Import of Vessels-Customs Procedure to be followed
BOARD, in a recent instruction, stated,
++ Instances have been brought to notice of the Board that certain ship-owners of Indian flag vessels have imported vessels, which are exempt from payment of duty, without filing Bill of Entry and Import General Manifest (IGM).
++ At the time of their import into India the status of these vessels, which are meant for plying on Indian ports as coastal vessels or as Indian flag foreign going vessels etc., is the same as that of any other class of imported goods.
++ Section 2 (25) defines “imported goods” as any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption.
++ Further, “goods” has been defined under section 2 (22) as to include, inter alia, vessels, aircrafts and vehicles. Hence, these are subject to the same procedure i.e, filing of IGM, Bill of Entry, payment of duty, if any etc., as is applicable in case of other imported goods.
++ Accordingly, it is instructed that the requirement for filing of these documents should be complied with even in cases, where goods are exempt from payment of any duty. Therefore, the jurisdictional Commissioners should review the situation, and take appropriate action for past cases, including adjudication, if warranted. Further, Chief Commissioners may make a reference to the Board for appointment of a common adjudication authority, if so desired, for these cases.
Now, whenever a ship reaches the Indian shores, a Bill of Entry has to be filed and this should apply to not only ships flying the Indian Flags but foreign ships coming with cargo and going back after a few days-they are also technically ships imported. For example, if I drive a truck from a foreign Country loaded with goods, into India, not only the goods, but the truck is also liable to Customs Duty and procedures. The truck logic applies to ships also. And of course aircrafts too!
Now the Board wants to catch all the offenders and adjudicate the cases-a bonanza for the lawyers and consultants. Ships will be seized, confiscated, redemption fine imposed and cases will travel right up to the Supreme Court.
A ship is not a small packet which you can smuggle in your pocket and they had to invariably land in those ports under the control of the Customs. So if they had gone without following the Customs procedures, it is because of the ignorance of the Customs as much as that of the importers.
Our Customs Officers' knowledge of ships is beyond the seas. Sometime back Customs officers in Mumbai and Kakinada had asked importers of ships to produce 'installation certificate'. In DDT 1322-19-03-2010, we had to ask, How on earth can a ship be installed? And where on earth are they expecting a ship to be installed-in the Custom House?
DGFT had to request the Customs Authorities not to insist on installation certificates for such floating objects. [DGFT Policy Circular No. 26/2009-2014, Dated: March 17, 2010]
A similar issue had arisen in Sri Lanka a few years ago when the Customs wanted to collect duty on the ships carrying goods into Sri Lanka. The Sri Lanka Supreme Court ruled that it cannot hold that a vessel arriving in the ordinary course of navigation carrying goods onboard falls within the definition of 'imported goods'.
In India also, the case will go to the Supreme Court.
Why should the Government create and promote litigation? After all, the Government does not want to collect any duty-it wants to only adjudicate-means confiscation, redemption fine and Penalty. AND LITIGATION FOR THE NEXT TWENTY YEARS!
CBEC F.No. 450/79 /2010-Cus.IV Dated : September 23, 2010