Chinnappa Reddy, J. - (1.) The principal questions raised in the two appeals are the same and we are, therefore, disposing of both the appeals by a common judgment. There are, however, some points of difference which we shall mention in the course of the narration of facts.
(2.) In Civil Appeal No. 179 of 1985, Chowgule and Co. Pvt. Ltd. are the appellants. They carry on the business of exporting iron ore to various countries from India. It appears that previously iron ore used to be brought to the Mormugao harbour from various mines in the territory of Goa by barges and unloaded in the harbour. Thereafter, the ore would be loaded on board ocean going ore carriers. Alternately, they would be directly unloaded in stream into the ocean going ore carriers. On account of the shallow draught of the Mormugao harbour which prevented large ocean going ore carrying vessels from entering the harbour or from having iron ore loaded to full capacity on such vessels within the harbour, considerable time was wasted in the loading process resulting in substantial increase of the cost of transporting iron ore from Mormugao. Therefore, in about 1967, the appellant company conceived the idea of acquiring a 'transhipper' into which barges could unload iron ore and from which large quantities of iron ore could be loaded into large vessels in open anchorages. Such a transhipper would have to be specially fitted with special and adequate equipment to carry out those tasks. The operation of loading a vessel in open anchorage by the use of transhippers is described as 'topping up'. On July 26, 1967, the appellant Company applied to the Government of India, Ministry of Transport and Shipping, for necessary permission for "purchasing a second hand vessel of about 15000 DWT for use as a topping up vessel at Mormugao harbour for iron ore exports." By their letter dated January 16, 1968, the Government of India granted their permission subject to certain conditions regarding foreign exchange, etc. Thereafter the appellant company acquired a second hand tanker called "The Tropical Grace" and had it converted at the Yokohoma Shipyard in Japan as a transhipper. "A certificate of condition" in respect of the vessel was given by BUREAU VERITAS. Among the main characteristics of the vessel, it was mentioned in the certificate, "The Vessel originally a T 2 Tanker was converted into an ore loading barge at Yokohoma by Nippon KK, Asano Dockyard from April to September 1969 under the supervision of our society." It was further certified as follows: "The vessel will be entered into the Marine Register Book of BUREAU VERITAS with the following class and notation mark:I 3/3 Ore Carrier, Small Coasting Trade starting from September l969, for a period of four years. The vessel will be mainly employed as an ore loading in the Harbour of Goa (India), with the possibility to extend her exploitation in certain periods of year, as a bulk carrier for small coasting trade. As a result of the aforesaid surveys for conversion and reclassification, the undersigned believes that S/S "TROPICAL GRACE" is at present time in a position to undertake the self-propelled voyage from YOKOHOMA to Goa." The vessel arrived in the harbour of Mormugao on or about October 15, 1969. The Deputy Conservator, Mormugao Goa Port Trust, Mormugao harbour was informed on the same day about the arrival of the vessel and it was stated in the letter, "this is an old 72 Tanker converted and equipped to do the work of topping up of the bulk carriers, after they are loaded at the mechanic plant to the permissible draught." On October 20, 1969, the petitioner company applied to the Government of India for the issue of 'General Licence' under S. 406, Merchant Shipping Act, 1958. It was stated that the general licence was sought to ply the vessel 'for topping purpose in stream at Mormugao harbour.' The name of the ship was also changed to 'Maratha Transhipper'. Licence was granted by the Government of India for use of the vessel for "topping up purposes in stream at Mormugao, Kandla, Bombay and Madras for a period of five years". It appears that this licence was later amended and the purposes for which the licence was granted was treated as "(a) for topping up purposes in stream at any Indian Port; (b) for trading on coast; and (c) for a period of five years from March 5. 1970 to March 4, 1975." On November 29, 1969, the petitioner company informed the Assistant Collector of Customs, Custom House, Mormugao harbour about the acquisition of the vessel Maratha Transhipper (earlier Tropical Grace) for "the purpose of up-topping large size bulk carrier in stream". It was stated that they would be operating the ship within the port limits and that she would serve as a sea barge. It was also stated that normally she would take cargo coming by barges with the help of her own equipment and storing in her own hatches to the extent of 15000 tonnes and thereafter she would go alongside bulk carriers and transfer the ore from her holds into the bulk carriers. This letter was followed by another letter dated November 29, 1969 in which it was stated that S. S. Maratha Transhipper was registered as a "home trade vessel" and that it was capable of three types of operations:- (a) load herself in stream in river barges; (b) up top another vessel by using the cargo from her own hatches; (c) up-top another vessel by using the cargo from barges which go alongside Maratha Transhipper. We may also add here that 'The Maratha Transhipper' possesses all the certificates prescribed by the Merchant Shipping Act and other Maritime Laws to enable her to ply the oceans.
(3.) On December 31, 1969, the Assistant Collector of Customs, Mormugao asked the appellant company to file a bill of entry for stores on board the vessel, 'Maratha Transhipper'. This was followed on February 6, 1970 by another letter from the Assistant Collector asking the appellant company to file a bill of entry for clearance of the vessel 'Maratha Transhipper' for home consumption immediately. The appellant company by their letter dated February 19, 1970 requested the Assistant Collector to enlighten them as to the relevant provisions of the law under which they were required to fill in the bill of entry in respect of the vessel which they said the customs department was aware was an ocean going vessel. The Assistant Collector replied stating, "the function of the vessel, s.s. 'Maratha Transhipper' is in the nature of a sea barge operating within the port limits. Such operations are reserved to the vessels imported for home consumption." The company was requested to file the bill of entry for home consumption immediately. Thereafter there was some correspondence between the company and the Customs. On April 23, 1970, the Assistant Collector of Customs issued a notice to the appellant company asking them to show cause why the bill of entry was not filed in respect of the vessel s.s. 'Maratha Transhipper' which was imported by the company on October 15, 1969 for the purpose of carrying out topping operations within the port limits. The company sent a reply to the notice. A personal hearing was also granted to the company. Thereafter on May 22, 1970, the Assistant Collector made an order requiring the company to file a bill of entry for home consumption in respect of the vessel 'The Maratha Transhipper'. The order of the Assistant Collector was confirmed by the Appellate Collector on July 23, 1970. The Orders of the Assistant Collector and the Appellate Collector were questioned in a writ petition filed in the High Court of Bombay. A learned single Judge of the High Court allowed the writ petition but on an appeal under the Letters Patent a Division Bench of the High Court holding that a vessel was goods within the meaning of S. 46, Customs Act, allowed the appeal and dismissed the writ petition. The company having obtained special leave of this Court under Art. 36 of the Constitution, the appeal is now before us.;