CHOWGULE & CO. PRIVATE LIMITED ETC. versus UNION OF INDIA & ORS.

Citation: [1987] 2 S.C.R. 351 · Decided: 19-02-1987 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

CHOWGULE & CO. PRIVATE LIMITED ETC. 
A 
v. 
UNION OF INDIA & ORS. 
~---t 
FEBRUARY 19, 1987 
[O. CHINNAPPA REDDY AND S. NATARAJAN, JJ.] 
B 
Customs Act, 1962--Sections 12, 15 ( c) and 46--'Vessel' whether 
,; t 
'goods'-'Goods for home consumption'-Determination of for pur-
poses of levy of customs duty-'Vessels' brought to India for topping up 
operations in Mormugao harbour-Whether ocean going vessels-
~r Necessary to present Bill of Entry. 
c 
'V essel'-'Goods for home consumption'-Meaning of. 
. 1 
The appellants in Civil Appeal No. 179 of 1985 carry on business of 
exporting iron ore to various conntries. Previously iron ore used to be 
brought to the harbour from various mines by barges and unloaded in 
D 
the harbour. Thereafter, the iron ore could be loaded on board ocean 
going ore carriers. Alternately, they could t~ directly unloaded in stream 
into the ocean going ore carriers. Shallow draught of the harbour pre-
vented large ocean going ore carrying vessels from entering the harbour 
or from having iron ore loaded to full capacity on such vessels within the 
> -4 
harbour and considerable time was wasted in the loading process result-
E 
ing in substantial increase of the transporting cost. The appellant Com-
-
pany, therefore, conceived the idea of acquiring a "Transhipper" into 
which barges could unload iron are and from which large quantities 
thereof could be loaded into large vessels in open anchorages, a process 
.... 
described as "topping up". The appellant Company after obtaining 
necessary permission from the Government of India for purchasing a 
F 
. \-
second hand vessel for use as a topping up vessel at Mormugao harbour 
for iron ore exports, acquired a second hand tanker, had it converted as a 
transhipper and obtained "A certificale of Condition." On the arrival of 
the vessel in the harbour the Deputy Conservator of the harbour was 
informed that "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 G 
mechanic plant to the permissible draught." The appellant Company 
then applied to tbe Government of India for the issue of "General 
~ Licence" under s.406 of the Merchant Shipping Act, 1958 stating that the 
general licence was sought to ply the vessel 'for topping purposes in 
stream at Mormugao harbour'. Licence was granted by the Government 
H 
of India "(a) for topping up purposes in stream at any Indian port; (b) 
351 
352 
SUPREME COURT REPORTS 
[1987] 2 S.C.R. 
for trading on coast; and (c) for a period of 5 years from March 5, 1970 to 
A 
March 4, 1975". The appellant Company also informed the Assistant 
Collector of Customs about the acquisition of the vessel 'Maratha Trans-
hipper' for "the purpose of uptopping large size bulk carrier in stream" 
stating that they would be operating the ship within the port limits, that 
B 
c 
she would serve as a sea barge, that normally she would take cargo 
coming by barges with the help of her own equipment and storing in her 
own hatches and thereafter she would go along side bulk carriers and 
transfer the ore from her bolds into the bulk carriers. Subsequently, it 
was also informed that transhipper was registered as a "home trade 
vessel" and it was capable of three types of operations namely, (a) load 
herself in stream in river barges; (b) up-top another vessel by using the 
cargo from her own batches; and (c) up-top another vessel by using the 
cargo from barges which go along side Maratha Transhipper. Thus, "the 
Maratha Transhipper" possessed all the certiflcates prescribed by the 
Merchant Shippii.g Act and other Maritime Laws to enable her to ply the 
oceans. 
D 
The Assistant Collector of Customs asked the appellant Company 
to file a Bill of Entry for stores on board the vessel and for clearance of 
the vessel for home consumption. On query being made by the appellant 
Company as to under what provisions of the law they were required to 
file the Bill of Entry, the Assistant Collector replied stating: "the func· 
lion of the vessel 'S.S. Maratha Transhipper' is in the nature of sea barge. 
E 
operating within the port limits. Such operations are reserved to the 
vessles imported for home consumption." The Assistant Collector of 
Customs issued a notice to the appellant Company to show cause why the 
Bill of Entry was not tiled. After the reply to the notice was sent and a 
personal hearing was granted to the Company, the Assistant CoUector 
made an order

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