COMMISSIONER OF CUS., VISAKHAPATNAM Vs. EMIRATES TRADING AGENCY

JUDGEMENT

(1.) THE Revenue has filed this appeal against the Order (Original) No. 1/2001, dated 9 -1 -2001 passed by the Commissioner of Customs, Visakhapatnam.

(2.) M /s. Emirates Trading Agency, Dubai (hereinafter referred to as Respondent or M/s. ETA for short) imported a floating crane Diamond of Vizag in 1996 for the purpose of transferring cargo from mother vessels to daughter vessels, who would, in turn, ferry the cargo to the wharf. The floating crane was allowed clearance on duty free under Customs Exemption Notification No. 36/96 -Cus., dated 23 -7 -96 against re -export bond (Sl. No. 179 of the notification - covering all goods falling under CTH 8905.90). After clearance of the floating crane, the Respondent has been filing transhipment application for placing certain ship stores on the floating crane without payment of duty. The DRI investigated the matter and came to the conclusion that the goods imported in the guise of ship stores for placing the same on the floating crane are liable for confiscation under Section 111(m) of the Customs Act, 1962. According to the DRI, the floating crane cannot be considered as foreign going vessel. Hence the Revenue proceeded against the Respondent on the basis of the investigation of the DRI. Duty of Rs. 1,59,55,856/ - under proviso to sub -section (1) of Section 28 of the Customs Act, 1962 was demanded. The goods imported in the guise of ship stores valued at Rs. 2,20,83,797/ - were proposed to be confiscated under Section 111(m) of the Customs Act, 1962. Penalty under Section 114(A) and interest under Section 28AB were proposed. Penalty was also proposed to M/s. V. Dhana Reddy and Company. The adjudicating authority after examining the issue in detail, came to the conclusion that the floating crane can be considered as foreign going vessel. If it is held that the floating crane is a foreign going vessel, then supply of stores to the same without payment of duty would be in order. In that view of the matter, the Revenue will not have any case. The adjudicating authority has also given a finding that proviso to sub -section (1) of Section 28 of the Customs Act, 1962 cannot be invoked in this case as there was no suppression of the facts. In view of this finding, the adjudicating authority had dropped the proceedings against the Respondent.

(3.) THE Revenue is aggrieved over the impugned order of the adjudicating authority and has come before the Tribunal on the following grounds : -