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PETITIONER: CHOWGULE & CO. PRIVATE LIMITED ETC.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT19/02/1987

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) NATRAJAN, S. (J)

CITATION:  1987 AIR 1176            1987 SCR  (2) 351  1987 SCC  (1) 730        JT 1987 (1)   496  1987 SCALE  (1)404

ACT:     Customs Act, 1962--Sections 12, 15(c) and  46---’Vessel’ whether ’goods’--’Goods for home consumption’--Determination of  for purposes of levy of customs duty--’Vessels’  brought to  India  for  topping up operations  in  Mormugao  harbour Whether  ocean  going vessels-Necessary to present  Bill  of Entry. ’Vessel’--’Goods for home consumption ’--Meaning of.

HEADNOTE:     The appellants in Civil Appeal No. 179 of 1985 carry  on business of exporting iron ore to various countries.  Previ- ously  iron ore used to be brought to the harbour from  var- ious  mines by barges and unloaded in the harbour.  Thereaf- ter,  the iron ore could be loaded on board ocean going  ore carriers.  Alternately, they could be directly  unloaded  in stream into the ocean going ore carriers. Shallow draught of the harbour prevented large ocean going ore carrying vessels from entering the harbour or from having iron ore loaded  to full capacity on such vessels within the harbour and consid- erable  time was wasted in the loading process resulting  in substantial increase of the transporting cost. The appellant Company,  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  neces- sary permission from the Government of India for  purchasing a  second  hand  vessel for use as a topping  up  vessel  at Mormngao  harbour  for iron ore exports, acquired  a  second hand tanker, had it converted as a transhipper and  obtained ’ ’A certificate 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 mechanic plant to the permissi- ble  draught."  The appellant Company then  applied  to  the 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

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by  the Government of India "(a) for topping up purposes  in stream at any Indian port; (b) 352 for  trading on coast; and (c) for a period of 5 years  from March 5, 1970 to March 4, 1975". The appellant Company  also informed the Assistant Collector of Customs about the acqui- sition of the vessel ’Maratha Transhipper’ for "the  purpose of uptopping large size bulk carrier in stream" stating that they  would  be operating the ship within the  port  limits, that she would serve as a sea barge, that normally she would take cargo coming by barges with the help of her own  equip- ment and storing in her own hatches and thereafter she would go  along side bulk carriers and transfer the ore  from  her holds  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 herseft in stream in river barges; (b)  up- top another vessel by using the cargo from her own  hatches; 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 certificates  prescribed  by the Merchant Shipping Act and other Maritime Laws to  enable her to ply the oceans.     The  Assistant Collector of Customs asked the  appellant Company  to  file a Bill of Entry for stores  on  board  the vessel and for dearance 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 function of the vessel ’S.S. Maratha Transhipper’ is in  the nature of sea barge operating within the .port limits.  Such operations  are  reserved to the yessics imported  for  home consumption."  The Assistant Collector of Customs  issued  a mice to the appellant Company to show cause why the Bill  of Entry was not filed. After the reply to the notice was  sent and  a  personal  hearing was granted to  the  Company,  the Assistant  Collector made an order requiring the company  to file  a Bill of Entry for home consumption. This  order  was confirmed  by  the Appellate Collector. The  orders  of  the Assistant  Collector and the Appellate Collector were  ques- tioned in a writ petition. A Single Judge allowed the  peti- tion  but on appeal a Division Bench set aside the order  of the  Single Judge and dismissed the petition holding that  a vessel was ’goods’ within the meaning of s.46 of the Customs Act.     The  vessel in C.A. No. 4427 of 1985 was an ocean  going merchant  vessel  engaged in foreign and  coastal  trade  in India and various foreign countries. The appellant  acquired the vessel from the previous owner and obtained the  permis- sion  of the Government to have it converted as a  Tranship- per. After the vessel arrived at Mormugao Port, the  Customs Authorities  demanded that a Bill of Entry should be  filed. Thereafter the 353 same story followed as in the other case.     In  the appeal to this Court on behalf of the  appellant it  was  contended: (1) that the scheme of the  Customs  Act show  that  a vessel was not ’goods’ within the  meaning  of s.46(1)  of the Act and therefore, it was not  necessary  to file  a Bill of Entry; (2) that it was also the case of  the Government  of  India  that an ocean going  vessel  was  not required  to  file a Bill of Entry and that the  vessels  in question were ocean going vessels notwithstanding that their main  purpose  was topping up bulk carriers;  (3)  that  the Division Bench was wrong in refusing to go into the question

