Page 178 - ELT_15th May 2020_VOL 372_Part 4th

568 EXCISE LAW TIMES [ Vol. 372

ing forty per cent as is leviable under section 5 of the Integrated Goods and
Services Tax Act, 2017 on a like article on its supply in India, on the value of
the imported article as determined under sub-section (8) [or sub-section
(8A)] as the case may be.”
16. In this context, it is pertinent to now refer to the following decision :
Order, dated 22-1-2012, of the High Court of Judicature at Bombay (Ap-
pellate Side) in W.P. (L). No. 2921 of 2011 [between : SEAMEC Limited & Anr. and
Union of India & Ors.]. The facts in the above decision are as follows :- ‘A vessel
was originally imported by Essar Shipping in 1988. The vessel is stated to have
been purchased by the petitioners in November, 1993 as an Indian Flag Vessel.
The vessel was sent out of the territorial waters for purpose of repairs. The vessel
returned on or about 1-12-2011 and was seized. The investigation has been taken
over by the Directorate of Revenue Intelligence. After provisional quantification
of the duty liability and the deposit of the same, the petitioners were directed to
approach the Commissioner of Customs (Import) for permission to file a bill of
entry in the value of repairs and machinery/equipment installed between 6-7-
2011 and 26-11-2011 (being the dates of the last departure and arrival of the ves-
sel). The petitioners moved the Commissioner of Customs. The vessel was provi-
sionally released subject to certain conditions. The contention of the petitioners
was that no duty is liable to be paid on the component representing the value of
the vessel estimated at Rs. 53.55 crores since admittedly in 1988 when the vessel
was imported it was exempt from payment of customs duty. Their liability to
pay duty on the modifications made on the vessel after 6th July, 2011, provision-
ally estimated to be in the amount of Rs. 82.09 crores is not disputed. The duty
liability in respect of the modifications amounted to Rs. 12.77 crores and the peti-
tioners expressed willingness to pay the said duty computed on provisional basis
but, they wanted to be permitted to avail the credit available to them under a
scheme. The total value of the vessel was also taken at Rs. 135.64 crores for the
purpose of computing provisional duty. That included two components - (i) val-
ue of the vessel which is taken at Rs. 53.55 crores and (ii) modifica-
tion/upgradation carried out after 6-7-2011 which was computed at Rs. 82.09
crores. The petitioners were undoubtedly liable to pay duty in respect of the
modification/upgradation that has taken place, which amount is computed on a
provisional basis at Rs. 82.09 crores. On that the duty liability assessed provi-
sionally worked at Rs. 12.77 crores. As regards the value of the vessel of Rs. 53.55
crores, it is not disputed by the Revenue that the vessel was imported in 1988
and was not subject to the levy of customs duty. However, the Revenue contend-
ed that in order to avail exemption of duty, it was necessary to file an IGM and to
have a bill of entry duly assessed and it is still to be established as to whether the
procedure was followed when the vessel was originally imported. Prima facie
there was no dispute of the fact that at the relevant time when the vessel was im-
ported, there was a notification exempting the vessel from customs duty holding
the field.’ In that view of the matter, the High Court of Judicature at Bombay
held that for the purpose of securing the provisional release of the vessel under
Section 110A, the Revenue would not be justified in including the value of the
vessel of Rs. 53.55 crores. Hence, the first condition was scaled down requiring to
make a deposit of a duty in an amount of Rs. 12.77 crores.

EXCISE LAW TIMES  15th May 2020  178