2026:MHC:52W.P.Nos. 19298 of 2012 etc

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 05.01.2026

CORAM :

THE HONOURABLE DR.JUSTICE ANITA SUMANTH

and

THE HONOURABLE MR.JUSTICE MUMMINENI SUDHEER

KUMAR

W.P.Nos. 19298, 19299, 19300 & 19301 of 2012

and

M.P.Nos. 1,1,1,1 of 2012, 1 of 2014

The Great Eastern Shipping Company Ltd.,

a Company within the meaning of

Companies Act, 1956 and having its

registered office at Ocean House, 134/A,

Dr.Annie Besant Road, Worli,

Mumbai – 400 001

Rep. By its Company Secretary – Mr.Jayesh Trivedi

.. Petitioner

in all WPs

vs

1.Union of India,

Through Joint Secretary,

Ministry of Finance,

Department of Revenue, North Block,

New Delhi.

2.The Central Board of Excise and Customs,

North Block,

New Delhi – 110 001.

3.The Assistant Commissioner of Customs

(Group – 5A & 5B),

having his office at Customs House,

1/16

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W.P.Nos. 19298 of 2012 etc

No.60, Rajaji Salai,

Chennai – 600 001.

.. Respondents

in all WPs

Prayer in W.P.No. 19298 of 2012 : Writ Petition filed under Article 226 of

the Constitution of India praying to issue a writ of certiorarified

mandamus to call for the records of the impugned demand letter bearing

no.F.No:S Misc-60/2012-Gr.5A&5B dated 11

th

July 2012 issued by the 3

rd

respondent, and quash the same and forbear the respondents from

charging any customs duty on the vessel ‘Jag Rishi’.

Prayer in W.P.No. 19299 of 2012 : Writ Petition filed under Article 226 of

the Constitution of India praying to issue a writ of certiorarified

mandamus to call for the records of the impugned demand letter bearing

no.F.No:S Misc-55/2012-Gr.5A&5B dated 11

th

July 2012 issued by the 3

rd

respondent, and quash the same and forbear the respondents from

charging any customs duty on the vessel ‘Jag Rahul’.

Prayer in W.P.No. 19300 of 2012 : Writ Petition filed under Article 226 of

the Constitution of India praying to issue a writ of declaration to declare

that condition no.82 of S.No.462 of Notification no.12/2012 Cus. Dated

17.03.2012 issued by the 1est respondent, is illegal and unconstitutional

as being violative of section(s) 12,25 and 46 of the Customs Act, 1962

and Articles 14,19(1)(g),265 and 300A of the Constitution of India,

insofar as the petitioner is concerned.

Prayer in W.P.No. 19301 of 2012 : Writ Petition filed under Article 226 of

the Constitution of India praying to issue a writ of prohibition prohibiting

the respondent no.3 from demanding any customs duty on the vessels

‘Jag Rahul’ and ‘Jag Rishi’ which have been imported into India prior to

17.03.2012 i.e., the date of coming into force of Notification 12/2012-

Cus.

For Petitioner: Mr.Karthik Sundaram

(in all writ petitions)

For Respondents: Mr.S.Gurumoorthy

SPC

(in all writ petitions)

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COMMON ORDER

(Made by Dr. ANITA SUMANTH.,J)

Mr. Karthik, learned counsel, makes an endorsement not pressing

the relief sought in W.P.No. 19300 of 2012, recording which,

W.P.No.19300 of 2012 is dismissed as not pressed, leaving the question to

be decided in any other appropriate case.

2. Now coming to W.P.Nos. 19298 & 19299 of 2012, the relief

sought for is a certiorarified mandamus challenging communication dated

11.07.2012 in respect of two vessels i.e., ‘Jug Rahul’ and ‘Jug Rishi’ for

non-payment of countervailing duty (CVD) on conversion from foreign

to coastal run.

3.The impugned communications refer primarily, to Notification

No. 12/2012 where Serial No. 462 stipulates that goods under tariff

heading 8901 (foreign going vessels), are exempt from basic customs

duty (BCD) and CVD, subject to the condition that appropriate duty is

remitted upon conversion to coastal run.

4. ‘Jug Rahul’ has been imported in 2005. No Bill of Entry has

been filed as the law did not mandate the filing of Bill of Entry at that

relevant point in time. As far as ‘Jug Rishi’ is concerned, Bill of Entry has

been filed on 28.03.2011. Both imports are prior to date of Notification

dated 12/2012.

