- (1.) This Rule is directed against two circulars being Annexures A' and B' to the petition and the notice of demand made on the basis of these two circulars. The petitioner is a limited company having its registered office at Bombay. The petitioner is the owner and/or agent for several sea-going vessels including a vessel named S.S. Jala Pankhi'. It is alleged that the petitioner used the vessels for carrying goods and cargo from various ports to various other ports in India and Abroad. It is stated that the vessel S.S. "Jala Pankhi' arrived at the port of Calcutta from foreign via Nagapattam with general cargo and was cleared on 15th June, 1966 foreign port via Bombay with general cargo. On its voyage from Calcutta to foreign port via Bombay, the said vessel carried foreign cargo as well as coastal cargo for Customs Port at Bombay in India. It is alleged that after clearance of the vessel for foreign port and on way to a port outside India, touching, at the port of Bombay from Calcutta to the foreign ports, the vessel still "was a foreign-going vessel" under the provision of Section 2(21) of the Customs Act, 1962 . The said vessel during its voyage from Calcutta to foreign port via Bombay carried coastal goods as also imported stores. It is stated that the coastal cargo was larger in quantity than the said cargo for foreign port as were being carried by the said vessel, the freight earned by the said vessel for carrying cargo to foreign ports was much larger than the freight earned from carrying the said coastal cargo. It is stated that under the provision of section 87 of the Customs Act, 1962, any imported stores on board a vessel may without payment of duty be consumed thereon as stores during the period such vessel is a foreign going vessel. It is stated that the S.S. Jala Pankhi during the whole of its voyage from Calcutta to Bombay was a foreign-going vessel and as such the imported stores on board the said vessel could be consumed without payment of any Customs Duty during the period of the voyage from Calcutta to foreign ports via Bombay. By the Regulations, called the Imported Stores (Retention on Board) Regulations, 1963, made under the provisions of Section 157 of the Customs Act, 1962 , it was provided that imported stores on board a vessel arriving from a foreign port may remain on board of such a vessel without payment of Import Duty le via ble during the period such vessel is not a foreign going vessel, subject to the condition laid down in the said Regulations. It is stated that the said Regulations do not apply to imported stores on board a vessel during the period it is a foreign- going vessel. On 5 th May, 1966 the Collector of Customs issued a circular stating that all foreign vessels permitted to carry coastal cargo on a particular voyage will have to submit a declaration in the form prescribed and if the major portion of the cargo is to be coastal, duty will be le via ble on the consumable stores unless the procedure in the Annexure to the Circular was followed. The circular is in the following terms : - Circular As the Steamer Agents are aware there has been considerable delay in the recovery of duty on stores of vessels transferred from foreign trade to coastal trade. The following procedure will henceforth apply :- All Indian vessel and all foreign vessels permitted to carry coastal cargo on a particular voyage will have to submit a declaration in the following form along with the entry outward application; "We hereby declare that to the best of our knowledge the major portion of cargo (whether loaded at foreign ports or at Indian ports) to be carried between Calcutta and the next Indian port of call will be foreign/coastal" (*Delete whichever is not applicable). If the major portion of the cargo is to be coastal, duty will become leviable on all consumable stores unless the procedure in the Annexure is followed. M.G. ABROL Collector of Customs Custom House, Calcutta, The 5th May, 1966 File No. S41-110/65 Imp. ANNEXURE If the Steamer Agents do not wish to pay duty on the entire quantity of consumable stores, they must apply for the services of a Preventive Officer to inventories and seal the stores on board at the time when unloading of the foreign cargo for Calcutta is finished. Thereupon the Preventive Officer shall make an inventory of all consumable stores and shall seal (a) Alcoholic liquor, cigarettes, cigars and pipe tobacco; (b) Consumable stores which cannot be identified as foreign. If the Steamer Agents so desire, they may put the stores in separate room or almirahs which could be sealed. If any stores required to be sealed are not sealed because the ship wished to use them during coastal run or because it is not practicable to seal them, duty will be levied on such stores. Duty will also have to be paid on the entire quantity of fuel unless the coastal run was less than the imported quantity. When after the coastal run the vessel reverts to foreign trade, the seal and the original inventory shall be checked by the Customs Officer on an application made by the Steamer Agents. The Customs Officer will indicate the quantity remaining unconsumed on the original inventory. A bill of entry should then be submitted within 15 days of the reversion to foreign trade for all the stores on which duty is payable".
(2.) By another circular dated 23rd May, 1966 , the Assistant Collector of Customs for Exports made provision for recovery of duty on stores of vessels transferred from foreign trade to coastal trade. The said circular is Annexure B' to the petition. These two circulars inter alia provide for sealing of all consumable goods in a foreign-going vessel carrying on coastal trade and/or payment for Customs duty on such stores. The petitioner objected to the said circulars and demanded withdrawal of the said circulars being in violation of the Customs Act itself. The petitioner by letter dated 28th September, 1967 issued by the petitioner's Solicitors represented to the respondent that no duty is payable in respect of the said vessel. The respondent however by letter dated 24th November, 1967 wrote back to the petitioner that the vessel in question terminated foreign voyage after discharging its entire cargo at the Calcutta Port. On its further voyage from Calcutta it picked up a small quantity of cargo for the foreign port and major portion of coastal cargo for customs Port and therefore the Assistant Collector held that the vessel was engaged in the carriage of coastal cargo to the Customs ports and as such the charge of duty on the imported stores consumed during the coastal voyage was correct in law. The petitioner challenged the demand and moved this Court.
(3.) On behalf of the respondent affidavit has been filed stating, inter alia that the vessel was foreign-going vessel within the meaning of the provision of the section 2(21) of the Customs Act , 1962. It is stated that during the voyage from Calcutta to Foreign Port or ports via Bombay the said vessel carried cargo meant both for Foreign ports as well as for the Coastal ports of India. The quantity of cargo which were being carried by the said vessel for the Coastal ports of India was much more than the cargo which was being carried for Foreign ports and as a result the said vessel of the said voyage was deemed to be on a coastal voyage or run. It is stated that as the vessel in question was carrying cargo for foreign ports and the major portion of which was coastal cargo, the circular impugned applies and the petitioner must pay the Customs duty for the imported stores on board the said vessel and which could not be consumed without payment of any Customs duty. It is stated that the Imported Stores (Retention on Board) Regulations, 1963 is applicable to the imported stores. As the vessel in the said voyage was carrying predominantly coastal cargo she could not be considered to be a foreign going vessel and therefore any imported stores on the board is liable to pay Customs Duty. It is further stated that the demand made by the respondent for submission of Bill of entry in respect of the imported stores consumed in the said vessel is legal and is valid one. The respondent it is stated, is entitled to levy and collect Customs duty which is payable in respect of the imported stores on board of the vessel consumed during the coastal voyage. It is further stated that the circular and demand are not made in excess of the exercise of powers under the Imported Stores (Retention on Board) Regulations, 1963 and is not in excess of provisions of section 87 of the Customs Act, 1962 . The respondent has also raised the plea of alternative remedy provided in the statute and under Art. 226 the application is not maintainable in respect of the matter where the reliefs are provided in the Act itself. In the affidavit-in-reply the petitioner reiterated this statement made in the petition.;