Customs, Excise and Gold Tribunal - Bangalore
Surrendra Overseas Ltd. vs Commissioner Of Customs on 27 February, 2004
Equivalent citations: 2004(168)ELT492(TRI-BANG)
ORDER K.C. Mamgain, Member (T)
1. These 3 (three) appeals are filed by M/s. Surrendra Overseas Ltd., Calcutta against the Order-in-Appeal No. 6/99 (V)-Cus., dated 23-6-99, passed by the Commissioner of Customs and Central Excise (Appeals), Hyderabad.
2. Shri M. S. Kumaraswamy, learned Consultant, appeared for the appellants and Shri Kumar Santhosh, learned SDR, appeared for the Revenue.
3. The issue involved in these three appeals is the assessment of ship stores retained on board in the vessels which were reverted to coastal run from the category of foreign going vessels and then subsequently again reverted to as foreign going vessels.
4. Shri M. S. Kumaraswamy, learned Consultant, pleaded that according to the Public Notice 105/69, dated 13-12-1969 which details the procedure for collection of duty on stores in respect of foreign run vessels engaged in temporary reversion to coastal trade, stores consumed in voyage during coastal run have to be determined by way of inventorying the stores before and after the coastal run. This inventorising confines to only all liquor, tobacco products and fuel in the vessels. Food stuffs, paints, etc., are not reckoned for the purpose of duty. These instructions were reproduced in the Board's Circular No. 58/97, dated 6-11-97 issued from F. No. 450/77/95-Cus. IV. In support of his contention, he relied upon the decision of the Tribunal in the case of Collector of Customs & C. Excise v. South East Asia Shipping Co. Ltd. reported in 1989 (43) E.L.T. 479 (Tribunal) and stated that no duty was required to be charged on the ship stores as the vessels were temporarily converted to coastal vessels.
5. Shri Kumar Santhosh, learned JDR, for Revenue submitted that according to Section 2(38) of the Customs Act, 1962, "stores" means 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. He said that the Commissioner (Appeals) has correctly confirmed the demand on the goods which were consumed during the coastal run of the vessels. He stated that it was never in dispute that the vessels are not foreign going vessels when these were reverted to coastal run vessels. Therefore, the decision relied upon by the appellants is not applicable in this case.
6. We have carefully considered the submissions made by both sides. We find that in these appeals, the foreign going ships were reverted to coastal trade and whatever stores were consumed during the period of operation of the vessels as coastal vessels, the duty has been demanded by the Customs Authorities. The Customs Authorities have taken the inventory at the time of reversion of the vessels to coastal trade and again when it was reverted from coastal operations to foreign going vessels, new inventories were taken. Whatever stores were consumed during the period for coastal run, the duty has been demanded and confirmed.
7. We find that Circular No. 58/97, dated 6-11-97 gives procedure for collection of duty on ship store consumed on board the vessel during coastal run and it does not help them. Reliance placed on Public Notice No. 105/69, dated 13-12-1969 is also does not confirm their stand. The decision of the Tribunal in case of Collector of Customs & C. Excise v. South East Asia Shipping Co. Ltd. reported in 1989 (43) E.L.T. 479 (Tribunal) also does not assist the case of appellants. In that case, the foreign going vessels was carrying some coastal cargo along with the foreign cargo between two ports in India and duty has been demanded on ship stores consumed during the course of a compulsory coastal voyage which was necessitated by the existence of coastal cargo on board. It was held that customs duty is not chargeable on ship store consumed during coastal journey. However, in the present case, the ships were reverted from foreign going vessels to coastal vessels and they operated as coastal vessels for sufficient time and then reverted back as foreign going vessels. Therefore duty has been demanded on the stores consumed during the coastal run when the vessels operated as coastal vessels. The duty on the stores consumed during the coastal run of the vessels has been correctly demanded by the lower authorities and we do not have any reason to interfere with the Order-in-Appeal passed by the Commissioner of Customs & C. Excise (Appeals). Accordingly these three appeals are rejected.