GREAT EASTERN SHIPPING COMAPANY LTD vs UNION OF INDIA

C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8103 of 2012
FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE A.S. SUPEHIA Sd/-

and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI Sd/-

==========================================================
Approved for Reporting Yes No
√
==========================================================
GREAT EASTERN SHIPPING COMAPANY LTD
Versus
UNION OF INDIA & ORS.
==========================================================
Appearance:
MR ROHAN SHAH, SENIOR ADVOCATE WITHMR HARDIK P MODH(5344)
for the Petitioner(s) No. 1
MS MAITHILI D MEHTA(3206) for the Respondent(s) No. 1
MR CB GUPTA(1685) for the Respondent(s) No. 2,3,4
==========================================================
CORAM: HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

Date : 24/06/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. The present writ petition has been filed by
the petitioner, which is a private sector
shipping service provider with its fleet of 34
(owned) vessels, seeking following relief:
“25a. Declare that on a true and proper construction
of (I) the Notification No. 12/2012 CUS dated
17.03.2012 the same is applicable to the vessels
entered into India for the first time after the said
Notification came into effect i.e. 17th March, 2012
and does not apply to previous imports of vessels in
terms of Notification 21/2002-Cus. dated 1st March,
2002, and, (ii) Notification No. 94-96-Cus. it is
applicable and relevant in cases of re-imports, where
th
a initial import occurred prior to 17 March, 2012,
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
and to pass such orders as this Hon’ble Court may
deem F.I.R. and proper in the facts and circumstances
of the present case;”
2. At the outset, learned Senior Advocate
Mr.Shah has submitted that the issue is no more
res integra in view of the following decisions in
the case of:
(I) Great Eastern Shipping Company Ltd. vs.
Deputy Commr. of Cus. Import, 2020 (372) ELT 559
(A.P.) rendered by the High Court of Andhra
Pradesh at Hyderabad
(II) Great Eastern Shipping Company Ltd. And Ors.
vs. Union of India and Ors., 2022 (379) ELT 318
(Ori.) rendered by the High Court of Orissa at
Cuttack
(III) The Great Eastern Shipping Company Ltd. vs.
Union of India and Ors., rendered by the High
Court of Judicature at Madras vide judgement
dated 05.01.2026 passed in Writ Petition No.19298
of 2012 and allied matters.
3. Learned Senior Advocate Mr.Shah has further
pointed out the interim order dated 13.12.2012
passed by the Coordinate Bench of this Court and
has submitted that the action of the respondents
applying notification No.12/2012-CUS dated
17.03.2012 with retrospective effect and levying
duty of customs, as referred therein, is illegal
and contrary to the settled legal precedent. It
is submitted that the vessels belonging to the
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
petitioner namely, Jag Aabha and Jag Prerna were
granted general license to undertake worldwide
trade and coastal trade in Indian waters. It is
submitted that vessel Jag Aabha first entered
into Indian territory on 23.12.2008, and was
first converted into coastal run vessel on
20.07.2009, whereas vessel Jag Prerna entered
Indian territory on 30.07.2008 and the date of
first conversion into coastal run vessel is
12.02.2010 with full exemption from duties in
terms of Sr.No.352 of notification No.21-2002-CUS
dated 01.03.2002. It is contended that after its
importation into India, Jag Aabha continued to
operate as a foreign going vessel, carrying and
transporting cargo of various kinds and having
its discharge or loading ports including India.
It is further submitted that the vessels entered
into Indian waters and left Indian ports after
obtaining relevant clearances from Customs
authorities under Section 42 of the Customs Act,
1962 (for short “the Act”). The details are
provided on page No.17 of the writ petition.