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whether  or  not the vessels were ocean going  vessels  when that was the very basis of the orders of the Customs Author- ities  as well as the judgment of the Single Judge, and  (4) that notwithstanding the definition, the scheme of  Chapters VI  and VII of the Customs Act and the context in which  the expression  ’goods’ is used in s.46 of the Act  require  the expression  to be interpreted for the purpose of s.46(1)  as excluding the vessel, aircrafts or vehicles.     On behalf of the respondent Union, it was contended that the definition of the word ’goods’ in the Customs Act  unam- biguously  included a vessel, and that in any case the  ves- sels  in question in both the cases were  Transhippers  used for  topping up operations in Indian territorial waters  and could not claim to be classified as ocean going vessels. Dismissing the appeals,     HELD: 1. Section 46(1) of the Customs Act, 1962  require the importer of goods for home consumption or warehousing to present  to the appropriate officer a Bill of Entry  in  the prescribed  manner. The question is whether the  vessels  in the  instant  cases are goods brought into  India  for  home consumption  and  whether a transhipper is  an  ocean  going vessel?  By  definition  a vessel, aircraft  or  vehicle  is included among goods vide s.2(22). [364E-G]     2. If a vessel, aircraft and vehicle are required to  be excluded  from  the  meaning of the  expression  ’goods’  in s.46(1),  then  what other purpose was to be served  by  the inclusive  definition  of  the  expression  which  expressly brought  within its shadow ’vessel, aircraft  and  vehicle’. There  is no provision in the Act into which  the  inclusive definition could be read. The Court cannot attribute  redun- dance  to  the  legislature particularly in the  case  of  a definition  in a taxing statute. The Court must  proceed  on the  basis  that such a definition is  designed  to  achieve results. [364H; 365A-B] 354     3.  Under s.12 of the Customs Act what are dutiable  are goods imported into or exported from India and if goods  are defined to include vessels, aircrafts and vehicles, it  must be taken that the object of the inclusive definition was  to bring  within  the net of taxation  vessels,  aircrafts  and vehicles  which are imported into India. Section 46(1) is  a prelude  to the levy of duty or a rust step in  that  direc- tion.  It  must, therefore, follow us a  necessary  sequitur that  vessels,  aircrafts and vehicles are ’goods’  for  the purpose  of  s.46(1). Any other interpretation may  lead  to most anomalous results. [365B-C]     4.  Under  s.15 of the Act the rate of duty  and  tariff valuation in the case of goods entered for home  consumption under s.46 shall be as on the date when the Bill of Entry is presented,  in  the case of goods cleared from  a  warehouse under  s.68 as on the date on which the goods  are  actually removed  from  the warehouse and in the case  of  any  other goods as on the date of payment of duty. [365D-E]     5.  Goods which are entered for home  consumption  under s.46  and  goods which are warehoused  are  naturally  goods which  are openly imported into India  without  concealment. The  expression ’other goods’ mentioned in s.15(c) is  obvi- ously  meant  to cover other imported goods  such  us  goods imported  clandestinely and goods which have  otherwise  es- caped duty. [365E]     6.  It  may be that in s.46(2) and  elsewhere  the  word ’goods’  is  used  in such a way as not to  include  and  as contradistinguished from the conveyances in which the  goods are  carried, depending upon the context. But that does  not mean  that despite the definition, the word is never  to  be

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understood  as defined and that it should always  be  inter- preted  as never to include vessels, aircrafts and  vehicles even  when there is nothing in the context  justifying  from exclusion. Therefore, there is no justification for  holding that  a vessel is not ’goods’ for the purposes  of  s.46(1). [366B-D]     7.  In both the instant cases, undoubtedly  the  vessels are  not  only capable of being used but are used  as  cargo ships  to  carry cargo from one Indian port  to  another  or sometimes  to  foreign ports, necessarily going out  on  the high  seas. They are structurally and technically  competent to go on the high seas and they have been certified to be so competent by appropriate maritime authorities. When  because of inclement monsoon weather topping up operations cannot be done the vessels do go out into the open sea sometimes  from one  Indian  port to another and at other times  to  foreign ports. Even in the come of topping up operations during  the fair season, the transhippers go into the open sea to  reach the bulk 355 carriers.  But  these operations do not make  these  vessels ocean going vessels when their primary purpose is to conduct topping up operations in Indian territorial waters. [366F-H; 367A-B]     8. It is clear from the material placed before the Court that both the vessels, were originally ocean going  vessels, that they were converted as transhippers for the purpose  of topping  up iron ore at Mormugao harbour and that they  tra- versed  the  open sea to reach Mormugao. At  the  time  they entered the territorial waters at Mormugao it was distinctly understood and intended that the vessels were to be primari- ly  used  for topping up operations at  Mormugao.  If  ocean journeys  were to be undertaken either they were  incidental to the primary purpose of topping up bulk carriers at Mormu- gao  or  they were occasionally undertaken when  topping  up operations  were not possible during the  inclement  monsoon season. [367D-F]     9. For the purpose of levy of Customs Duty, in order  to determine  whether  any imported goods are ’goods  for  home consumption’ it has to he found out what the primary intend- ed use of the goods was when the goods are brought to Indian territorial waters. If the goods are intended to be primari- ly  used  in  India they are "goods  for  home  consumption" notwithstanding  that they may also be used for the same  or other  purposes  outside India. The vessels,  in  these  two cases  were brought to India to be used primarily  as  tran- shippers at Mormugao, though used incidentally or  occasion- ally  to go into the open sea. They are,  therefore,  "goods for  home consumption" and not ocean going vessels  for  the purpose of Customs Act. After their conversion they were  no longer  ocean going vessels, in the full sense of  the  term that is in the sense that their predominant purpose was  use as ships traversing open seas. It was, therefore,  necessary to  present Bills of Entry in respect of both  the  vessels. [367G-H; 368A-C]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 179 of 1985.     From  the  Judgment and Order dated 13.12. 1984  of  the Bombay High Court in Appeal No. 273 of 1979. WITH Civil Appeal No. 4427 of 1985.

