Case Note & Summary
The case involved appeals from several oil rig operators against the Union of India regarding the imposition of customs duty on stores imported for use on oil rigs operating outside India's territorial waters. The appellants contended that their oil rigs qualified as 'foreign going vessels' under the Customs Act, 1962, which would exempt them from customs duty on imported stores. The Bombay High Court had previously ruled in the Pride Foramer case that oil rigs, while considered vessels, were not foreign going vessels due to their operations in designated areas of the continental shelf and exclusive economic zone, which are deemed part of India. The Supreme Court examined the definitions under the Customs Act and the Maritime Zones Act, concluding that the appellants' claims were not valid as the oil rigs did not meet the criteria for foreign going vessels. The court upheld the High Court's decision, affirming that the appellants were not entitled to the claimed exemptions from customs duty. The final decision was to dismiss the appeals, reinforcing the interpretation of the relevant statutes and notifications regarding customs duties applicable to oil rigs in designated maritime zones.
Headnote
A) Customs Law - Definition of Foreign Going Vessel - Oil rigs are not considered foreign going vessels under Section 2(21) of the Customs Act, 1962 - The court held that oil rigs operating in designated areas of the continental shelf and exclusive economic zone are not foreign going vessels as per the provisions of the Maritime Zones Act, 1976, and thus not entitled to customs duty exemptions - Held that the previous High Court ruling in Pride Foramer's case was correctly applied (Paras 13-13).
Issue of Consideration
Whether oil rigs engaged in operations in the exclusive economic zone/continental shelf of India are 'foreign going vessels' as defined by Section 2(21) of the Customs Act, 1962, and entitled to consume imported stores without payment of customs duty.
Final Decision
The Supreme Court dismissed the appeals, affirming that oil rigs in designated areas are not foreign going vessels under Section 2(21) of the Customs Act, 1962, and thus not entitled to customs duty exemptions.
Law Points
- Customs duty exemption
- foreign going vessels
- definition of stores
- Maritime Zones Act
- 1976
- Customs Act
- 1962
