Bedi Shipping Ltd. vs Commissioner of Customs (Imports)

This Notice of Motion has been taken out by the applicant in an pending appeal from the order dated 29 February, 2008 of the Customs, Excise and Service Tax Appellate Tribunal (in short "Tribunal") (2008 (231) E.L.T. 657 (Trib)). The Tribunal by the impugned order dated 29 February, 2008 had imposed a penalty of Rs. 2 lakhs upon the applicant. Besides, having upheld confiscation of four barges which were imported in India with an option to redeem the same on payment of redemption fine of Rs. 20 lakhs. However, the option to exercise the redemption fine was not granted to applicant but only to the original owner M/s. Denube Ocean Shipping Agency (M/s. DOSA). Being aggrieved, the applicant has filed an appeal challenging not only the confiscation of the four barges but also not giving the applicants the option to redeem the same. The applicant, during the proceedings before the respondents, had furnished two bank guarantees of Rs. 10 lakhs each in favour of the respondents.

By the present Notice of Motion, the applicant seeks permission to file Bills of Entry for home consumption and clearance of the four barges on payment of appropriate duty.

Mr. Motwani, learned Counsel for the applicant submits that even after the confiscation, the four barges continue to be in possession of the applicants under a supratnama from the respondents. It is further submitted that the erstwhile owners of the barges are not interested in the four barges having already sold it to the applicants. In these circumstances, this application has been necessitated on account of the fact that the four barges have been non-functional for some time and the Gujarat Board Yard Works have issued notices seeking to salvage the barges and scrap them. There are also issues in respect of the barges by the Forest Department in Gujarat. The applicant is ready to secure the revenue by paying the entire redemption fine with the Commissioner of Customs (Imports) along with the applicable duties.

Mr. Rao, learned counsel for the respondent submits to the orders of this Court.

We find that the issue of allowing payment of redemption fine by a person other than the owner of the confiscated goods is pending in this appeal. However, in view of the fact that the barges are a cause of environmental issues, likely to be scrapped by the Gujarat Board Yard Works and are not covered by Insurance, it becomes necessary to consider this application. The impugned order does hold that there is no dispute that the owner M/s. DOSA had sold the barges. The impugned order of the Tribunal allows redemption of the barges by M/s. DOSA. However, M/s. DOSA are not coming forward as they have sold the Barges and now have no interest in them. In the circumstances, if the barges are not allowed to be redeemed, the same would not be available either to the appellant or the respondent as the Gujarat Board Yard Works would scrap the same. The interest of respondent is being protected inasmuch as the applicants are paying the entire redemption fine in respect of the said barges as well as the duty on the barges. It is made clear that in case the applicant fails in their appeal, they would not seek refund of the redemption fine and duty paid by them. The granting of this relief becomes necessary as the respondent has not taken charge of the barges and allowed it to remain with the applicants even after confiscation. The respondent do not seek to have possession of the barges even today.

In view of the above, upon the applicant paying the redemption fine and the applicable duties, the Commissioner of Customs (Imports) will allow the clearance of the four barges. Accordingly Notice of Motion is allowed in terms of prayer clause (a) on the above terms.