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From the Judgment and Order dated 19.4.1985 of the Bombay 356 High  Court in Special Civil Appln. (Writ Petition) No.  186 of 1982.     A.  Setalvad, P.H. Parekh, M. Korde and Manohar for  the Appellants in C.A. No. 179 of 1985.     Soli J. Sorabjee, A. Vachher, S.K. Mehta, Bomi M. Usgao- car,  M.K. Dua and Uday U. Lalit for the Appellants in  C.A. No. 4427 of 1985.     M.S.  Rao, A.S. Rao, C.V. Subba Rao and P.  Parmeshwaran for the Respondents. The Judgment of the Court was delivered by     CHINNAPPA  REDDY, J. The principal questions  raised  in the two appeals are the same and we are, therefore,  dispos- ing  of  both the appeals by a common judgment.  There  are, however, some points of difference which we shall mention in the course of the narration of facts.     In Civil Appeal No. 179 of 1985, Chowgule & Co.  Private Limited  are the appellants. They carry on the  business  of exporting  iron  ore  to various countries  from  India.  It appears  that previously iron ore used to be brought to  the Mormugao harbour from various mines in the territory of  Goa by  barges and unloaded in the harbour. Thereafter, the  ore would  be loaded on board ocean going ore  carriers.  Alter- nately,  they would be directly unloaded in stream into  the ocean going ore carriers. On account of the shallow  draught of  the Mormugao harbour which prevented large  ocean  going ore  carrying  vessels  from entering the  harbour  or  from having  iron  ore loaded to full capacity  on  such  vessels within  the  harbour, considerable time was  wasted  in  the loading  process  resulting in substantial increase  of  the cost  of transporting iron ore from Mormugao. Therefore,  in about  1967,  the appellant company conceived  the  idea  of acquiring  a  ’transhipper’ into which barges  could  unload iron  ore and from which large quantities of iron ore  could be  loaded  into large vessels in open  anchorages.  Such  a transhipper  would have to be specially fitted with  special and adequate equipment to carry out those tasks. The  opera- tion  of  loading a vessel in open anchorage by the  use  of transhippers is described as ’topping up’. On July 26, 1967, the  appellant Company applied to the Government  of  India, Ministry of Transport and Shipping, for necessary permission for "purchasing a second hand vessel of about 15000 DWT  for use as a topping up vessel at Mormugao harbour for iron  ore exports."  By their letter dated January 16, 1968, the  Gov- ernment of India granted their permission subject to certain con- 357 ditions  regarding  foreign  exchange  etc.  Thereafter  the appellant company acquired a second hand tanker called  "The Tropical  Grace" and had it converted at the Yokohoma  Ship- yard in Japan as a transhipper. "A certificate of Condition" in respect of the vessel was given by BUREAU VERITAS.  Among the main characteristics of the vessel, it was mentioned  in the  certificate,  "The Vessel originally a T 2  Tanker  was converted  into an ore loading barge at Yokohoma by  Nippon, KK,  Asano Dockyard from April to September 1969  under  the supervision  of  our society." It was further  certified  as follows:               "The  vessel will be entered into  the  Marine               Register  Book  of  BUREAU  VERITAS  with  the               following  class and notation mark: 13  3  Ore               Carrier,  Small Coasting Trade  starting  from               September  1969, for a period of  four  years.               The  vessel will be mainly employed as an  ore

