Custom, Excise & Service Tax Tribunal
(1)Lucky Steel Industries vs C.C.-Jamnagar(Prev) on 10 July, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad ^^^ Appeal No. : C/11713, 13780-13784, 14165-14167/2013, C/10182- 10185, 12120-12122, 12439, 12440, 12861, 12862, 12864-12866/2014 Application No. : C/EH/10462-10467, 10469-10473, 10475-10478, 10480-10484, 10535, 10549-10551/2015, C/ORS/10534/2015 [ Arising out of OIA-324-331/2013/CUS/COMMR-A-/JMR Dated 17/09/2013, OIA-279-323/2013/CUS/COMMR-A-/JMR Dated 12/09/2013, OIA-399-421/2013/CUS/COMMR-A-/JMR Dated 29/10/2013, OIA-355-378/2013/CUS/COMMR-A-/JMR Dated 15/10/2013, OIA-79-83/2014/CUS/COMMR-A-/JMR Dated 25/03/2014 Passed by Commissioner of CUSTOMS-JAMNAGAR(PREV) (1)Lucky Steel Industries (2)Y S Investments (3)Rushi Industries Ltd (4)Dynamic Ship Recyclers Pvt Ltd (5)Anand Exports (6)Shital Ispat Pvt Ltd (7)Shanti Ship Breakers Pvt Ltd (8)Shirdi Steel Traders (9)Honey Ship Breaking Pvt Ltd (10)Dhan Steel Pvt Ltd : Appellant(s) Vs C.C.-Jamnagar(prev) : Respondent (s)
Represented by Appellant(s) : Shri Sarju S. Mehta (Chartered Accountant) Respondent (s) : Shri J. Nair, Authorised Representative For approval and signature :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 10/07/2015 ORDER No. A/11292-11314/2015 Dated: 10/07/2015 Per : Mr. P.K. Das, Common issue is involved in these appeals and therefore, all are taken up together for disposal.
2. The appellants filed these applications for Early Hearing of the appeals. After hearing both the sides, we find that the issues involved in these appeals appear to be covered by the decision of the Tribunal, in the case of AG Enterprises Vs. Commissioners of Customs, Jamnagar 2014 (308) ELT 18 (Tri.Ahmd). So, upon consent of both the parties, we take up the hearing of the appeals. We direct that the other appeals on identical issues as mentioned by the Learned Advocate would be treated in the days lists for hearing.
3. After hearing both the sides and on perusal of the records, we find that the appellant filed these appeals against the confiscation, imposition of redemption fine and penalty for contravention of import policy as the appellants failed to produce authorisation from DGFT with regard to import of MGO (Marime Gas Oil) considered as HSD. The appellant imported vessels for breaking purposes. It was noticed that MGO was lying in the tank of the ship engine. According to the Revenue, the said MGO (HSD) would be classified under chapter 27 of the Customs Tariff and is a restricted item. The appellant contended that it would be considered as part of the vessels and classified under chapter 89.08 of the import policy. It is further contended that there is no violation of the policy, as per clarification of the DGFT.
4. We find that issue is no more res-integra in view of the decision of the Tribunal in the case of the AG Enterprises (Supra). The learned counsel also submitted that the goods are not available for confiscation and therefore, confiscation of the goods cannot be sustained as held by the Larger Bench of the Tribunal in the case of Ram Khazana Electronic vs. Commissioner of Customs, Air Cargo, Jaipur 2003 (156) E.L.T. 122 (Tri.-Del). On the other hand, the Learned Authorised Representative for the Revenue submits that in their cases, the goods were released on provisional assessment.
5. We find that the issue is covered by the decision of the Tribunal in the case of AG Enterprises(Supra) in favour of the importer, and therefore there is no need to discuss the submission of the learned counsel on other issues. For the purpose of proper appreciation of the case, we reproduce below the relevant portion in the case of AG Enterprises (Supra).
