COMMISSIONER OF CUSTOMS, MUMBAI versus M/S ABAN LOYD CHILES OFFSHORE LTD. & ORS.

Citation: [2017] 5 S.C.R. 314 · Decided: 02-02-2017 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Dismissed

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Judgment (excerpt)

A 
[2017] 5 S.C.R. 314 
COMMISSIONER OF CUSTOMS, MUMBAI 
v. 
MIS ABAN LOYD CHILES OFFSHORE LTD. & ORS. 
(Civil Appeal Nos. 1784-1787 of2004) 
B 
FEBRUARY 02, 2017 
[DIPAK MISRA AND PRAFULLA C. PANT, JJ.J 
Customs Act, 1962-'- s.111 (a), (b), (/), {g), (h), OJ and (o), 
s.112, s.113 (a), s.115, 46, s.28A, 32 - Violations of- Demand for 
C 
duty - Confiscation of rig brought into India for repairs - The 
Commissioner of customs recorded the finding that the rig in question 
was not declared uls. 46 and other formalities were also not 
undertaken, therefore, ordered confiscation of rig under provisions 
of s. 111 and also held that as rig was imported for home 
consumption, hence, assessees were liable to pay duty - Tribunal 
D 
held that the rig had not entered the territorial waters for purposes 
of oil exploration but for repairs and it cannot be said that rig was 
goods imported for home consumption and covered uls.46 and 
further, that in the given circumstances payme11t of duty 011 rig did 
not arise - However, it opined that provisions of s.111 (f),(g).(h),OJ 
E would be attracted and rig was liable for confiscation - On appeal, 
held: The finding that the rig when repaired in India, it was imported 
for home consumption is unacceptable and faulty - Carrying out 
of repairs on the rig/vessel, would not amount to utilization or 
operation of the vessel/rig in India - Thus, it would be i11correct to 
hold that mere repair of vessel/rig would constitute taxable import 
· F - But, it ca11not be said that owner had not violated the provisions 
of the Act, which are much wider in scope - The Act regulates and 
mandates compliance by foreign going vessels when they enter the 
territorial waters - Provisions of the Act are required to be met and 
complied with, even when vessel/rig is not a 'good' meant for home 
G consumption - Thus, violations recorded by the Tribunal cannot be 
found fault with. 
H 
Dismissing the appeals, the Court 
HELD: 1. The adjudication order refers to and is predicated 
on the rig being brought to the port for repairs in February, 1996 
314 
COMMISSIONER OF CUSTOMS, MUMBAI v. M/S ABAN 
315 
LOYD CHILES OFFSHORE LTD. & ORS. 
for which permission was sought from the Commissioner of A 
Customs under the provisions of notification. The rig 
subsequently moved out of the port after repairs. The rig was 
brought for the second time to the Mumbai port for repair on 91h 
November, 1996 and had remained there till 2•d December, 1996. 
The rig thereafter was taken out and removed from the territorial 
8 
waters of India as is evincible from the adjudication order. The 
rig was for the third time brought to the outer anchorage in 
Mumbai/Mumbai port on 9'h December, 1998 and removed from 
the customs area. On this occasion, for the first time, the 
authorities felt that the rig had been imported into India when 
the rig was brought within the territorial waters for repairs. The C 
adjudication order does not record that the rig was in operation 
within the territorial waters of India. On the other hand, the 
adjudication order does not spell out that the rig did not operate . 
outside the territorial waters of India. The contention raised by 
the owner in this regard was neither specifically rejected not a 
0 
different finding was recorded. The finding was that the rig when 
it is repaired in India, it is imported into India for home 
consumption. The adjudication order holds that the repairs 
undertaken would complete the act of import, for the requirement 
of home consumption was satisfied. The said finding is 
unacceptable and faulty. Mere repair of a vessel is not putting 
E 
the vessel to use in India and would not result in home 
consumption as the vessel was not utilized within the territory of 
India. Repairs are carried on the vessel and not to utilize the 
vessel. It would not amount to utilization or operation of the 
vessel/rig in India. Thus, it cannot be said that the vessel, i.e., 
F 
the rig, was imported into India when it had anchored twice in 
1996 and once in 1998 for the purpose of repair, for the element 
of home consumption is missing even when the vessel, i.e., the 
rig, had entered the territorial waters. Thus, it would be incorrect 
to hold that mere repair of the vessel in 1996 or in 1998 would 
constitute taxable import. [Para 29) [334-D-H; 335-A-B] 
2. The authorities have laid emphasis on the factum that 
the rig was purchased for being used in the oil field of ONGC and 
for

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