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             loading  barge in the Harbour of Goa  (India),               with  the possibility to extend her  exploita-               tion  in  certain periods of year, as  a  bulk               carrier for small coasting trade.                         As a result of the aforesaid surveys               for   conversion  and  reclassification,   the               undersigned believes that S/S "TROPICAL GRACE"               is at present time in a position to  undertake               the  self-propelled  voyage from  YOKOHOMA  to               GOA." The  vessel arrived in the harbour of Mormugao on  or  about October 15, 1969. The Deputy Conservator, Mormugao Goa  Port Trust,  Mormugao harbour was informed on the same day  about the  arrival of the vessel and it was stated in the  letter, "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 mechanic plant to the permissible draught." On October  20,  1969, the petitioner company  applied  to  the Government of India for the issue of ’General Licence’ under s.406 of the Merchant Shipping Act, 1958. It was stated that the  general licence was sought to ply the vessel ’for  top- ping purpose in stream at Mormugao harbour’. The name of the ship was also changed to ’Maratha Transhipper’. Licence  was granted by the Government of India for use of the vessel for "topping  up purposes in stream at Mormugao, Kandla,  Bombay and Madras for a period of five years". It appears that this licence  was  later amended and the purposes for  which  the licence  was  granted  was treated as "(a)  for  topping  up purposes  in stream at any Indian Port; (b) for  trading  on coast; and (c) for a period of five years from March 5, 1970 to March 4, 1975." On 358 November  29,  1969,  the petitioner  company  informed  the Assistant  Collector  of  Customs,  Custom  House,  Mormugao harbour  about the acquisition of the vessel  Maratha  Tran- shipper  (earlier  Tropical Grace) for "the purpose  of  up- topping  large size bulk carrier in stream". It  was  stated that they would be operating the ship within the port limits and that she would serve as a sea barge. It was also  stated that normally she would take cargo coming by barges with the help of her own equipment and storing in her own hatches  to the  extent  of  15000 tonnes and thereafter  she  would  go alongside bulk carriers and transfer the ore from her  holds into the bulk carriers. This letter was followed by  another letter  dated November 29, 1969 in which-it was stated  that S.S.  Maratha  Transhipper was registered as a  "home  trade vessel"  and  that it was capable of three types  of  opera- tions:- (a) load herself in stream in river barges       (b) up top another vessel by using the cargo from  her own  hatches; (c) up-top another vessel by using  the  cargo from barges which go alongside Maratha Transhipper. We may also add here that ’The Maratha Transhipper’ possess- es all the certificates prescribed by the Merchant  Shipping Act and other Maritime Laws to enable her to ply the oceans.     On  December 31, 1969, the Assistant Collector  of  Cus- toms, Mormugao asked the appellant company to file a Bill of Entry for stores on board the vessel, ’Maratha Transhipper’. This was followed on February 6, 1970 by another letter from the Assistant Collector asking the appellant company to file a  Bill of Entry for clearance of the vessel ’Maratha  Tran- shipper’  for  home consumption immediately.  The  appellant company  by their letter dated February 19,  1970  requested the Assistant Collector to enlighten them as to the relevant provisions of the law under which they were required to fill

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in  the  Bill of Entry in respect of the vessel  which  they said  the  Customs Department was aware was an  ocean  going vessel. The Assistant Collector replieding, "The function of the vessel s.s. ’Maratha Transhipper’ is in the nature of  a sea barge operating within the port limits. Such  operations are reserved to the vessels imported for home  consumption." The company was requested to file the Bill of Entry for home consumption  immediately. Thereafter there was  some  corre- spondence between the company and the Customs. On April  23, 1970, the Assistant Collector of Customs issued a notice  to the appellant company asking them to show cause why the Bill of Entry was not filed in respect of the vessel 359 S.S. ’Maratha Transhipper’ which was imported by the company on October 15, 1969 for the purpose of carrying out  topping operations within the port limits. The company sent a  reply to  the notice. A personal hearing was also granted  to  the company. Thereafter on May 22, 1970, the Assistant Collector made an order requiring the company to file a Bill of  Entry for  home consumption in respect of the vessel ’The  Maratha Transhipper’.  The  order  of the  Assistant  Collector  was confirmed  by the Appellate Collector on July 23, 1970.  The Orders of the Assistant Collector and the Appellate  Collec- tor  were  questioned in a writ petition filed in  the  High Court  of Bombay. A learned single judge of the  High  Court allowed the writ petition but on an appeal under the  Latter Patent  a  Division Bench of the High Court holding  that  a vessel  was goods within the meaning of s.46 of the  Customs Act, allowed the appeal and dismissed the writ petition. The company  having obtained special leave of this  court  under Art. 136 of the Constitution, the appeal is now before us.     The facts in Civil Appeal No. 4427 of 1985 are some what different. The vessel in question in this appeal, "Priyamva- da" was originally called  ’Jagatswamini’. Jagatswamini  was an ocean going merchant vessel engaged in foreign and coast- al trade in India, the United Kingdom, the continent, Japan, North America, South America and Australia. V.S. Dempo & Co. Private  Limited, the appellant in Civil Appeal No. 4427  of 1985 acquired the vessel from its previous owner M/s.  Dempo Streamship  Limited.  The  appellant  company  obtained  the permission  of  the  Government to have it  converted  as  a transhipper. The conversion was effected by M/s. A.G.  Weser at  a West German Shipyard. The ship was fitted  with  added holds  on  both sides, cranes, conveyors  and  ship  loading equipments designed for transfer operations. The vessel  was surveyed by Germanischer Lloyd and German Maritime. Interna- tional tonnage certificate, Suez Canal Tonnage  certificate, cargo ship safety certificate, cargo ship safety.  equipment certificate, international load lines certificate and  clas- sification  certificate were all issued. The vessel  arrived at Mormugao Port on September 26, 1982. The Customs Authori- ties demanded that a Bill of Entry should be filed. Thereaf- ter the.same story followed as in the other case.     The main submissions of Shri Atul Setalvad, the  learned counsel  for the appellant in Civil Appeal No. 179 of  1985, whose  arguments  were supplemented by Shri  Soli  Sorabjee, learned  counsel for the appellant in Civil Appeal No.  4427 of 1985, were that the scheme of the Customs Act show that a vessel was not ’goods’ within the meaning of 360 s.46(1) of the Customs Act and therefore, it was not  neces- sary  to file a Bill of Entry, that it was also the case  of the  Government of India that an ocean going vessel was  not required  to  file a Bill of Entry and that  the  vessel  in question was an ocean going vessel notwithstanding that  its