4. Learned Senior Advocate Mr.Shah has submitted
that as required by the Customs authorities, and
as a matter of general practice followed in the
industry, whenever the vessel was converted to a
coastal run status, applicable Customs duty was
paid by the Petitioner on the bunker, stores,
spares, etc., which are expected to be used
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
during the course of coastal run, and cleared on
provisional assessment and upon completion of the
coastal voyage or contract, the said vessel was
re-converted and proceeded on foreign run and at
this juncture, the clearance of stores, etc. was
finally assessed and differential duty paid or
refund claimed. It is submitted that after having
reverted from coastal status, the vessels sailed
outside India and when they returned after
completion of voyage in the year 2012 and entered
India's territorial waters and when they were
sought to be converted for a coastal run status,
for operation in India, the respondent No.4
refused to permit the clearance of vessels,
unless the petitioner filed an undertaking that
they would file Bill of Entry as per Notification
No.12/2012-CUS dated 17.03.2012 and pay
applicable Customs duty, in terms of the Impugned
Notification. He has submitted that the
petitioner addressed the letter dated 08.06.2012
to respondent No.4 and stated that bill of entry
was not required to be filed in the present case
as the vessels were old vessels and had already
been imported in India in the past and plied in
Indian waters earlier and it was also mentioned
in the letter that they were last converted to
coastal run in the port of Sikka on 21.02.2012
and were reverted to foreign going vessel status
on 30.04.2012.
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
5. Learned Senior Advocate Mr.Shah has further
submitted that Sections 29 to 43 of the Act deal
with the provisions relating to conveyance
carrying imported or exported goods and Sections
45 to 49 of the Act deal with imported goods, and
Section 2(22) of the Act covers the goods which
includes the vessels. He has submitted that the
Person-in-Charge of a Vessel entering India from
any place outside India shall have to follow the
provisions as mentioned under Section 29 of the
Act. It is submitted that while leaving the port,
the person-in-charge of the vessel shall have to
take permission from the respective customs
station for departure as per Section 42 of the
Act. It is submitted that the importer is
required to file Bill of Entry for imported goods
under Section 46 of the Act and on perusal of the
above provisions, it is revealed that even though
goods includes the vessel for the purpose of the
Act, there is a distinct treatment for entry and
exist of the imported goods and conveyance under
the provisions of the Act and therefore, the
vessels cannot be treated in manner alike of the
other imported goods.
6. Learned Senior Advocate Mr.Shah has further
submitted that respondent No. 4 in seeking to
impose Custom duty on the act of conversion of
the vessel Jag Aabha for coastal run, which
vessel was imported into India way back in 2009
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
is exercising the jurisdiction not vested with
such authority. In terms of Section(s) 17 and 46
of the Act, the power of assessment vested with
the 'proper officer' (i.e. respondent No.4) is a
power in respect of 'imported goods' to be
exercised at the stage of importation of goods
into India and as the vessel Jag Aabha, has
ceased to be 'imported goods' as defined under
Section 2(26) of the Act, having merged with the
landmass of goods of India, and in fact
constitute re-imported good, the respondent No.4
cannot now seek to levy / recover Customs duty on
the said vessel. It is submitted that the
notification No.12-2012-CUS comes into force
w.e.f. 17.03.2012 and supersedes earlier
notification No.21-2002-CUS except in respect of
things done or omitted to be done under
notification No.21-2002-CUS. It is submitted that
notification No.12-2012-CUS is not stated to have
any retrospective or retroactive application and
thus, must operate on a prospective basis as per
the settled law on this issue. He has submitted
that the undisputed factual position is that on
the date of the importation of the vessel Jag
Aabha into India, the same was exempted from
Customs duties vide Sr. No.352 of notification
No.21-2002-CUS dated 01.03.2002.
7. Thus, it is urged by learned Senior Advocate
Mr.Shah that the respondent No.4 has acted
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
illegally seeking levy of duty of customs of
vessels imported in 2009 by retrospectively
applying exemption notification No.12/2012 in
terms of Section 25 of the Act. He has submitted
that the respondent erred in demanding duty under
Sr. No.462 of the impugned notification read with
condition No.82 thereto, on the clearance of Jag
Aabha. It is submitted that duty is sought to be
levied on the event of conversion subsequent to
the import and in terms of the Act, duty is
leviable on the importation of goods, which
happened in 2009 and thus, not liable to duty now
in June, 2012. Further it is submitted that Sr.