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5. The petitioner relies on a decision of the Orissa High Court in its

own case Great Eastern Shipping Company Ltd and Ors v Union of India

and Ors

1

. The challenge is identical in that case as well and relates to

three other vessels being ‘Jug Arnav’, ‘Jag Ratan’ and ‘Jag Rani’, that had

been imported on 30.04.2003, 13.11.2007 and 26.08.2011, respectively.

The Court proceeds on the basis that Notification No. 12/2012 would not

adversely impact those imports that had taken place prior to date of

Notification being 17.03.2012 as the applicability of the Notification is

prospective.

6. The admitted position in the present case is that, post date of

Notification there has been conversion from foreign run to coastal run.

However, one of the question that has been taken note of by the Orissa

High Court referring to Commissioner of Customs, Mumbai v Aban Loyd

Chiles Offshore Ltd

2

is that customs duty would be leviable only on the

import of conveyances at the first instance (i.e., at the time of first entry).

This event was in 2005 and 2011 in the case of the two vessels we are

concerned with. Post the aforesaid event, they ceased to be goods and

were only conveyances. The Supreme Court in Aban

3

has explained this

in the following terms:-

1

379 ELT 318(Ori) : W.P(C) No. 4 of 2013

2

(2017) 3 SCC 211

3

Foot Note supra 2

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“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.

7. Hence the critical event in order to attract liability under

Notification No.12/2012 would be the date of import alone and not their

subsequent run as a conveyance. In the present case, these critical dates

are in 2005 and 2011, even prior to date of Notification.

8. The decision of the Orissa High Court has attained finality and

the operative portion reads as follows:-

‘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”.

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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:

“(1) 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.”

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. 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

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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. 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 1-3-2011 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

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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. Commissioner 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 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 81 applies when a imported ship is

subsequently broken up and sold. In such event 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.

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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

30

th

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 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 26

th

August, 2011 respectively.

Both these vessels have been converted several times from

coastal run status to foreign going status depending on the

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journeys undertaken. On 2nd March, 2013, ‘Jag Ratan’

reverted to foreign status at Dhamra and ‘Jag Rani’ on 7

th

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 Commssioner (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 bereckoned 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

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,

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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 flaggedvessels, 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. (2017) 3 SCC 211 as under:

“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

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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

dated 13

th

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 said 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 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

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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 17

th

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.’

9. The above decision has been accepted by the Revenue and no

appeal has been filed and the ratio is hence applicable to the present

matter as well. We are hence of the considered view that the impugned

demands under communications dated 11.07.2012 are liable to be

quashed.

10. Mr.Gurumoorthy would attempt to point out that the impugned

communications are only advisory in nature, intending to put the

petitioner to notice of an impending show cause notice. We disagree, as in

paragraph 7 of the impugned communications, this is what the respondent

states:-

7. Hence you are requested to file Bill of Entry for

the payment of CVD for the period of licence to run

as Coastal vessel as given in the working sheet

attached herewith, within 14 days from the date of

receipt of this letter. The rate of exchange given in

the working sheet is for illustration only, as the

actual rate of exchange on the date of filing Bill of

Entry will be taken for the assessment.

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11. The very fact that there is a computation / working sheet

annexed with the impugned communication quantifying the demand and

calling for the remittance of the same within 14 days from date of receipt

of the letter, would make the impugned communication nothing short of a

demand and, they are quashed. In light of the above discussion, W.P.Nos.

19298 & 19299 of 2012 are allowed.

12. As a sequitur, W.P.No. 19301 of 2012 seeking a writ of

prohibition in demanding customs duty on the import of ‘Jag Rahul’ and

‘Jug Rishi’ is also allowed.

13. There shall be no order as to costs. Connected miscellaneous

petitions are closed.

[A.S.M, J.] [M.S.K, J.]

05.01.2026

Index:Yes

Neutral Citation:Yes

ssm

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To

1.The Joint Secretary,

Ministry of Finance,

Department of Revenue, North Block,

New Delhi.

2.The Central Board of Excise and Customs,

North Block,

New Delhi – 110 001.

3.The Assistant Commissioner of Customs

(Group – 5A & 5B),

having his office at Customs House,

No.60, Rajaji Salai,

Chennai – 600 001.

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DR. ANITA SUMANTH,J.

and

MUMMINENI SUDHEER KUMAR,J.

ssm

W.P.Nos. 19298 of 2012 etc

05.01.2026

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