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main  purpose was topping up bulk carriers of Iron  ore.  It was submitted that the Division Bench of the High Court  was wrong in refusing to go into the question whether or not the vessel  was  an ocean going vessel when that  was  the  very basis  of the orders of the Customs Authorities as  well  as the judgment of the learned single judge. On the other hand, it  was submitted by Shri S.Madhusudan Rao, learned  counsel for  the  Union  of India that the definition  of  the  word ’goods’ in the Customs Act unambiguously included a  vessel, leaving no scope for any argument and that, in any case  the vessels  in  question  in both the  cases  were  principally transhippers used for topping up operations in Indian terri- torial waters and could not claim to be classified as  ocean going vessels.     We  may  now  refer to the relevant  provisions  of  the Customs  Act. Section 2(22) of the Customs Act defines  that unless    the    context   otherwise    requires,    "goods" includes--"(a) vessels, air-crafts and vehicles; (b) stores; (c)  baggage; (d) currency and negotiable  instruments;  and (e) any other kind of movable property". "Import" is defined as meaning "bringing into India from a place outside India". "India"  is defined as including "the territorial waters  of India".  "Imported  goods" are defined to  mean  "any  goods brought  into India from a place outside India but  not  in- cluding goods which have been cleared for home consumption". "Importer" is defined, "in relation to any goods at any time between their importation and the time when they are cleared for home consumption" as "including the owner or any  person holding  himself  out to be the importer".  "Conveyance"  is defined  to include" a vessel, an aircraft and  a  vehicle". "Bill of Entry" is defined to mean a "Bill of Entry referred to in s.46"’. A "Bill of Export" is defined to mean a  "Bill of  Export  referred  to in s.50." An  "Import  Manifest  or Import  Report" is defined to mean "the manifest  or  report required  to be delivered under s.30". "Stores" are  defined to mean "goods for use in a vessel or aircraft and  includes fuel and spare parts and other articles of equipment whether or not for immediate fitting."     Section 12 provides for the levy of duties of Customs on goods  imported or exported from India. Section 15  provides that  the  rates of duty and tariff valuation shall  be  the rate and valuation in force,-- 361 "(a) in the case of goods entered for home consumption under section 46, on the date on which a bill of entry in  respect of such goods is presented under that section;               (b) in the case of goods cleared from a  ware-               house  under section 68, on the date on  which               the goods are actually removed from the  ware-               house;               (c)  in  the case of any other goods,  on  the               date of payment of duty."     Chapter VI of the Customs Act is concerned with  "provi- sions  relating to conveyances carrying imported  or  export goods", Chapter VII deals with "clearance of imported  goods and export goods", Chapter VIII deals with "goods in  trans- it" and Chapter IX deals with "ware-housing". Section 29  to 43 occur in Chapter VI and sections 44 to 51 occur in  Chap- ter VII. Sections 45 to 49 are dealt with under the  heading ’clearance of imported goods’ while sections 50 to 51  occur under the heading of ’clearance of export goods’. Section 29 requires  the  person-in-charge of a vessel or  an  aircraft entering India from any place outside India not to cause  or permit  the vessel or aircraft to call or land (a)  for  the first time after arrival in India; or (b) at any time  while

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carrying  passengers  or  cargo brought in  that  vessel  or aircraft,  at any place other that a customs port or a  cus- toms airport, as the case may be. Section 30 imposes a  duty on  a person-in-charge of the conveyance  carrying  imported goods  to deliver to the proper officer, within twenty  four hours  after  arrival, an import manifest in the case  of  a vessel  or  aircraft or an import report, in the case  of  a vehicle,  in the prescribed form. Section 31  prohibits  the master  of  a vessel from permitting the  unloading  of  any imported  goods until an order has been given by the  proper officer  granting ’entry inwards’ to such vessel. An  ’entry inwards’  order is not to be given until an import  manifest has been delivered or unless the proper officer is satisfied that  there  was  sufficient cause for  not  delivering  it. Section 39 prohibits the master of a vessel from  permitting the  loading of any export goods other than the baggage  and mail  bags,  until  an order has been given  by  the  proper officer granting ’entry-outwards’ to such vessel. Section 41 prescribes  that an export manifest in the case of a  vessel or an aircraft and an export report in the case of a vehicle should  be  filed by the person-in-charge  of  a  conveyance before  the departure of the conveyance from a customs  sta- tion.  Section  42 prohibits the departure of  a  conveyance which  has  brought  any imported goods or  has  loaded  any export  goods to depart from that customs station without  a written 362 order  of the proper officer. Section 41 provides  that  the provisions  of sections 30, 40 and 42 shall not apply  to  a vehicle which carries no goods other than the luggage of its occupants. Chapter VII, as we said, deals with clearance  of imported goods and export goods. We are primarily  concerned with s.46 and we consider it necessary to extract the  whole of the section. It is as follows:-               "46(1). The importer of any goods, other  than               goods  intended for transit  or  transhipment,               shall make entry thereof by presenting to  the               proper  officer a bill of entry for home  con-               sumption  or  warehousing  in  the  prescribed               form:                        Provided  that if the importer  makes               and  subscribes  to a declaration  before  the               proper  officer,  to  the effect  that  he  is               unable for want of full information to furnish               all  the  particulars of  the  goods  required               under  this  sub-section, the  proper  officer               may,  pending the production of such  informa-               tion, permit him, previous to the entry there-               of (a) to examine the goods in the presence of               an  officer of customs, or (b) to deposit  the               goods  in a public warehouse  appointed  under               s.57 without warehousing the same.                        (2)  Save as otherwise  permitted  by               the  proper  officers, a bill of  entry  shall               include all the goods mentioned in the bill of               lading  or other receipt given by the  carrier               to the consignor.                        (3)  A bill of entry  under  sub-sec-               tion(1) may be presented at any time after the               delivery  of  the import  manifest  or  import               report as the case may be:                        Provided  that the Collector of  Cus-               toms may in any special circumstances permit a               bill  of  entry  to be  presented  before  the               delivery of such report:

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                      Provided further that a bill of entry               may  be presented even before the delivery  of               such manifest if the vessel by which the goods               have  been shipped for importation into  India               is  expected to arrive within a week from  the               date of such presentation.                        (4)  The importer while presenting  a               bill  of entry shall at the foot thereof  make               and subscribe to a declaration as to               363               the  truth  of the contents of  such  bill  of               entry  and shall, in support of such  declara-               tion,  produce to the proper officer  the  in-               voice, if any, relating to the imported goods.                        (5)  If the proper officer is  satis-               fied  that  the interests of revenue  are  not               prejudicially  affected and that there was  no               fradulent  intention, he may permit  substitu-               tion  of a bill of entry for home  consumption               for  a bill of entry for warehousing or  vice-               versa." Section  47 deals with clearance of goods for home  consump- tion and section 49 with storage of imported goods in  ware- houses  pending clearance. Section 50 requires the  exporter of  any goods to make an entry thereof by presenting to  the proper  office, a Shipping bill in the case of goods  to  be exported in a vessel or aircraft and a bill of export in the case of goods to be exported by land.     Section  53 makes provision for permitting goods  to  be transmitted  without payment of duty if they are  ’mentioned in the import manifest as for transmit in the same vessel or aircraft.’  Section 54 provides and prescribe the  procedure for  transhipment of goods without payment of duty.  Chapter IX  deals with ’Warehousing’. Section 57 provides for  ware- housing  of dutiable goods without payment of duty.  Section 68  provides  for  clearance of warehoused  goods  for  home consumption  on  payment of duty. Section  69  provides  for clearance  of warehoused goods for exportation without  pay- ment of import duty if certain conditions are fulfilled.     The  only  other  important provision  requiring  to  be noticed by us is Item No. 76(1) of the First Schedule to the Indian Tariff Act which provides for the levy of 40 per cent ad valorem standard rate of duty on "ships and other vessels for  inland  and  harbour  navigation,  including  steamers, launches, boats and barges imported entire or in  sections." Along  with this entry has to be read the exemption  granted by G.S.R. No. 930 which is in the following terms:               "In exercise of the powers conferred by sec.23               of  the Sea Customs Act, 1878, as in force  in               India  and as applied to the State  of  Pondi-               cherry, the Central Government hereby  exempts               ocean going vessles imported into India or the               State  of Pondichery, other than  vessels  im-               ported to be broken up from, the whole of  the               duty  of  customs leviable  thereon,  provided               that any such vessel if subsequently bro-               364               ken up shall be chargeable with the duty which               would  be payable on her if she were  imported               to be broken up."     In regard to the levy of customs duty the scheme of  the Act appears to be as follows:- Goods which are imported into India,  that is, goods which are brought into India  from  a place  outside  India,  are, on entry  into  India,  broadly classified into (i) goods entered for home consumption under

