LexABAN LOYD CHILES OFFSHORE LTD. & ANR. versus UNION OF INDIA & ORS.
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[2008] 6 S.C.R. 468 A ABAN LOYD CHILES OFFSHORE LTD. & ANR. V. UNION OF INDIA & ORS. (Civil Appeal No. 2236 of 2002) B APRIL 11, 2008 (ASHOK BHAN AND DALVEER BHANDARI, JJ.) \ Customs Act, 1962: s. 2(21 ), 2(27), 2(28), 12, 86 and 87 - "Foreign going c vessel" - "Territory of India" - "Indian custom waters" - 'Designated area' - Connotation of - 'Oil rigs' stationed within the 'designated area' and carrying on operations in the continental shelf/exclusive economic zone of India, consuming imported 'stores' on board - Levy of import duty D on such 'stores' - HELD: Such oil rigs are not 'foreign going vessels' - 'Designated area falls within customs regime of coastal State (India) -Imported 'Stores' supplied to such oil " rigs will attract import duty u/s 12, and are not entitled to exemption benefit u/ss 86 and 87 - Customs Act stands E extended to designated areas and area of discharge or unloading/loading is within territory of India by virtue of deeming provisions of ss. 6 and 7 of Maritime Zones Act, 1976 - Constitution of India, 1950 - Article 297 - Territorial Waters, Continental Shelf, Exclusive Economic Zone and other F Maritime Zones Act, 1976 - ss. 6 and 7 - International Law - United Nations Convention on the Law of Sea, 1982 -Articles 2,3,33,55,56,57 and 127 - Interpretation of Statutes. .. Constitution of India, 1950: Article 1 (3) - "Territory of India' - Connotation of - G General Clauses Act, 1897 - s.3(28) - Customs Act, 1962 - s.2(27). Interpretation of Statutes: ,f Provisions of Municipal Law and International Law - H 468 ABAN LOYD CHILES OFFSHORE LTD. & ANR. v. 469 UNION OF INDIA & ORS. Interpretation of - HELD: In absence of municipal law A International treaties/conventions can be looked into and enforced if they are not in conflict with municipal law and can a/so be used to interpret municipal laws so as to bring them in consonance with international law. Words and Phrases: B ;;. " Expressions 'contiguous zone', 'designated area', and 'exclusive economic zone' in the context of Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 !Customs Act, 1962- Connotation of. c The appellant-assessees were engaged in drilling operations for exploration of offshore oil and gas. The drilling operations were carried on oil rigs/vessels stationed in the 'designated area' but outside the territorial waters of India. Until November 1993 the appellants and D 7 all other similarly situated companies were permitted to ~ transship imported 'stores' to the oil rigs, for consumption on board, without levy of any customs duty regardless of the fact whether the oil rigs were operating within a designated area or a non-designated area. November 1993 E onwards, the respondent-Revenue authorities refused to permit companies engaged in onward offshore operations to transship 'stores' to the oil rigs without payment of Customs duty. A writ petition filed by the appellant in the year 1994 challenging the levy of customs duty on F .. transshipment of goods/stores imported by drilling contractors and supplied to oil rigs, was allowed by the High Court on the basis of its judgment in Amership's case 1 • But, the subsequent writ petitions filed by the appellants and some other similarly situated companies G were dismissed by the High Court following its judgment in Pride Foramer's case2 . Aggrieved, the assessees filed 1 Amership Management Pvt. Ltd. v. Union of India (1996) 86 ELT 12 (Born) 2 Pride Foramer v. Union of/ndia (2002) 148 ELT 19 (Born) .. H 470 SUPREME COURT REPORTS [2008] 6 S.C.R. A the instant appeals. The question for consideration before the Court was: "whether oil rigs engaged in operations in the exclusive economic zone/continental shelf of India, falling outside B the territorial waters of India, are 'foreign going vessels' as defined by Section 2(21) of the Customs Act, 1962, and ... are entitled to consume imported stores thereon without payment of customs duty in terms of Section 87 of the Customs Act, 1962?" c Dismissing the appeals, the Court HELD: 1.1 The oil rigs carrying on operations in the 'designated area' are not 'foreign going vessels' u/s 2(21) of the Customs Act, 1962, as the 'designated area' falls within the customs regime of the coastal State (India) and D would be deemed to be a part of Indian territory. The area of exclusive economic zone/continen
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