reason: delivered in the year 1973 to M/s. Shipping Corporation of contd..
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India (hereinafter referred to `SCI’). On 22.03.1997, the SCI entered into a Memorandum of Agreement (MOA) with the respondent to purchase the said vessel for scrapping. The SCI sought permission for breaking the vessel at their plot at Sachana. According to Clause 5 of the MOA dated 22.03.1997, the delivery of the vessel was to be given to the respondent on “as is where is” basis. As per Clause 3 of the said MOA, the liability of the payment of custom duty would be solely on the respondent/buyer; 2.2 That on 04.04.1997, the Director General of Shipping granted permission to undertake single voyage from port of Sikka to the port of Sachana. The same was in favour of the SCI;
2.3. That on 05.04.1997, the vessel was delivered to the respondent. Thereafter, the respondent filed Bill of Entry on 20.05.1997. At this stage, it is required to be noted that the Bill of Entry was filed by the respondent on the insistence of the Department that unless the Bill of Entry is filed by the respondent, they will not grant `NOC’. The Bill of Entry was assessed vide Assessment Oder dated 20.05.1997 and the duty liability was determined and confirmed to be of Rs.78,73,005/-. The liability of the custom duty was fasten on the respondent treating the respondent as an importer;
2.4 Feeling aggrieved and dissatisfied with the order of contd..
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Assessment holding the respondent liable to pay the custom duty treating the respondent as an importer, the respondent preferred the appeal before the First Appellate Authority. However, the matter reached upto the CESTAT. Relying upon the decision of this Court in Union of India and Others Vs. M/s. Jalyan Udyog and Another (1994) 1 SCC 318, the Tribunal allowed the said appeal preferred by the respondent and held that the respondent cannot be said to be an importer and, therefore, not liable to pay the custom duty. The order passed by the CESTAT has been confirmed by the High Court.
2.5 The impugned judgment and order passed by the High Court is the subject matter of present appeal.
3. Having heard Ms. Aishwarya Bhati, learned ASG appearing on behalf of the Revenue and Ms. Pankhuri Shrivastava, learned counsel appearing on behalf of the respondent and having gone through the impugned judgment and order passed by the High Court as well as the judgment and order passed by the CESTAT, the question which is posed for consideration of this Court is whether in the facts and circumstances of the case, the respondent can be said to be an “importer” of the vessel and, therefore liable to pay the custom duty or not.
4. While considering the aforesaid issue, the decision of this Court in the case of M/s. Jalyan Udyog (supra) is required contd..
-4-be referred to. In the said decision, it is observed and held by this Court that the day on which the permission is granted by the Department for the purpose of breaking, can be said to be the relevant date for the purpose of the levy of duty. Meaning thereby, as observed and held by this Court, the said date can be said to be the “deemed import” and the person in whose favour the permission is granted can be said to be “deemed importer”. In the present case, the permission in favour of the SCI was granted on 04.04.1997. In that view of the matter, the respondent cannot be said to be an “importer” and at the best, SCI can be said to be the “importer”.
5. The submission on behalf of the Revenue that under MOA dated 22.03.1997, the liability to pay the custom duty was fasten upon the respondent and, therefore, the respondent is liable to pay the custom duty is concerned, has no substance. The MOA is between the two individual parties. What is mentioned in the MOA is between the two individual parties and on the basis of that the respondent cannot be held to be importer and liable to pay the custom duty under the Customs Act. The liability to pay the custom duty would be upon the importer under the provisions of the Customs Act only. If ultimately the SCI is held to be the importer and liable to pay the custom duty as per the terms and conditions of the MOA, the SCI can recover the same from the respondent. However, so far as the liability of the respondent to pay contd..
-5-the custom duty under the Customs Act is concerned, the same shall be governed by the provisions of the Customs Act only.
6. In view of the above and as observed hereinabove, the permission was granted in favour of the SCI on 04.04.1997, taking into consideration the decision of this Court in the case of M/s. Jalyan Udyog (supra), 04.04.1997 can be said to be the deemed date of import and as the permission was granted in favour of the SCI, the respondent cannot be said to be importer who has purchased the vessel which was delivered in its favour of 05.04.1997.
7. In view of the above fact situation, it cannot be said that the CESTAT and/or the High Court have committed any error in holding that the respondent cannot be said to be the importer and, therefore, not liable to pay the custom duty. At this stage, it is required to be noted that even the Revenue has also issued notice upon the SCI for recovery of the custom duty relying upon and/or considering the decision of Gujarat High Court in the case of Commissioner of Customs Vs. Dev Krupa Ship Breaking as a protective notice. However, the fact remains the said notice is yet to be adjudicated upon. Therefore, so far as the Revenue is concerned, the Revenue can recover the same from the SCI. However, in any case, the Revenue cannot recover the custom duty from the respondent as an importer for the reasons stated hereinabove.
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8. In view of the above and for the reasons stated hereinabove, the present appeal fails and the same deserves to be dismissed and is accordingly dismissed. No costs.
………………………………………J. [M.R. SHAH] ……………………………………J. [KRISHNA MURARI] NEW DELHI SEPTEMBER 29, 2022 ITEM NO.101 COURT NO.7 SECTION III (Part heard) S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No. 7244/2010 COMMISSIONER OF CUSTOMS (PREVENTIVE) Appellant(s) VERSUS M/S MUSTAN TAHERBHAI Respondent(s) ([ PART-HEARD BY : HON'BLE M.R. SHAH AND HON'BLE KRISHNA MURARI,JJ. ] ) Date : 29-09-2022 This appeal was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE M.R. SHAH HON'BLE MR. JUSTICE KRISHNA MURARI For Appellant(s) Ms. Aishwarya Bhati, ASG Ms. Chitrangada Rastravara, Adv. Ms. Shivika Mehra, Adv.
Ms. Shagun Thakur, Adv.
Mr. Mukesh Kumar Maroria, AOR BLN Shivani, Adv.
For Respondent(s) Ms. Pankhuri Shrivastava, Adv.
Ms. Neelam Sharma, Adv.
Mr. Atreya G.C, Adv.
Mr. Kishan Datta, AOR UPON hearing the counsel the Court made the following O R D E R The appeal is dismissed in terms of the signed order.
Pending application(s) shall stand disposed of.
(NEETU SACHDEVA) (NISHA TRIPATHI)
ASTT. REGISTRAR-cum-PS ASSISTANT REGISTRAR
(signed order is placed on the file)