No.462 would be applicable for those vessels
which have entered India first time after
17.03.2012 and not event of imports prior to that
date. He has submitted that it is undisputed fact
that vessel was imported earlier in India and,
therefore, Sr. No.462 of the impugned
notification would not be applicable in the
present case. Thus, it is urged that the writ
petition may be allowed in terms of prayer 25A.
8. At this stage, upon instructions, learned
Senior Advocate Mr.Shah has submitted that the
petitioner would not be pressing for prayer 25AA.
9. Opposing the present writ petition, and
submissions advanced by the learned Senior
Advocate, learned Senior Standing Counsel
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
Mr.Gupta has submitted that the legal precedent as
cited by the petitioner of various High Courts will
not come to the aid of the petitioner in view of
the judgements of the Apex Court in the case of
Union of India vs. Jalyan Udyog, 1993 (68) ELT 9
(SC) and in the case of Collector of Customs,
Calcutta vs. Salim Abbas Bhai, 1997 (94) ELT 466
(SC). While placing reliance on the averments made
in the affidavit-in-reply filed by the respondent
authority, it is submitted that the case of the
petitioner would be governed by the notification
dated 17.03.2012 and accordingly, the respondents
have precisely sought levy of duty from the
petitioner. It is contended that the duty as
demanded pursuant to the Notification dated
17.03.2012 is appropriate as the condition of
exemption in the instant case is that the same is
applicable to the vessels imported to India only
till the time it retains its status as a “foreign-
going” vessel but additional duty is applicable to
such vessels as and when they converted to
“coastal” status. It is urged that the vessels Jag
Aabha and Jag Prerna sought conversion of the
foreign-going vessels or coastal status after
issuance of the impugned notification and
additional duty is applicable to such vessels as
and when they get converted. Thus, it is submitted
that the notification is precisely invoked in the
case of the petitioner with retrospective effect
and the writ petition deserves to be rejected.
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
ANALYSIS
10. We have heard the learned advocates appearing
for the respective parties at length and also
perused the documents, as pointed out by them.
11. The facts, which are established from the
record and pleadings are as under:
12. Both the vessels Jag Aabha and Jag Prerna
belong to the petitioner and as mentioned
hereinabove, they were granted the general
licenses to undertake worldwide trade and coastal
trade in Indian waters. On 20.07.2009, the
vessels were imported to India. The competent
authority clarified the vessels for importation
and post such clarification by the Central Board
of Excise and Customs (CBEC) on 12.10.2012, the
petitioner filed representation with CBEC
requesting that the Indian flag ship owners be
permitted to file bill of entry at one single
customs house. Thereafter, the Notification dated
17.03.2012 was issued by the Ministry of Finance,
Department of Revenue superseding the
Notification dated 01.03.2002. The vessels sailed
outside the India and were sailing / plying in
international waters and after completion of an
overseas voyage, vessels returned to India and
entered India’s territorial waters and was sought
to be converted for a coastal run status, for
operation in India. It appears that at that point
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
of time, the respondent authorities refused to
permit the clearance of the vessels without the
petitioner filing an undertaking that they would
file bill of entry as per the Notification dated
17.03.2012 and pay applicable CVD. The petitioner
objected to the same by saying that the vessels
were old, which had already been imported to
India in the past i.e. in the year 2009 and also
plied in Indian waters earlier. It is also
submitted that the vessels Jag Aabha and Jag
Prerna were last converted to coastal run in the
port on 20.07.2009 and 12.02.2012 prior to the
issuance of the Notification dated 17.03.2012 and
reverted to foreign-going vessel status on
30.04.2012. These facts are not denied by the
respondents. Thus, the issue boils down to the
applicability of the impugned Notification, as
interpreted by the respondents with retrospective
effect or not.
