Customs, Excise and Gold Tribunal - Delhi
Reliance Petrochemicals vs Collector Of Customs on 20 June, 1997
Equivalent citations: 1997(95)ELT274(TRI-DEL)
ORDER S.L. Peeran, Member (T)
1. The importer has challenged the rejection of their claim for the benefit of exemption Notification No. 320/76-Cus., dated 2-8-1976 in respect of "Pontoons" which had been assessed under Heading 89.07 of the Customs Tariff. There is no dispute as regards the classification in this appeal and the only question is with regard to the availability or otherwise for benefit of the Notification in respect of the said goods, imported by the appellants along with "used equipment, parts Accessories and Auxiliary Equipment of Dredger Amstel" as described in the Bill of Entries dated 28-4-1989 and 24-5-1989 filed by them. The Items 4 & 6 of the Bill of Entry, the goods were described as follows :-
4. Floating pipeline pontoons (vised) dia 9.00 x 4.10 x 3.10 mtr.
6. Anchor pontoons (used).
Both the items were assessed under 8907.90 with the benefit of Notification No. 320/76-Cus. The Assistant Collector of Surat, vide his notice dated 19-6-1989 issued a demand for Rs. 92,67,253 /- on the ground that the benefit of the said notification is not available to floating pipeline pontoons and anchor pontoons as these were for supporting the pipelines during the dredging operation and not for speedy unloading of the goods. He further held that these pontoons are classifiable under Heading 89.07, while pontoons used for the transport of goods are covered by Heading 89.01. The Collector in the impugned order besides dealing with the other points, which we are not germane forus, has held that the notification in question had been issued to facilitate the handling of import/export cargo at minor ports and such other places where the waters are shallow and do not have adequate draft for accommodating the bigger vessels. He has observed that the most essential condition is the utilisation of the pontoons for the purpose of speedy unloading/loading of import/export cargo and this condition had not been fulfilled in the aforesaid' case. He has noted that in the two invoices pertaining to the two consignments, it had been clearly mentioned that the pontoons are for floating pipeline. He has observed that no claim had been made by the supplier or by the importer that the pontoons are required for handling import/export cargo. He has observed that in fact, in column meant for giving the particulars of ITC licence etc. in the Bill of Entry, it had been mentioned in both the Bills of Entry that the goods (including pontoons) are meant for re-export, once the dredging work is over and that the appellants will claim drawback, when the goods are re-exported. Even in the CCP which was presented along with the second Bill of Entry, it had been mentioned that the goods shall be re-exported once the dredging work is completed and that the licencee (importer) shall execute a bond with a bank guarantee for that purpose. Therefore, he has held that it is clear that pontoons were imported for the purpose of supporting a pipeline which was meant for conveying/transporting excavated/dredged material. He has examined the photographs of the said pontoons which showed that the pontoons had a groove in the middle on which a pipeline can firmly rest. Therefore, on these reasonings, he rejected their plea for the benefit of the notification.
2. Arguing for the appellants, the Learned Advocate Shri J.J. Bhat submitted that they have in the first instance filed a miscellaneous application for change of the name from Reliance Patrochemicals Limited to Reliance Industries Limited. In support of the application they have filed Bombay High Court order dated 29-7-1992 and Gujarat High Court order dated 11-8-1992 which has accepted the scheme of amalgamation and for change of the name. As regards the import of the goods is concerned, the Learned Advocate submits that they had already obtained duty drawback of Rs. 62,32,008/- and the amount in dispute is approximately Rs. 29 lakhs. He submits that the pontoons does the function of unloading and fixing of the pipelines. There is no dispute with regard to the nature of the item is concerned. He submits that besides the fixation of the pipelines for dredging purpose, the pontoons were also utilized for loading and unloading. He also relied on the certificate at page 31 of the paper book and submits that the Collector has not given finding on the same. He also submits that the department has not pleaded any proof to disoel this certificate and the claim made by the appellants. The Learned Advocate relied on the ratio of the judgments rendered in the case of Collector of Central Excise v. Mangla Engg. Works Pvt. Ltd. as reported in 1989 (42) E.L.T. 140 and that of Escorts Ltd. v. Collector of Customs, as reported in 1996 (88) E.L.T. 379 (Tribunal).
3. The Learned DR submits that the scope of the notification cannot be extended and that the terms are required to be strictly construed. In this regard the Learned DR relied on the ratio of the Hon'ble Supreme Court judgment rendered in the case of Rajasthan Spg. and Wvg. Mills Ltd. v. Collector of Central Excise, as reported in 1995 (77) E.L.T. 474. It is his contention that the nature of the notification is very clear and that the item should have been imported along with the goods and it should have been utilised only for the purpose of loading and unloading of the goods and in this particular case it is an admitted position that they had not utilised for speedy loading/unloading of the goods, but they had utilised for supporting the pipe lines and for the operation of dredging purpose only. She submits that the pontoons are utilised as bridge between the ship and the shore when the ship is not in a position to reach the shore for the purpose of loading/unloading the goods. While in the present case as is clear from the photographs the pontoons have been laid and the pipelines have been placed over it and have not been utilised at the time of loading and unloading of the goods. She also submits that the certificate has been produced at the delayed stage and it is a self interested testimony and such an evidence is not admissible in terms of the ratio of the judgment rendered in the case of Asea Brown Boveri Ltd. v. Collector of Customs, as reported in 1995 (77) E.L.T. 639.
