ORDER
Dr. S.N. Busi
1. The present appeal is directed against Order-in-Original No.54/2000 dated 15.9.2000 of Commissioner of Customs, Calcutta a “Tug” (brought into India for the purpose of salvage operation) along with the items on board thereof being the conumsables, viz., cigarettes and HSD Gas Oil, and salvage equipments including wires, stretches, chains, shackls, snath blocks, chain lever block, gaff sockets and other miscellaneous items, were confiscated under Section 111(d) of the Customs Act, 1962 on the ground that the same were imported without a Special Import Licence and allowed redemption of the same on payment of a fine of Rs.20,000/- and also imposed a penalty of Rs.5,00,000/- on M/s Forbes Gokak Ltd. (Patvolk Division), Kolkata.
2. The facts of the case in brief are that the vessel M.V.Prime Value had run aground south of sandheads on 19.7.2000 and was awaiting rescue/salvage operations. The owners of the vessels appointed M/s Smit International Pvt. Ltd., Singapore to do necessary salvage operations. The appellant is the agent of M/s Smit International. The salvage Tug M.V. Smit Sumatra was sent for the said purpose. The appellant approached the Customs on 24.7.2000 and explained to them about the above incident, and also informed that the aforementioned salvage vessel would be arriving at Haldia Port on 25.7.2000 which would sail back within a month. When the vessel arrived on 25.9.2000 the Customs Officers inventorized consumables, bonded stores, extra stores, extra accessories and the equipments meant for salvaging operation and thereupon allowed them to remain on board the vessel. Thereafter, on execution of an undertaking binding themselves for payment of duty, fine and penalty as may be imposed as per the existing rules and regulations in respect of the said vessel and the other goods on board, the above tug was allowed to proceed to the accident site for conducting immediate salvage operation in view of the fact that there was an imminent possibility of 300 kilolitres of fuel oil and 20 kilolitres of gas oil on board the aforementioned aground vessel spilling out into the water. A Bill of Entry was filed by the appellant in respect of the above salvage vessel and the goods on board which were duly noted on 9.8.2000 by the Customs. When the Bill of Entry was pending assessment, the salvage operations had to be called off on 17.8.2000 due to certain technical/operational problems. Thereafter the tug was berthed at Haldia Port for awaiting clearance of the Customs for taking it out of the Indian Territorial Waters, When the export formalities were underway, the appellants had come to learn that customs duty was required to be paid on the consumables and utility items before allowing the said tug with equipments and stores contained therein. The appellants were informed by the Customs that under the Exim Policy in force necessary import licence or approval regarding importation of the Tug from the concerned Ministry, Government of India, was required to be submitted as importation of tug was in the restricted category. The Customs initiated adjudication proceedings. In view of the urgency of the matter, particularly because of the fact that the said tug stopped at Haldia Port since 17.8.2000 and as incurring high demurrage charges in the form of, inter alia, ship detention charges and also because the tug was required for carrying out salvage operation for Smit International elsewhere, the appellants waived Show-cause Notice by a letter dated 25.8.2000 whereupon personal hearing was granted on 28.8.2000 by the Commissioner at which the appellants representative had made submissions. The adjudication proceedings resulted in issuance of the impugned order which is the subject matter of the present appeal.
3. Shri Gautam Chakraborty, learned Advocate, assisted by the learned Advocates Dr. Samir Chakraborty and Shri Sanjay Baid, appearing for the appellants, assails the impugned order on the ground that despite submission of the specific period licence dated 29.8.2000 issued by the Ministry of Surface Transport, Government of India in respect of the said Tug, to the Commissioner under cover of the appellants’ letter dated 31.8.2000, the adjudicating authority had confiscated authority had confiscated the same vide the impugned order dated 15.9.2000. He submits that it is highly imporper to order confiscation of the Tug when the licence obtained from the concerned Ministry was duly submitted to the Customs much before the order was passed. As regards cigarettes, HSD oil on board and salvage equipments, the learned Advocate pleads that the Adjudicating authority had ignored the concerned statutory provisions which clearly and specifically exempted these goods from not only duties of customs but also from requirement of obtaining import licence for importation thereof. In support of this plea, the learned Advocate invites attention to para 3(1)(d) of the Foregin Trade Exemption from Application of Rules in Certain Cases) Order, 1993, Regulation 2 of the Imported Stores (Retention on Board) Regulations, 1963 and Section 2(38) of the Customs Act, 1962. He has also placed reliance on judgment of the Hon’ble High Court of Bombay in the case of Amership Management Pvt. Ltd. vs. Union of India reported in 1996 (86) ELT 15 wherein it was held that any goods which are to be used in a vessel, including fuel and spare parts and other articles of equipments would be covered by the word ‘Stores’. He, therefore, vehemently argues that the Adjudicating authority clearly erred in ordering confiscation of the said Tug along with the items on board as mentioned above. He also argues that imposition of penalty on the appellants is unjustified.
4. Shri V.K. Charturvedi, learned SDR appearing for the Revenue, supports the order impugned on the basis of the reasoning contained therein.
5. After giving our careful consideration to the arguments advanced from both sides, we find that the appellants had obtained a specific licence from the Ministry of Surface Transport, Govt. of India in respect of the said Tug and submitted the same to the Commissioner on 31.8.2000. We notice that the impugned order does make any reference of the said licence. It is not known whether it was placed before the Commissioner before issuance of the said order. As regards the consumabls and other salvage items, the learned Advocate has invited our attention to the relevant provisions of the Foreign Trade (Regulation) Act, 1992 and the Rules and Orders issued thereunder and also the provisions of the Customs Act, 1962 to show how no licence is required for importation of the same as ‘shipstores’. Since the Commissioner did not take cognigence of the licence submitted to the Customs Department, we are of the view that the matter shall go to back to him for a fresh adjudication. Likewise the matter relating to the consumables and other salvage equipments also needs to be remanded to the Commissioner for taking a decision in the light of the submissions made by the learned Advocate. Accordingly, we set aside the impugned order and remand the matter to the Commissioner for a fresh decision within two months from date of receipt of this order. In the de novo proceedings, the appellants shall be afforded reasonable opportunity to present their case.
6. In the result, the appeal is allowed by way of remand.
(Pronounced in Court)