13. At this stage, we may incorporate the
relevant part of the notification dated
17.03.2012. The same reads as under:
“G.S.R. (E).- In exercise of the powers conferred by
sub-section (1) of Section 25 of the Customs Act,
1962 (52 of 1962) and in supersession of the
notification of the Government of India in the
Ministry of Finance ( Department of Revenue), No.
st
21/2002-Customs, dated the 1 March, 2002 Published
in the Gazette of India, Extraordinary, Part II,
Section 3, Sub-section (i), vide number G.S.R. 118(E)
dated the 1st March, 2002, except as respects things
done or omitted to be done before such supersession,
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the Central Government, being satisfied that it is
necessary in the public interest so to do, hereby
exempts the goods of the description specified in
column (3) of the Table below or column (3) of the
said Table read with the relevant List appended
hereto, as the case may be, and falling within the
Chapter, heading, sub-heading or tariff item of the
First Schedule to the Customs Tariff Act, 1975 (51 of
1975) as are specified in the corresponding entry in
column (2) of the said Table, when imported into
India,-… … … “
14. A plain and simple reading of the
notification would manifest that the notification
contains expression “except as respects things
done or omitted to be done before such
supersession”. This exception is provided to the
applicability of the Notification dated
01.03.2002 and things which are done or omitted
to be done pursuant to the said Notification.
Thus, the intention of the Notification does not
in any manner, reveals that it applies
retrospectively.
15. We may now refer to the decision of the High
Court of Orissa in the case of the present
petitioner relating to the vessel namely Jag
Arnav. The Division Bench of the High Court of
Orissa, after distinguishing the judgement of the
Apex Court in the case of Jalyan Udyog (supra)
and considering the effect of the notification
dated 17.03.2012, has held thus:
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
“Discussion and Reasons
21. The above submissions have been considered. Since
the central plank of the submission of the Opposite
Parties to justify the insistence on payment of
customs duty on the vessel in question at the time of
its conversion from foreign going vessel to coastal
run vessel. Notwithstanding that it was imported
which was in fact imported way back on 13th April,
2003, no customs duty was payable thereon and in
support thereof reliance has been placed on the
Notification 16/2012-Cus dated 13th June, 2012, the
Court proposed to legally by examining that circular
in some due date. The subject matter of the said
circular issued by the CBEC "procedure followed for
import of Indian vessels and filing of import general
manifest, bill of entry-regarding".
22. The circular explains in detailed that the
context in which it is being issued since the
difficulties was brought to the notice of the CBEC by
the INSA stating that the customs field formations
are insisting on filing of Import General Manifest
(IGM) and BOE "even in respect of those vessels that
were imported in the past and which were exempt from
payment of import duty. The circular then proceeds to
examine the various categories of vessels imported
into India. These includes:
"(i) Foreign flag vessels, i.e. vessels that have
been registered outside India and which carry
imported/exported goods or passengers, during its
foreign run (voyage from a port outside India to an
Indian port, whether touching any Intermediate port
in India or not;
(ii) Vessel entering India for the first time on
arrival in the country, for registration as Indian
Flag vessel,
(iii) Vessels which are intended for conversion from
foreign run to coastal run/trade (voyage between two
or more Indian ports); and
(iv) Vessels which are brought into India for
breaking up."
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
23. Specific to the present context paragraph-3.4 of
the Circular notes in respect of vessels for
conversion to coastal run read as under:
"3.4 Vessels for conversion into coastal run: Any
vessel could be used for coastal run/trade after
obtaining requisite clearance from Director
General of Shipping and on fulfillment of certain
specified conditions under Section 407 of the
Merchant Shipping Act, 1958. In case of foreign
going vessel, exemption from Import duties,
Including CVD, have been extended vide Serial No.
462 of Notification No. 12/2012-Cus,
MANU/CUST/0068/2012 Dated 17-3-2012, subject to
prescribed conditions, which binds the importer
to file fresh Bill of Entry at the time of its
conversion for coastal run/trade and payment of
applicable duty on such conversion of vessel for
coastal run/trade. Similarly, excise duty is also
payable on vessels which are being used for
coastal trade vide serial No. 306 of Notification
No. 12/2012-Cus. MANU/CUST/0068/2012 Dated 17-3-
2012. Hence, If any Indian Flag vessel which is
used for time being as foreign going vessel is
converted for use in coastal trade or any vessel
which is to be used for coastal trade, there is a
need to file a Bill of Entry for payment of
applicable duty as CVD."