4.Heard both sides and perused the case records. The? issue involved in all these appeals is as to what should be the classification of HSD/LDO, under the EXIM Policy, which is contained in the fuel tanks of the vessels brought for breaking. As per the CBEC Circular dated 26-1-2013 and the orders passed by Commissioner (Appeals) such fuel needs classification under 27101040 of the Import Policy and is a restricted item to be imported through State Trading Agencies. Appellants, on the other hand, argued that HSD is not separately imported by the appellants and was found contained in the vessel as fuel/ship stores at the time of purchase and no extra price is paid for such fuel. It is observed that DGFT under F. No. IPC/4/5(684)/97/82/PC-2(A), dated 26-6-2013 has opined that surplus fuel stored in the fuel tanks (whether inside or outside engine room) forms a part of the ship/vessels imported for breaking up and should be considered as integrated part of the vessels machinery and is classifiable under 89.08.
4.1 It is further observed that Para 2.3 of Chapter 2? of the Foreign Trade Policy (2009 to 2014), contained in General Provisions Regarding Imports & Exports, is relevant and is reproduced below :-
If any question or doubt arises in respect of?2.3 interpretation of any provisions contained in FTP, or classification of any item in ITC (HS) or HPBv1 or HPBv2, or Schedule of DEPB Rates (including content, scope or issue of an authorization thereunder) said question or doubt shall be referred to DGFT whose decision thereon shall be final and binding. 4.2 As per the above provisions of Foreign Trade Policy? any doubt regarding classification of any item in ITC (HS) or HBPv1 or HBPv2 or schedule of DEPB Rates should be referred to DGFT whose decision shall be final and binding. As per the clarification/opinion of Joint Director General of Foreign Trade, New Delhi, surplus fuel stored in fuel tanks of vessels/ship brought for breaking up is classifiable under 89.08 along with the main vessel. In this regard, Paras 18 & 19 of case law Cine Land v. CC, Chennai (supra), relied upon by the appellants, following has been held by CESTAT, Chennai :-
We?18. find that the appellants had applied to the DGFT, New Delhi for a Merely because the reply was signed by the JDGFT, its validity cannot be discarded. The JDGFT is a Senior Officer in the office of the DGFT. The reply is from the DGFT as per the letter-head. Therefore, obviously the JDGFT has issued it acting in the office of DGFT as per their internal procedures. There are thousands of importers and exporters who apply for such clarifications to the DGFT. It sounds to reason that it would be physically impossible for one DGFT to personally sign replies to these apart from his numerous other responsibilities. Secondly, here there is no certification required of a named authority in the body of a fiscal notification concerning exemption from Customs duty. Such a clarification required from only a named authority is a different requirement than the issue of a clarification on import policy. Therefore, we cannot agree with ld. DR that the clarificatory letter needs to be rechecked by a reference to the DGFT on whether it reflects the opinion of DGFT as it is signed by JDGFT.
We 19. also find that it is now a well settled law that clarifications on Import Policy issued by office of DGFT is binding on Customs as far as ITC Policy is concerned in view of the decisions cited by ld. Senior Advocate supra clarification on these items classification under ITC (HS) and the ITC Policy.
5. In view of above, an opinion/clarification issued by Joint DGFT has to be considered as a clarification issued by DGFT & will be binding on the customs so far as ITC restrictions are concerned under Foreign Trade Policy. However, the same clarification issued by DGFT may not be binding on the Customs for the classification of the same goods under the Customs Tariff Act which is the sole domain of the Customs Authorities. However, so far as classification of the ships/vessel, brought in for breaking up along with surplus fuel, will have to be considered classifiable under Heading 89.08 of the Import Policy as an integral part of the vessel/ship, as per opinion given by DGFT under F. No. IPC/4/5(684)/97/82/PC-2(A), dated 26-6-2013. As the imports under ITC (HS) 89.08 are free without any restrictions, therefore, such MGO/HSD contained in the vessels brought in for breaking up, cannot be held as liable for confiscation under Section 111(d) of the Customs Act, 1962 and no penalties upon the appellants are imposable in the present appeals under Section 112(a) of the Customs Act, 1962. It is also relevant to mention that no ITC action is taken by the Revenue when an ocean-going vessel is converted into coastal-run vessel and only duties are paid on the fuel used during the coastal run.
6. In view of the above discussion, and following the case of AG Enterprises(Supra), we set aside the impugned order and the appeals filed by the appellants are allowed. All the applications for early hearing are dismissed as infructuous.
(Dictated and pronounced in the Court)
(P.M.Saleem) (P.K. Das)
Member (Technical) Member (Judicial)
Abhishek
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