Orissa High Court authorizes exemption from customs duties

the Orissa High Court authorized the exemption from customs duties and considered that the notification imposing customs duties when granting the conversion of vessels from “Foreign Going” to “Coastal Run” is not applicable retroactively.

The Divisional Bench headed by Chief Justice Dr. S. Muralidhar and Justice BP Routray observed that the Notice of Exemption dated March 17, 2012 is only prospective in its application and only with respect to the importation of the three vessels i.e. ‘Jag Arnav’, ‘Jag Ratan’ and ‘Jag Rani’ which were first imported into India on 30th April 2003, 13th November 2007 and 26th August 2011 respectively , Entry 462 read with Condition No. 82 of the Notice dated March 17, 2012 will not apply.

The applicant/reviewer is a private sector marine service provider involved in the transportation of crude oil, petroleum products, gas and dry bulk cargo. He is declared a member of the Indian National Ship Owners Association (INSA).

On July 3, 2001, the petitioner acquired from Panama a motor boat, “Jag Arnav”. Under Section 406 of the Merchant Shipping Act 1958 (MS Act), a general license for ‘Jag Arnav’ to undertake world trade and coastal trade in Indian waters has been obtained by the petitioner . “Jag Arnav” arrived at Paradeep Port, Orissa on April 30, 2003 for the first time. At the relevant time, the importation of a foreign vessel was exempt from customs duties pursuant to Serial No. 352 of Notification No. 21/2002-Cus, dated March 1, 2002, as amended, read with relevant tariff heading under Excise Tax. Said entry 352 read as follows: “No. 8901: all goods (excluding ships and other floating structures imported for demolition).”

The lawyer representing the claimant submitted that the claimant is eligible to benefit from the exemption from payment of the BCD subject to the fulfillment of the condition that the CVD will be paid at the time of the conversion of the foreign vessel into a “coastal” vessel. “. The argument is that every “entry” of such a vessel into India from outside India, even after the date of its first arrival in Indian waters, is an import. According to the opposing parties, the Claimant’s assertion that the first time “Jag Arnav” entered India is when customs duties can be levied is not supported by the law and Circular No. 16/ 2012 from the CBES, dated June 13. , 2012.

The tribunal observed that a distinction must be made between the levy and the customs duty on the value of ship’s stores carried on board the ship and which are in themselves “goods”.

In the present case, given that the vessel “Jag Arnav” called for the first time in the Indian port of Paradeep on 30 April 2003 and that on that date it was exempt from payment of customs duties, it can be subject to these rights nine years later. under a condition in another March 2012 exemption notice.

Case title: Great Eastern Shipping Company Ltd. and another Versus Union of India and others

Quote: Request in Brief (Civil) No. 4 of 2013

The applicant’s lawyer: Senior Counsel M. Rohan Shah with Attorney S. Mohanty

Counsel for the Respondent: Deputy Attorney General of India PKPari and Advocate SC Mohanty

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