24. Clarifications, relevant to the case on hand,
have been issued in paragraphs-4, 5 and 6 as under:
"4. In view of the above, it is clarified that in
respect of foreign flag vessels, for Indian flag
vessels, there is no requirement of filing of IGM
and Bill of Entry, since its usage is as
conveyance. In respect of Indian flag vessels and
vessels for breaking up as explained in para 3.3
and 3.5 above, the importer has to file IGM and
Bill of Entry, under the provisions of the
Customs Act, 1962. As regards the vessel for
conversion into coastal run/trade as detailed in
para 3.4, since the changes in the duty structure
for levy of CVD on vessels which are being
converted for coastal trade was initially imposed
from 1-3-2011, and subsequently retrospective
exemption has been provided for the period 1-3-
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2011 to 16-3-2011 vide clause 129 of the Finance
Act, 2012, the requirement for filing IGM and
Bill of Entry may be insisted in all such cases
w.e.f. 17-3-2012, that is the date from which
levy of CVD has come into force.
5. It is also clarified that all vessels
including foreign going vessels for its entry
into/exit from the country during its journey as
foreign going vessel and the Indian flag
vessel/Indian Ship for subsequent use as foreign
going vessel would not require filing of IGM and
Bill of Entry as conveyance, since the same are
not imported goods to be cleared for home
consumption.
6. Accordingly, the field formations may
adjudicate the cases involving any violation
where the IGM or Bill of Entry in respect of
vessels were not filed at the time of import, on
its first arrival in India or on its conversion
into coastal trade and appropriate penal action
be taken against the offenders."
25. A careful reading of the above circular reveals
that it does not support the contention of Opposite
Parties that in the present case where the vessel
'Jag Arnav' has been imported into India way back on
30th April, 2003, the Opposite Parties can insist on
collection of CVD at the time of its conversion from
a foreign going vessel into a coastal run vessel.
26. This contention also overlooks the settled legal
position, which the circular in fact makes abundantly
clear, that Notification No. 21/2012 dated 17th
March, 2012 was not Intended to operate
retrospectively. In other words, it was not intended
to apply to a vessel already been imported into India
long before the date of said exemption notification.
27. The decisions of the Bombay High Court in Great
Offshore Limited v. Commissionen of Customs (Import)
and SEAMEC Ltd. v. Union of India (supra) also make
this position clear. Both the decisions hold that
where the vessels had been imported long before the
notification that was sought to be applied in those
cases, and particularly at a time when there was no
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requirement to file a BOE, the Opposite Parties could
not insist on levy of customs duty at a later stage.
28. Turning to the Entries 461 and 462 and the
corresponding Conditions 81 and 82, it requires to be
noted that Condition B1 applies when an imported ship
is subsequently broken up and sold. In such on the
date of import is by a deeming fiction postponed to
the date of breaking up of the ship. In any event, in
the present case Condition 81 does not apply since
here there was no question of the ship Jag Arnav
being broken up at any stage.
29. Interestingly it is not in dispute that the 'Jag
Arnav' has, after its import into India, undertaken
several journeys both to ports out outside India as
also those within India. It is only after the
impugned notification that permission for conversion
into a coastal run vessel was sought by the
Petitioner. However, that by itself would not attract
the liability to pay customs duty on the entire value
of the vessel since the import took place much
earlier on 30th April, 2003 at which point in time it
was fully exempted from payment of any customs duty.
30. Mr. Shah has rightly his contention that a
distinction has to be made between levy and customs
duty on the value of ship stores that is carried on
the vessel and are by themselves 'goods'. He points
out how Petitioner No. 1 has in fact paid customs
duty on the value of ship stores without delay.
31. To complete the factual narration, after the
interim order of this Court dated 11th January, 2013
a provisional BOE was filed by Petitioner No. 1 on
15th January, 2013 and it was provisionally assessed
on 10th February, 2013. Jag Arnav re-converted to
foreign status at Mundra on 1st February, 2013 and to
coastal run status at Paradeep on 10th February,
2013. Provisional BOE was filed on 15th February,
2013 and provisional assessment took place. On 9th
March, 2013 it reconverted to foreign status at
Mundra.