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sec.46(1)(ii)  goods  entered for  ware-housing  also  under sec.46(1)(ii);  (iii) goods in transit, and (iv)  goods  for transhipment. In the case of goods in transit and goods  for transhipment  duty  is not required to be  paid  subject  to fulfilling  the conditions prescribed by secs.53 54, 55  and 56. In the case of these goods there is no need to present a Bill  of  Entry. Bill of Entry is necessary and  has  to  be presented  in  the  case of goods for  home  consumption  or warehousing: Goods entered for home consumption are required to  be cleared on payment of duty. Warehoused goods  may  be cleared  either for home consumption or exportation on  pay- ment of import duty or export duty as the case may be. Goods entered for home consumption are to be subjected to duty  at a  rate and tariff valuation as on the date of  presentation of  a  Bill of Entry under sec.46 and goods cleared  from  a warehouse  are to be subjected to duty at a rate and  tariff valuation  as on the date of actual removal from  the  ware- house.  Other  goods,  presumably goods  not  disclosed  but discovered  to be imported or which have  otherwise  escaped duty,  are  to  be subjected to duty at a  rate  and  tariff valuation as on the date of payment of duty.     Sec.46(1)  which we have extracted earlier requires  the importer of any goods for home consumption or warehousing to present  to the proper officer a bill of entry in  the  pre- scribed form. The question, which arises for  consideration, therefore, is whether the vessels in the two cases before us are goods brought into India for home consumption? Mixed  up with this question is the question whether a transhipper  is an  ocean going vessel? We will first consider the  question whether a vessel is goods so as to attract sec.46(1) of  the Customs Act. By definition a vessel, aircraft or vehicle  is included among goods, vide sec.2(22). But, according to Shri Setalvad,  notwithstanding  the definition,  the  scheme  of Chapters  VI and VII of the Customs Act and the  context  in which  the expression ’goods’ is used in sec.46 of  the  Act require the expression to be interpreted for the purpose  of sec.46(1)  as  excluding a vessel, aircraft or  vehicle.  In answer  to a direct question by us, Shri Setalvad  confessed that  if a vessel, aircraft and vehicle are required  to  be excluded  from  the  meaning of the  expression  ’goods’  in sec.46(1)  of the Act, he was unable to suggest  what  other purpose was 365 to  be served by the inclusive definition of the  expression which expressly brought within its shadow ’vessel,  aircraft and vehicle’. He frankly stated that he was unable to  point out any provision in the Act into which the inclusive  defi- nition could be read. We cannot attribute redundance to  the legislature  particularly in the case of a definition  in  a taxing  statute.  We must proceed on the basis that  such  a definition is designed to achieve a result. Under sec. 12 of the Customs Act what are dutiable are goods imported into or exported  from  India and if goods are  defined  to  include vessels,  aircrafts and vehicles, we must take it  that  the object  of the inclusive definition was to bring within  the net  of taxation vessels, aircrafts and vehicles  which  are imported  into  India. It is’ undisputed and  indeed  it  is indisputable that sec.46(1) is a prelude to the levy of duty or  a  first  step in that direction.  It  must,  therefore, follow  as a necessary sequitur that vessels, aircrafts  and vehicles  are goods for the purpose of sec.46(1). Any  other interpretation  may  lead to most anomalous  results.  Under sec.  15  of the Customs Act, the rate of  duty  and  tariff valuation in the case of goods entered for home  consumption under sec.46 shall be as on the date when the bill of  entry

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is presented, in the case of goods cleared from a  warehouse under sec.68 as on the date on which the goods are  actually removed  from  the warehouse and in the case  of  any  other goods  as  on the date of payment of duty. Goods  which  are entered  for home consumption under sec.46 and  goods  which are warehoused are naturally goods which are openly imported into India without concealment. The expression ’other goods’ mentioned  in sec. 15(c) is obviously meant to  cover  other imported  goods  such as goods  imported  clandestinely  and goods which have otherwise escaped duty.     Now, if a motorcar is brought by road into India from  a place outside India for the purpose of being used in  India, what  is  to be done with it and what is the point  of  time with reference to which it is to be subjected to the levy of customs  duty?  Surely, it is not meant to be  subjected  to duty  as on the date of payment of duty as provided by  sec. 15(1)(c), ranking with goods not disclosed but discovered to be imported. It would be unreasonable to subject the car  to the  levy of duty as on the date of payment of duty  instead of  on the date prescribed by sec.15(1)(a) of the Act,  that is,  the  date on which a bill of entry is  presented  under sec.46  as in the case of all other goods entered  for  home consumption. Shri Setalvad’s submission was based on what he described  as the scheme of Chapters VI and VII of the  Act. The circumstance that in the several provisions contained in Chapter  VI, the reference to ’goods’ is to goods which  are carried and not the carriers themselves, is not very materi- al since the chapter itself deals 366 with  ’conveyances carrying imported or exported goods’  and not  to  goods which are themselves  conveyances,  that  is, which  are either vessels, aircrafts or vehicles.  Going  to Chapter  VII, Shri Setalvad particularly drew our  attention to  Sec.46(2) which speaks of including in a Bill  of  Entry the goods mentioned in the bill of lading or other  receipts given  by the carrier to the consignor and to the  unloading of  goods referred to in sec.45 and 48 and argued  that  the reference to ’goods’ here could only be to goods carried and not  to the carriers themselves as in Chapter VI. We do  not think that we can accept this contention. It may be that  in sec.46(2)  and elsewhere the word ’goods’ is used in such  a way  as not to include and as contradistinguished  from  the conveyances  in which the goods are carried, depending  upon the context. But that does not mean that despite the defini- tion, the word is never to be understood as defined and that it should always be interpreted as never to include vessels, aircrafts  and  vehicles even when there is nothing  in  the context justifying their exclusion. We can see no justifica- tion  for holding that a vessel is not ’goods’ for the  pur- pose of sec.46(1).     The  further question is whether the vessels which  have been converted into transhippers to be used in Indian terri- torial  waters for topping up bulk carriers, can be said  to be vessels for home consumption merely on that account, even though when they entered Indian territorial waters they came under  their own power as ocean going vessels  and  notwith- standing that they are still capable of being used as  ocean going vessels and are in fact so used during the  off-season when it is not practicable to do topping up operations  and, for that matter, even during the fair season when they  have necessarily to go into the open sea to go alongside the bulk carriers  in  open anchorages. In both the cases  before  us there can be no doubt that the vessels are not only  capable of  being  used but are used as cargo ships to  carry  cargo from  one  Indian port to another or some times  to  foreign

