MATSYAFED Vs. COMMISSIONER OF CUSTOMS, KOCHI

JUDGEMENT

(1.) THESE appeals arise out of a common order passed by the Commissioner of Customs, dated 30 -10 -98. Under the above order the Commissioner directed confiscation of two trawlers sold by M/s. Matsyafed to M/s. Sadiq Brothers under Section 111(o) of the Customs Act. A redemption fine of Rs. 1,00,000/ - was imposed. Further he imposed a penalty of Rs. 10,000/ - each on M/s. Matsyafed, Shri Sadiq who purchased the trawlers and on Shri George Chethalan, Shri Roy K. Thomas and Shri N.O. Rajan who are partners of the Boat Yard at Palluruthy which had undertaken the work of scrapping the vessels. It is the case of the Revenue that the fishing trawlers were imported free of duty by M/s. Kerala Fisheries Corporation Ltd., the predecessor of M/s. Matsyafed under Notification No. 262/58 -Cus., dated 11 -10 -58 in the year 1978. The above notification granted exemption from basic import duty on ocean going vessel other than vessels to be broken up. The notification provided that any such vessel subsequently broken up shall be chargeable with the duty which would be payable on her if she were imported to be broken up. Since M/s. Matsyafed had auctioned the above vessel which led to its being broken up, there is violation of the condition of the notification and that duty is liable to be paid on the value of the vessel. The above notification was later superseded by Notification No. 133/87, dated 19 -3 -87. The above notification read as follows : - Exemption to goods of sub -heading Nos. 8901.10, 8901.20, 8901.30, 8901.90, 8902.00, 8905.10, 8905.90 and 8906.00 except if they are imported for breaking up. - In exercise of the powers conferred by sub -section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 262/58 -Customs, dated the 11th October, 1958, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling under subheading Nos. 8901.10, 8901.20, 8901.30, 8901.90, 8902.00, 8904.00 8905.10, 8905.90 and 8906.00 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from,

(2.) IT is contended on behalf of M/s. Matsyafed, appellant in A. No. E/22/99 that it has not violated the condition under which the vessels were imported. They invited quotations from interested parties through tender notices to sell the trawlers as if they are to be used for fishing after repair. If the buyers had scrapped the trawlers M/s. Matsyafed cannot be punished for the same. On the other hand, the appellants in A. No. C/146/99 and C/131 -133/99 would contend that the vessels when sold by M/s. Matsyafed were not in sea going condition. Decision to dispose of the same was taken on the basis of the opinion given by a Committee appointed by the State Government that the vessels are unfit for use as fishing trawlers. It is, therefore, contended by them that the condition under Notification No. 262/58, dated 11 -10 -58 cannot be applied in the present case. When the vessels were broken up, they were not sea worthy and therefore, cannot be treated as ocean going vessels.

(3.) A further contention taken by the appellant in A. No. C/146/2002 and C/131 -133/2002 is the proceedings initiated on the basis of show cause notice which has referred to Notification No. 133/87 -Cus., dated 19 -3 -87 cannot be sustained. Above notification had been rescinded by Notification No. 47/96 -Cus., dated 23 -7 -96 much before the issue of the show cause notice. Reliance could not be placed on the earlier Notification No. 262/58, dated 11 -10 -58 since it had been superseded by Notification dated 19 -3 -87. Apart from the above, a further contention taken before us by the appellant was whether the Commissioner of Customs, Cochin has jurisdiction to initiate proceedings against the appellants when the goods were imported at Vizag and not within his jurisdiction.