32. Mr. Shah points out how Jag Arnav was in foreign
status at the time of import and thereafter for
nearly ten years. It converted to coastal run status
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for the first time at Dhamra on 6th January, 2013. It
had called on Indian ports on various occasions in
2003, 2008 and 2009.
33. A similar list of dates have been filed for the
two other vessels, i.e., 'Jag Ratan' and Jag Rani'
both of which arrived at Indian port, i.e., Paradeep
for the first time on 13th November, 2007 and 26th
August, 2011 respectively. Both these vessels have
been converted several times from coastal run status
to foreign going status depending on the journeys
undertaken. On 2nd March, 2013, 'Jag Ratan' reverted
to foreign status at Dhamra and 'Jag Rani' on 7th
January, 2013.
34. It requires to be noted at this stage that
Petitioner No. 1 has filed writ petitions both in
High Courts of Gujarat and Madras for similar
reliefs. In the decision of the High Court of Andhra
Pradesh and Telengana Great Eastern Shipping Company
v. Deputy Commissioner (supra), one of the questions
that was addressed the next question is as to whether
the customs authorities are entitled to assess the
imported vessel to duty, on the premise that the bill
of entry is filed in the year 2018, and also collect
duties and tax prevalent in 2018 despite the fact
that the vessel was admittedly imported into the
Indian waters on 28th May, 2012 more particularly
when the customs duty applicable at that point of
time was 'nil'.
35. After discussing the applicable law and
particular the decisions in SEAMEC Limited (supra),
the conclusion reads as under:
"In our considered view, whether the bill of
entry has been presented before the date of entry
or after the date of entry, the bill of entry
shall be deemed to have been presented on the
date of actual entry inwards and the said date of
entry shall be reckoned as the relevant date for
application of the law prevalent as on that date.
To sum up, we are of the view that the law
prevalent as on the date of the import of the
vessel in the case on hand would only be
applicable and that merely because the bill of
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
entry was not filed at the inception in the year
2012 and the manual bill of entry was filed in
the year 2018, that is, about six years after the
actual import of goods, the duty and tax cannot
be levied based on the law prevalent on the date
of the filing of manual bill of entry more
particularly as the import of the vessel in May,
2012, is not in dispute and as the vessel ran
after getting necessary port clearances on number
of occasions is also not in dispute. As
admittedly the duties were 'nil' at the time of
import in May, 2012, and the integrated tax in
terms of Section 3(7) of Customs Tariff Act, 1975
was introduced w.e.f. from 01.07.2017, we hold
that the petitioner is entitled to the reliefs
claimed in the writ petition."
36. This Court respectfully concurs the above view
and holds that in the present case since vessel 'Jag
Arnav called in Indian port for the first time at
Paradeep on 30th April, 2003, and at that relevant
date it was exempt from payment of customs duty it
cannot be made amenable to such duty nine years later
by virtue of a condition in another exemption
notification of March 2012.
37. One of the contentions of the Opposite Parties is
that after the Notification dated 17th March 2012 was
issued, customs duty is leviable on every occasion
when the vessels in question entered India as a
'conveyance' carrying cargo. In relation to Indian
flagged vessels, as the three in question in this
case, at the time of their first entry into Indian
waters they are considered as Imported 'goods'.
Thereafter every time they re-renter these vessels
conduct their activity as 'conveyance' as defined
under Section 2(9) of the Act. Such conveyances are
not re-imported into India every time they enter
Indian waters since they were never 'exported from
India. Section 20 of the Act would, therefore, have
no applicability. Only their cargo would be amenable
to customs duty, if at all. This position has been
explained in Commissioner of Customs, Mumbai v. Aban
Loyd Chiles Offshore Ltd. MANU/SC/0105/2017: (2017) 3
SCC 211 as under:
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
"13. To appreciate the controversy, it is
necessary to understand certain concepts as
envisaged under the Act. 'Goods' for the purpose
of the Act Includes vessels, aircrafts and
vehicles as defined in sub-section (22) to
Section 2, yet the distinction has to be
recognized between a vessel or an aircraft as a
mere good and when the vessel or an aircraft
comes to India as a conveyance. carrying imported
goods. When a vessel or an aircraft is imported
into India as a good, customs duty is payable
thereon. However, when a vessel is used as a
conveyance of an imported good, the position
would be different.
