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2020 ] ALCATEL SUBMARINE NETWORKS UK LTD. v. UNION OF INDIA 199

on arrival in the country, for registration as Indian Flag vessel; (iii) Vessels
which are intended for conversion from foreign run to coastal run/trade
(voyage between two or more Indian ports); and (iv) Vessels which are
brought into India for breaking up.
3.2 Foreign flag vessels : These are the vessels that are registered
abroad and its entry into the country is for carrying cargo or passengers, as
a conveyance. Hence, there is no requirement for filing an IGM, bill of entry
for foreing flag vessel which is being used as conveyance. However, the re-
quirement for filing an import manifest in the prescribed manner for the
goods or passengers which are being carried in the vessel, on its entry into
an Indian port in terms of the provisions under Section 30 of the Customs
Act needs to be complied with.
3.3 Indian flag vessel : In terms of the provisions of Part-V of the Mer-
chant Shipping Act, 1958, vessels entering into India for the first time, are
required to be registered with specified authority of the Mercantile Marine
Department as Indian ship, which can then display the national character of
the ship as Indian Flag Vessel for the purpose of Customs and other pur-
poses specified in the said Act. Such Indian ship or vessel may be taken
outside India or chartered for coastal trade in India, only after obtaining the
requisite licence from the Director General of Shipping, under the provi-
sions of Sections 406 and 407, respectively, of the said Merchant Shipping
Act. Hence, in all such cases, the customs declarations such as IGM, bill of
entry is required to be filed with jurisdictional customs authority.
3.4 Vessels for conversion into coastal run : Any vessel could be used
for coastal run/trade after obtaining requisite clearance from Director Gen-
eral of Shipping and on fulfilment of certain specified conditions under Sec-
tion 407 of the Merchant Shipping Act, 1958. In case of foreign going vessel,
exemption from import duties, including CVD, have been extended vide
Serial No. 462 of Notification No. 12/2012-Cus., dated 17-3-2012, subject to
prescribed conditions, which binds the importer to file fresh bill of entry at
the time of its conversion for coastal run/trade any payment of applicable
duty on such conversion of vessel for coastal run/trade. Similarly, excise
duty is also payable on vessels which are being used for coastal trade vide
Serial No. 306 of Notification No. 12/2012-Cus., dated 17-3-2012. Hence, if
any Indian Flag vessel which is used for time being as foreign going vessel
is converted for use in coastal trade or any vessel which is to be used for
coastal trade, there is a need to file a bill of entry for payment of applicable
duty as CVD.
3.5 Vessels for breaking up : Vessel and other floating structures in-
tended for breaking up are liable to payment of applicable duty. AU vessels
for the transport of persons or goods, falling under Heading 8901 (exclud-
ing those which are imported for breaking up) are fully exempt from pay-
ment of import duty under vide Serial No. 461 of Notification No. 12/2012-
Cus., dated 17-3-2012, subject to the condition that the importer should file
fresh bill of entry at the time of its breaking up of the vessel after its impor-
tation. Hence, in these cases, the importer has to file an IGM and bill of en-
try, claiming the exemption as may be applicable, at the time of initial im-

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