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ports,  necessarily  going out on the high  seas.  They  are structural and technically competent to go on the high  seas and they have been certified to be so competent by appropri- ate  maritime  authorities. Instead of  remaining  idle  and getting  rusty, during off-season, that is when  because  of inclement  monsoon weather topping up operations  cannot  be done  in  Mormugao harbour, the vessels do go out  into  the open  sea sometimes from one Indian port to another  and  at other times to foreign ports. Of course, even in the  course of  topping  up  operations during the fair  season,  it  is necessary  for the transhiphers to go into the open  sea  to reach the bulk carriers. But, in our view, these  operations do  not  make these vessels ocean going vessels  when  their primary purpose and the purpose for 367 which  they  were permitted to be purchased and  brought  to Indian  waters,  the  primary purpose for  which  they  were licensed and the primary purpose for which they are used  is to  conduct  topping  up operations  in  Indian  territorial waters and not to serve as ocean-going vessels. In the  very application  that  Chowgule and Co. Pvt. Ltd.  made  to  the Government of India for purchasing the vessel, it was stated that they wanted to purchase the vessel for use as a topping up  vessel at Mormugao harbour for iron ore. The  permission granted was also for that purpose. The certificate of condi- tion issued by Bureau Veritas showed that the vessel was  to be mainly employed as an ore loading barge in the harbour of Goa  with the possibility of extending her ’exploitation  in certain periods of the year as bulk carrier for small coast- ing  trade.’ Similarly in the case of the other vessel  also the  application of M/s. V.S. Dempos Company Pvt.  Ltd.  was for  the  purpose of the vessel Jagat Swamini for use  as  a transhipper.  The Government of India also granted its  per- mission  for  the conversion of Jagat Swamini for use  as  a transhipper at Mormugao port. It is clear from the  material placed  before us that both the vessels, the  Maratha  tran- shipper  and Priyamavadha were originally ocean  going  ves- sels,  ,that  they were converted as  transhippers  for  the purpose of topping up iron ore at Mormugao harbour and  that they  traversed  the  open sea from Yokohoma  in  Japan  and Bremen  in  Germany respectively to reach Mormugao.  At  the time they entered the territorial waters at Mormugao it  was distinctly understood and intended that the vessels were  to be primarily used for topping up operations at Mormugao.  If ocean journeys were to be undertaken either they were  inci- dental to the primary purpose of topping up bulk carriers at Mormugao  or they were occasionally undertaken when  topping up  operations  were  not possible at  Mormugao  during  the inclement  monsoon  season. This much is  indisputable  that though  the vessels came on the high seas to reach  Mormugao harbour,  they were brought to India primarily for the  pur- pose of topping up operations at Mormugao.     In  our  view, for the purpose of the  levy  of  Customs Duty,  in order to determine whether any imported goods  are goods for home consumption’, we have to find out the primary intended use of goods when the goods are brought into Indian Territorial waters. If the goods are intended to be primari- ly  used in India, they are goods for home consumption  not- withstanding  that  they may also be used for  the  same  or other  purposes  outside India. We guard  ourselves  against saying  that the converse may be true. The question  whether goods  not intended to be primarily used in India  but  used occasionally for short periods in India also fail within the meaning of the expression ’goods 368

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for  home consumption’ has not been examined by us. We  have only  considered  the question whether  goods  brought  into India for use primarily in India are goods for home consump- tion notwithstanding that they are occasionally or  inciden- tally used outside India. We are of the view that they  are. The vessels, in these two cases, were brought into India  to be  used primarily as Transhippers at Mormugao, though  used incidentally  or occasionally to go into the open sea.  They are,  therefore, ’goods for home consumption’ and not  ocean going  vessels  for the purposes of the Customs  Act.  After their conversion they were no longer ocean going vessels, in the  full sense of the term that is in the sense that  their predominant  purpose  was use as ships traversing  the  open seas. It was, therefore, necessary to present Bills of Entry in respect of both the vessels.     The  learned counsel for the appellants argued  that  it has been the consistent practice of the Customs  Authorities not  to insist on Bills of Entry in the case of ocean  going vessels.  They quoted the statement to that effect from  the counter affidavit filed in Civil Appeal No. 4427 of 1985 and cited  the example of a number of ocean going vessels  which had  not been required to present Bills of Entry. It may  be that  in the case of ocean going vessels, that  is,  vessels which  are primarily used for traversing the open seas,  the Customs  Authorities  have not been insisting  on  Bills  of Entry being presented. It may be that the vessels  mentioned by  the  Appellants as having been permitted to  enter  into Indian  Territorial  waters without Bills of Entry  are  not primarily  intended  to be used in India and  that  they  do answer  the  description of ocean going vessels. We  do  not have  precise  information about those vessels  to  conclude that  the  character of those vessels was the  same  as  the Transhippers with which we are concerned. In  the  result,  both the appeals are  dismissed  with  the costs. A.P.J.                                               Appeals dismissed. 369