M/S. Madhav Industrial Corporation vs Commissioner Of Customs (Prev.), ...

[ (Arising out of OIA-93-102/2014/CUS/COMMR-A-/JMR dated 10.04.2014, OIA-115-120-2014-CUS-COMMR-AJMR dated 24.4.14, OIA-159-164/2014/CUS/ COMMR-A-/JMR dated 08.5.2014, OIA-181-187/2014/CUS/COMMR-A-/JMR dated 13.5.2014, OIA-208-212/2014/CUS/COMMR-A-/JMR dated 27.5.2014, OIA-33-50/2014/CUS/COMMR-A-/JMR dated 11.02.2014, OIA-192-199/2014/CUS/ COMMR-A-/JMR dated 19.05.2014, OIA-208-212-2014-CUS-COMMR-AJMR dated 27.5.2014, OIA-279-323/2013/CUS/ COMMR-A-/JMR dated 12.9.2013, passed by Commissioner of Customs, Jamnagar (Prev.), Jamnagar)

M/s. Madhav Industrial Corporation : Appellant (s) M/s. R K Industries, M/s. Ashwin Corporation, M/s. Shree Ram Steel & Rolling Industries M/s. Shree Ram Shipping Industries Pvt. Limited M/s. Shree Ram Vessel Scrap Pvt. Limited M/s. P Patel Ship Breaking Company M/s. Kumar Steel India, M/s. Diamond Industries M/s. Rajendra Ship Breakers Pvt. Limited M/s. Ghasiram Gokalchand Ship Breaking Yard M/s. Priya Blue Industries Pvt. Limited M/s. Priyank Ship Breaking Company Pvt. Limited M/s. Ghaziabad Ship Breakers Pvt. Limited M/s. Rishi Ship Breakers Pvt. Limited M/s. Shree Saibaba Ship Breaking Company M/s. PVR Ship Breaking Company.

VERSUS

Commissioner of Customs (Prev.), Jamnagar : Respondent (s)

Represented by :

For Appellant (s) : Shri Rahul Gajera, Advocate For Respondent (s) : Shri J. Nair, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. H.K. Thakur, Hon'ble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. H.K. Thakur, Hon'ble Member (Technical) Date of Hearing / Decision : 28.04.2015

ORDER No. A/10430-10446/2015 Dated 28.04.2015

Per : Mr. P.K. Das;

Common issue is involved in these applications and therefore all are taken up together for disposal. After hearing the matter, we find that the appeals may be decided at the stage of hearing of early hearing applications.

2. After hearing both the sides and on perusal of records, we find that in all these appeals, the appellants are contesting the imposition of redemption fine and penalties in respect of importation of vessels for breaking purpose. We find that, on the identical issue, the Tribunal in the case of M/s. R.K. Industries and anrs. vs. Commissioner of Customs, Jamnagar (Prev.), by final order No. A/10103-10106/2015 dated 02.02.2015, allowed the appeals of the appellants with consequential relief. The relevant portion of the said decision is reproduced below:-

3. After hearing both sides and on perusal of the records, we find that the appellants imported vessels for breaking purpose. They filed bills of entry of clearance of vessels classifiable under CTH 8908. They classified remnant Bunkers and provisions/ stores lying on the vessels under respective tariff heading. There is no dispute that the Marine Gas Oil (MGO) and High Speed Diesel (HSD) were cleared on payment of duty. Adjudicating authority confiscated the goods for violation of the ITC policy and also imposed redemption fine and penalty on the ground that the import of HSD and LDO is not free and subject to import policy conditions.

4. We find that the Tribunal, on the identical issue, set-aside the redemption fine and penalty in the case of A G Enterprises and Others vs. Commissioner of Customs (Prev.) Jamnagar, vide final order No. A/11210-11318 of 2014 dated 08.7.2014. The relevant portion of the said decision is reproduced as under:-

4.2 As per the above provisions of Foreign Trade Policy any doubt regarding classification of any item in ITC (HS) or HPBv1 or HBPv2 or schedule of DEPB Rates should be referred to DGFT whose decision shall be final and binding. As per the clarification/opinion of Joint Director General of Foreign Trade New Delhi, surplus fuel stored in fuel tanks of vessels/ship brought for breaking up is classifiable under 89.08 along with the main vessel. In this regard, Para 18 & 19 of case law Cine Land Vs CC Chennai (supra), relied upon by the appellants, following has been held by CESTAT Chennai:-

18. We find that the appellants had applied to the? DGFT, New Delhi for a Merely because the reply was signed by the JDGFT, its validity cannot be discarded. The JDGFT is a Senior Officer in the office of the DGFT. The reply is from the DGFT as per the letter-head. Therefore, obviously the JDGFT has issued it acting in the office of DGFT as per their internal procedures. There are thousands of importers and exporters who apply for such clarifications to the DGFT. It sounds to reason that it would be physically impossible for one DGFT to personally sign replies to these apart from his numerous other responsibilities. Secondly, here there is no certification required of a named authority in the body of a fiscal notification concerning exemption from Customs duty. Such a clarification required from only a named authority is a different requirement than the issue of a clarification on import policy. Therefore, we cannot agree with ld. DR that the clarificatory letter needs to be rechecked by a reference to the DGFT on whether it reflects the opinion of DGFT as it is signed by JDGFT.

19. We also find that it is now a well settled law? that clarifications on Import Policy issued by office of DGFT is binding on Customs as far as ITC Policy is concerned in view of the decisions cited by ld. Senior Advocate supra, .clarification on these items classification under ITC (HS) and the ITC Policy.

5. In view of above, an opinion/clarification issued by Joint DGFT has to be considered as a clarification issued by DGFT & will be binding on the customs so far as ITC restrictions are concerned under Foreign Trade Policy. However, the same clarification issued by DGFT may not be binding on the Customs for the classification of the same goods under the Customs Tariff Act which is the sole domain of the Customs Authorities. However, so far as classification of the ships/vessel, brought in for breaking up along with surplus fuel, will have to be considered classifiable under Heading 89.08 of the Import policy as an integral part of the vessel/ship, as per opinion given by DGFT under F.No.IPC/4/5(684)/97/82/PC-2(A), dt.26.06.2013. As the imports under ITC(HS) 89.08 are free without any restrictions, therefore, such MGO/HSD contained in the vessels brought in for breaking up, cannot be held as liable for confiscation under Section 111(d) of the Customs Act, 1962 and no penalties upon the appellants are imposable in the present appeals under Section 112(a) of the Customs Act, 1962. It is also relevant to mention that no ITC action is taken by the Revenue when an ocean going vessel is converted into coastal run vessel and only duties are paid on the fuel used during the coastal run.

3. The appeals filed by the appellants are allowed with consequential relief. Early hearing applications are disposed of.

(Dictated and pronounced in the Court)

(H.K. Thakur) (P.K. Das) Member (Technical) Member (Judicial) ..KL

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