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to vessels imported for breaking-up was in force at the time of clearance of this vessel or whether it had been superseded by Notification No. 163/65-Cus dated 16-10-1965 providing for levy of customs duty.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of the Tribunal, the lower Appellate Authority passed the impugned order holding that Notification 118/59-Cus was superseded in 1965 and therefore customs duty was leviable on the vessel in view of the proviso to Notification No.163/65 that vessel shall be deemed to have been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.
4. We find that the issue in dispute stands settled by the decision of the Tribunal in the case of Commissioner of Customs v. Dev Krupa Ship Breaking Order No. A/778/WZB/2004 C II dated 03-09-2004. In this case the Tribunal held as under: "Examining the plea of extending the fiction of law to hold the import being effected on the date the vessel is broken up as held by the apex court in the case of Jalyan Udyog cannot bring liability of the importer on the Respondent. It is found the date on which the vessel is broken up would be the date on which it is taken for breaking i.e. the date of transfer from the Shipping Corporation of Indian to the Respondent and not the date of beaching at Alang and that date the importer would be Shipping Corporation of India." The Tribunal held that the duty demand as assessed on the bill of entry filed by the Respondent cannot be upheld and the respondents are not liable to pay the duty so assessed, and upheld the order of the Commissioner (Appeal) and dismissed the appeal of the Revenue. The appeal of the Revenue against this order was dismissed by the Hon'ble Gujarat High Court by its order dated 6-12-2004 reported in 2005 (181) ELT 14. The Hon'ble High Court held that none of the questions framed by the Revenue in the statutory appeal filed under the provisions of Section 30 of the Customs Act 1962, including the question as to whether the relevant date on which the vessel is broken up would be the date on which it is taken for breaking, i.e. the date of transfer from Shipping Corporation of India to the respondents and not the date of beaching at Alang and on that date the importer would be Shipping Corporation of India, can be said to be questions of law and that even otherwise, no interference is called for by the court. This judgment has been followed subsequently in the case of Commissioner of Customs (P), Jamnagar v. Khanbhai Essoofbhai . The ratio of the Dev Krupa order cited supra is applicable on all fours to the facts of the present case wherein the vessel came to Sikka ( MV 'State of Haryana' purchased by Dev Krupa Shipbreaking came to Porbondar where it was sold for ship breaking) and beached at Sachana (MV 'State of Haryana' was beached at Alang) 5. The decision of the Hon'ble Gujarat High Court in the case of Haryana Ship-Breakers Private Limited relied upon by the Ld SDR holding that the date of determination of rate of duty is the date of presentation of bill of entry which is to be presented under Section 46(1) of the Customs Act when the vessel itself being goods, was imported and that rate of duty is the rate as applicable on actual arrival of goods, to support his contention that the appellants are the importers as they filed the bill of entry, is contrary to the judgment of the Apex Court in Jalyan Udyog wherein it was held that since the date of breaking up is uncertain and also because no ship can be broken up for scrap, except under prior permission granted by the Director General of Shipping (in the present case the Director General of Shipping granted permission to SCI to undertake single voyage from the port of Sikka to the port of Sachana without cargo or passengers on board, on 4-4-1997) the date of breaking up contemplated by the proviso to Notification 163/65 Cus dated 16.10.1965 which provides that no ocean going vessel subsequently broken up after import shall be chargeable with duty which would be payable as if it were then imported to be broken up, should be deemed to be the date on which the permission for scrapping / breaking is granted by the Director General of Shipping. Therefore the Gujarat High Court's decision in the case of Haryana Ship Breakers Private Limited which has not noticed the Apex Court judgment in Jalyan Udyog, can not be followed in preference to the Apex Court's decision.
6. Following the ratio of the Tribunal's order in Shree Dev Krupa Ship Breakers supra, we answer the issue in dispute by holding that it is the Shipping Corporation of India which is the importer of the vessel "Vishva Yash" and that the appellant is not importer there of, and accordingly hold that the duty demand levied on the appellant is not sustainable. Therefore we set aside the impugned order and allow the appeal.