- (1.) These four appeals by the Revenue have a common matrix in the judgment of Customs Excise and Service Tax Appellate tribunal, West Zonal Bench at Mumbai (in short 'the Tribunal').
(2.) The factual background leading to the dispute as noted by the Tribunal in essence is as follows: 2.1. Pride Foramer (the respondent no. 2 in civil appeal nos. 808-810 of 2004 and sole respondent in civil appeal no. 811 of 2004) (hereinafter referred to as the "assessee") was the owner of oil well drilling rigs and drill ships which it leased out to parties engaged in oil exploration or exploitation. It entered into a contract with the Oil and Natural Gas Commission (in short 'ongc') in january 1999 for lease to the latter of a jack-up rig of 300 ft. depth to be utilized for oil exploration and exploitation off the coast of India. The assessee was not original owner of the rig, and in order to comply with the terms of the contract, purchased in March 1999 the rig Pride Pennsylvania from Pride Global Limited, a company registered in the British Virgina Islands at a price of US $ 17 millions. The rig was being deployed for off sea exploration in accordance with the directions of the hirer,i. e ongc, and did not initially enter either indian territorial waters or any areas of the exclusive economic zone designated under the Territorial Waters, Continental shelf, Exclusive Economic Zone and Other maritime Zones Act, 1976 to which the provisions of the Customs Act, 1962 (hereinafter referred to as 'the Act') have been made applicable. In April 2000, the rig was required by the hirer to enter one of such designated areas. On the belief that such entry would constitute import under the Act, assessee filed a Bill of Entry in May 2000 for the rig, declaring the C. I. F. value of the rig to be Rs. 783,439,838. The Bill of Entry was accompanied by an invoice showing details of the value of fixed and loose equipment, spares and consumables on the rig for a total C. I. F. value of U. S. $17,682,690. The invoice was issued by the project office in Mumbai of the assessee and signed by Jean Paul Rabier, its manager in India (the respondent no. 3 in civil appeal nos. 808-810 of 2004). The rig was permitted to be cleared on payment of duty at the declared value.
(3.) Subsequently investigation by the department led it to conclude that the value or price was under declared and that the true value of the rig ought to be rs. 1966,950,295. The rig was placed under seizure in September 2001 and ordered to be released provisionally by the Bombay High Court after securing guarantees and deposits. Notice was issued propos ing to enhance the value of the rig as stated above, proposing its confiscation under clause (m) of Section 111 of the Act on the ground that its value was misdeclared. Penalty was also proposed on the importer, rabier and Bureau Veritas, a marine inspection agency, (respondent no. 1 in civil appeal nos. 808-810 of 2004) whose Singapore office had issued two reports in 1999 and 2000 certifying the value of the rig. The show-cause notice alleged that the values certified by it were improper. After considering the cause shown and hearing the parties, the Commissioner of customs (Import) Mumbai (in short the 'commission') passed the order which was impugned before the Tribunal. He held the value of the rig to be Rs. 1451,893,375 (equivalent to US $ 32.78 million) and demanded differential duty of about Rs. 29.45 crores. He ordered confiscation of the cig with an option to redeem it on payment of fine of Rs. 5 crores, demanded interest on the differential duty, imposed penalties equal to the duty on the company, Rs. 2 lacs on Jean Paul Rabier and Rs. 2 lacs on Bureau Veritas.;