Judgment
1. The dispute in the instant case is with regard to certain goods imported for the purpose of supplying as ship stores to ONGC's drilling rigs in the Bombay offshore. The goods have been confiscated with a redemption fine of Rs. 25,000.00 on the ground that they were unloaded at an unauthorised place, namely, Nhava base. The appellants have also been ordered to pay duty of over Rs. 10 lakhs on the goods and interest on such duty demand.2. Arguing the appeal, learned Counsel, Shri L.P. Asthana, submits that it is an admitted case that these goods were imported for supply as ship stores. The goods were also being unloaded at Nhava base and supplied from there as ship stores from 1987. The Customs Authorities were also aware of such use of the Nhava base for unloading and supplying the goods. He, therefore, submits that they have not committed the offence of unloading imported goods at an unauthorised place deliberately with intent to evade customs duty or to overcome any prohibition. He draws our attention to paragraph 10 of the impugned order where the Commissioner himself accepts this position. He, therefore, submits that confiscation of the goods was not warranted.
With regard to demand of duty, he submits that in respect of ship stores no duty is payable. He also submits that the valuation adopted for the pipes involved in the case is highly inflated. Value of Rs. 30,000.00 has been adopted as against the correct value of Rs. 4750.00.
He also submits that the rate of duty applicable under Section 15(1)(c) (i.e. rate applicable on date of payment) should be applied in the instant case and not the rate in respect of goods entered for home consumption under a Bill of Entry.
3. Heard learned SDR Shri Prabhat Kumar for the Revenue. He submits that the appellant's submission that the goods may be treated as ship stores may be left to be considered by the Customs Authorities, rather than a decision being given in the appeal. He also submits that, the goods having been loaded at an unauthorised place, there could be no valid objection to their confiscation.
4. We have perused the records and have considered the submissions made by both sides. We find that there is no dispute that these goods were imported for supply as stores to offshore oil rigs. It is also admitted that Nhava base was being utilised for a few years prior to the unloading of the goods involved in the instant case for the purpose of unloading such materials and supplying them to ONGC. The Commissioner of Customs has also admitted this position in the impugned order. In the circumstances, we find no justification for the confiscation of the goods. Accordingly, confiscation of the goods is set aside. With regard to demand of duty, we find that the ship stores are exempt from payment of customs duty and the appellant's prayer is that the goods be allowed supply as such. In these circumstances, we find demand of duty also to be premature. Accordingly, we allow the appellant's submission that the goods be allowed to be treated as ship stores and be allowed duty free supply. Therefore, the demand of duty is also set aside. The disputes relating to the valuation of the goods and rate of duty become not relevant as the goods are to be supplied duty free as stores.
Accordingly, we pass no order on those issues. The demand of interest does not survive as duty demand has been set aside. The same was also not maintainable in view of Clause (2) of Section 28AB of the Customs Act, 1962. Thus, the impugned order is set aside in toto and it is ordered that the goods in question be dealt with as ship stores.