The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that entry to India for Breaking Recycling Purpose Only Not contravention of UNSC resolution and Order Prohibiting Vessels from Importation is not valid.
M/s. KPG Enterprise, the appellant challenged the Order-In-Original by which Commissioner of Customs (preventive) Jamnagar has held that Vessel MT Capricorn designated by the Libya Sanctions Committee (“Committee”) of the Security Council of United Nations (“UNSC”) was not permitted to enter into Indian Port having been prohibited vide S.O. 2158(E) dated 20.06.2016 issued by the Ministry of External Affairs (MEA).
The appellant is the importer of the Vessel, M/s. Campass Shipping & Trading Limited (UAE) is the seller of the vessel, M/s. Soham International, Bhavnagar is the authorized signatory of M/s. Campass Shipping & Trading Limited (UAE) and M/s. Admiral Shipping Agency, Bhavnagar is the agent of the owner of the ship and has provided services of clearance of vessels with the various authorities in India (“Appellants”).
M/s. KPG Enterprise imported a vessel for breaking purposes at Alang Ship Recycling Yard declaring the same as MT Capricorn vide Bill of Entry No. 5201250 dated 14.02.2018. Old and Used Ship is covered by chapter 89080000 of the First Schedule to Customs Tariff Act, 1985 and the same is freely importable.
The officer of customs after verifying the details in the Bill of entry, assessed duty amounting to Rs. 65,54,957/- which was paid by the importer and thereafter granted out of charge on 19.02.2018 under section 47 of the Customs Act, 1962 permitting clearance of the vessel for home consumption.
Gujarat Maritime Board granted cutting/recycling permission and while the vessel was part-broken, officers of DRI on 03.04.2018 seized the same on the ground that the entry of the subject vessel was prohibited by Resolution No. 2146 (2014) of the UNSC read with S.O. dated 20.06.2016 of the MEA.
The impugned Order is passed by which the subject vessel is held liable for confiscation under section 111 (d) of the Act and a penalty of Rs. 60,00,000/- was imposed upon the importer and Rs. 25,00,000/- penalty was imposed under section 112 (a) & (b)(i) of the Act upon the importer and other co-noticees.
It was contended that no such prohibition has been provided by the said S.O dated 20.06.2016 nor by any notification issued under section 11 of the Act and in absence of any express prohibition by way of Order or Notification, it cannot be said there was prohibition in force attracting section 111(d) of the Act.
A Coram consisting of Mr Ramesh Nair, Member (Judicial) Mr Raju, Member (Technical) observed that the subject vessel even when designated by the committee, was entered into India for breaking/recycling purposes only.
It was observed that the vessel was brought to India without cargo for breaking/recycling purposes on 10/14.02.2018 and there appears to be no contravention of any UNSC resolutions in force.
The Tribunal stated that there is no sufficient material to substantiate the case of misstatement. While allowing the appeal, it was held that “since the vessel cannot be said to have been imported contrary to any prohibition in force, redemption fine and penalties upon the appellants imposed by the impugned order are liable to be set aside.”
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