4. We have carefully considered the submissions made by both the sides and have noted the facts of the case. We have also perused the order of the Bombay and the Gujarat High Court regarding amalgamation of the company and also change of the name. Therefore, the miscellaneous application for change of the name from Reliance Petrochemicals Ltd. to Reliance Industries Ltd. is allowed. The concerned notification in this case is extracted herein below:
"Pontoons, imported with ships. - In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts pontoons which are imported along with ships carrying imported goods, for the more speedy unloading of the imported goods and loading of export goods, from the whole of that portion of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), subject to the following conditions :-
(1) that the importer makes a declaration at the time of import that the pontoons would be re-exported;
(2) that the pontoons are re-exported within six months of the date of importation or such extended period as the Assistant Collector of Customs may allow; and (3) that the pontoons are re-exported by the same ship which brought them or by any other ship under the same shipping agency within the period specified under Condition (2);
Provided that the importer executes a bond in such form and for such sum as may be prescribed by the Assistant Collector of Customs binding himself to pay that sum if the re-export does not take place within the period specified under Condition (2). [Notification No. 320-Cus., dated 2-8-1976]".
5. On reading of the notification, it is clear that the benefit is available provided the following conditions are fulfilled :-
1. Pontoons are imported along with ships carrying the imported goods;
2. for more speedy unloading/loading of the goods;
3. loading of the exported goods, and on subject to the conditions stipulated therein. There is no dispute with regard to fulfilment of the conditions but only the aspect pertaining to speedy unloading of the imported goods and loading of the exported goods has been put to challenge. The importers have contended that they have utilised the imported items for the purpose of speedy loading and unloading of the pontoons as well. In this regard they have relied on the certificate dated 5-9-1989 issued by the Project Manager, which is reproduced herein below :-
"This is to certify that the 4 Nos. Pontoons imported in the vessel "MARIE RIIS" in April 89 and 52 Nos. Pontoons imported in the vessel "SHA HE KOU" in May 1989 were brought for facilitating loading and unloading of goods from the mother vessel. They could also be used to carry and connect steel pipe lines in series for unloading the dredged material from the dredger to the high seas or any other place. Before "MARIE RIIS" sailed from Yambu it was apprehended that the channel depth may not be sufficient to allow her to berth at the jetty and the Pontoons were necessary for the purpose of unloading the goods from the mother vessel to the barges or the jetty. Subsequently, since she was brought to the jetty during the first voyage the Pontoons were not used. During the second voyage the vessel could not come to the jetty as she ran around. When "SHA HE KOU" brought the dredger and the remaining items, she brought the Pontoons also for facilitating off loading of the goods. After unloading the dredger on the high seas she came near to the jetty but not close enough and the Pontoons were used for off loading the cargo."
6. As can be seen from the impugned orders, there is no opinion by the lower authorities. However, it is clear form the above certificate that the Pontoons were not used in the first voyage and it has been used only in the second voyage for off loading purpose. Even if this certificate is accepted, it would have partially satisfied the conditions of the notification in respect of second voyage only. As stated this certificate has not been looked into by the lower authorities and no opinion as regards its validity has been expressed. As has been forcefully argued by the Learned DR, one point is clear that the Pontoons are required to be utilised as bridge between the ship and the shore, when the ship is not in a position to reach the shore for the purpose of loading/unloading the goods. In the case of Collector of Central Excise v. Mangla Engg. Works Put. Ltd. (supra) the Tribunal has noted the definition of Pontoons is which noted herein below :-
"Pontoon is not for venturing out into the sea in. It does not sail the ocean and its uses as a carrier is limited to lightering or as a ferry boat. Often it is no more than a barge, a flat bottomed boat, a lighter or even as a support for a temporary bridge over a river. Whatever it is used for it is not a ocean going vessel."
7. On reading of the judgment, it is very clear that the Pontoons have to be utilised as a support for a temporary bridge over a river and in the present case such Pontoons are required to be utilised for facilitating loading/unloading the pipelines, for which the notification grants the benefit.
8. It was strongly contended by the Learned Advocate that the Pontoons had been utilised for unloading as well as loading of the goods and that the appellants had not admitted that it was not utilised. It was also strongly contended that the lower authorities had not looked into the certificate and its validity was required to have been examined by the lower authorities. In view of these submissions and the fact of the Pontoons having been utilised for loading and unloading purpose during second voyage in terms of the certificate having not been considered, it is but proper that the matter is remanded to lower authorities for de novo consideration. The lower original authorities shall consider the certificate and such other evidence that the appellants would place to show that the Pontoons, in fact, had been utilised for unloading the imported goods. Thus, the impugned orders are set aside and the matter is remanded to the original authorities for de novo consideration. The case shall be decided after giving due personal hearing to the appellants.