MUSTAN TAHERBHAI Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants herein who are inter -alia engaged in the business of ship breaking, purchased a vessel named "Vishva Yash" in 1997 under a tender floated by M/s Shipping Corporation of India (herein after referred to as "SCI") The jurisdictional Superintendent of Customs at Jamnagar assessed the bill of entry dated 20 -5 -1997 filed by the appellants (after the Bill of Sale of April 1997) duty of Rs. 78,73,005/ -. Against the order of assessment, the appellants filed an appeal before the Commissioner of Customs (Appeals) who allowed the appeal by holding that the customs duty liability had been discharged at the relevant time when the ship built by Hindustan Shipyard Limited in their licensed bonded warehouse in 1973 was sold to SCI and imported by them, and there exists no authority under the Customs Act to re -assess the duty already paid, at the time of breaking -up of the vessel. He also held that there was no need for filing a fresh bill of entry at the time of breaking -up. The Revenue preferred an appeal before the Tribunal which awarded its Order No. C -II/1194/03 -WZB dated 22 -5 -2003 allowed Appeal No. E 1762/97 -Bom by way of remand to the Commissioner (Appeals) to decide the issue as to who is the importer of the vessel arid also to decide whether Notification No. 118/59 -Cus dated 13 -6 -1959 granting exemption to vessels imported for breaking -up was in force at the time of clearance of this vessel or whether it had been superseded by Notification No. 163/65 -Cus dated 16 -10 -1965 providing for levy of customs duty.

(2.) PURSUANT to remand direction of the Tribunal, the lower Appellate Authority passed the impugned order holding that Notification 118/59 -Cus was superseded in 1965 and therefore customs duty was leviable on the vessel in view of the proviso to Notification No. 163/65 that vessel shall be deemed to have been imported at the time of breaking -up and holding that the appellants had become the owners of the vessel and held themselves out to be the importer and therefore the appellants were the importers as per the definition of "Importer" under Section 2(26) of the Customs Act 1962. The contention of the appellants that the SCI was the owner of the vessel intended for breaking -up was rejected by the Commissioner (Appeals) on the ground that SCI never had any intention of breaking the vessel and the appellants had willingly accepted under a Memorandum of Agreement dated 22 -3 -1997 entered into with SCI, the liability to pay customs duty. He therefore held that the appellants were required to pay the duty assessed on the subject vessel. Hence this appeal.

(3.) WE have heard both sides. The appellants do not contest the liability of the vessel to customs duty as this issue has been decided by the Tribunal's Order reported in 2003 (56) RLT 101 in their own case relating to import of vessel "MV Jagat Priya". The issue before us is confined to who is the importer of the vessel "Vishva Yash" which was on a coastal run and came from Kandla after fuelling to Sikka in Jamnagar District, where SCI sold and delivered the vessel in April 1997 to the appellants who took permission from the Port Authorities and Customs Authorities and beached the vessel at Sachana ship breaking yard.