38. It has already been noticed how Circular No.
16/2012: MANU/CUCR/0034/2012 dated 13th June, 2012
does not support the case of the Opposite Parties.
They have also relied on the decision of Jalyan Udyog
v. Union of India (supra). That decision is not
applicable to the present case as it seeks to
interpret Entry No. 461 read with Condition 81, which
is not relevant in the facts and circumstances of the
present case, On the other hand, the language of
Condition 82 makes it clear that it is meant to apply
to vessels imported after the date of the
notification and not prior thereto.
39. Lastly the submission of Mr. Shah that an
exemption of notification cannot create a levy
outside the charging Section finds full support from
the decision of the High Court of Gujarat dated 15th
July, 2015 in Special Civil Application No. 3142 of
2010 (Adani Power Limited v. Union of India). This
was affirmed by the Supreme Court of India by the
dismissal of SLP (Civil) No. 30868 of 2015 of Union
of India against the sald decision, on 28th November,
2015.
40. For the aforementioned reasons, this Court
concludes that in the present case exemption
notification dated 17th March, 2012 is only
prospective in its application and that in respect of
the import of the three vessels i.e. Jag Arnav', 'Jag
Ratan' and 'Jag Rani' which were imported into India
first on 30th April 2003, 13th November, 2007 and
26th August, 2011 respectively, Entry 462 read with
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
Condition No. 82 of the notification dated 17th
March, 2012 will not apply.
41. As a result, it is not necessary for this Court
to strike down the said entry or condition of the
notification. It is held that the Opposite Parties
would not be justified in insisting on payment of CVD
by Petitioner No. 1 for grant of conversion of the
vessels from foreign going to coastal run since the
vessels stand imported prior to the notification
dated 17th March, 2012.
42. In that view of the matter, the sum of Rs.
5,00,000/- (rupees lakh) deposited by Petitioner to
this Court together with the interest accrued thereon
will be released in favour of Petitioner No. 1 by the
Registry within four weeks.
43. The writ petition is allowed in the above terms.
But in the circumstances, with no order as to costs.”
16. Thus, after considering the decision of Apex
Court in case of Jaliyan Udyog (supra),it is held
that insistence of countervailing duty by the
customs for grant of conversion of the vessels from
foreign going to coastal run since the vessels stand
imported prior to the notification dated 17th March, 2012
is illegal. The said decision is subsequently
followed by the High Court of Judicature at
Madras in the case of vessels-Jag Rishi and Jag
Rahul belonging to the petitioner. The High Court
of Madras adopted the opinion expressed by the
High Court of Orissa and set aside the decision
of demand of duty pursuant to the notification.
17. Thus, the shelter sought by the respondents
below decision of the Apex Court in the case of
Jaliyan Udyog (supra) will not come to their
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C/SCA/8103/2012 JUDGMENT DATED: 24/06/2026
rescue in light of the specific wording of the
Notification as well as decision of the High
Court of Orissa and also High Court of Judicature
at Madras in case of the petitioner relating to
other vessels. We find no convincing reason to
defer or disagree with the view expressed by both
the High Courts. The ratio of the said decision
squarely applies to the facts and issue of the
present case.
18. The writ petition accordingly succeeds in
terms of prayer 25A. The respondents shall do the
needful as it is informed to us that pursuant to
the order dated 13.12.2012, the petitioner has
furnished the Bank Guarantee to the tune of
Rs.3,63,45,193/- before the Customs authorities.
The expiry date of the same appears to be in the
year 2027. Accordingly, the necessary order
discontinuing the bank guarantees shall be passed
within a period of 03 (three) months from the
date of receipt of order of this Court.
Sd/-
(A. S. SUPEHIA, J)
Sd/-
(VAIBHAVI D. NANAVATI,J)
NVMEWADA/S-1
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