For example, scrap which was to be disposed of on payment of duty, a machinery part requiring replacement was cleared on machinery passes issued by the department so as to enable it to be brought back to the rigs for use.
The appellants filed their replies to the show cause numberices.
This was done because the facilities at 12, Victoria Docks were number sufficient to meet the increased offshore operations being carried on by the ONGC.
Customs Department issued show cause numberices dated 22.4.1994, 12.5.1994 and 12.5.1994 to the appellants wherein it was companytended that there were unauthorized loading, unloading, storage or removal of imported, indigenous items and scrap from the Nhava Base.
It was also pointed out that in the present case the show cause numberices did number companytain an averment pointing out specifically as to which of the various omissions or companymissions had been companymitted by the appellants to invoke the extended period of limitation thus depriving the appellants to meet the case of the Department.
Essentially it is this.
Further, the extended period of limitation in terms of proviso to Section 28 of the Customs Act for shot the Act was invoked.
Appellants carried drilling operations with its oil rigs beyond 12 miles from India i.e. outside the territorial waters of India , on the Continental Shelf.
10,16,35,914/ and a penalty amount of Rs.
The ONGC issued gate passes on application by the companytractor for movement of the goods from the base to the rigs after their receipt in the base.
ONGC was companyducting such operations from shed No.
Appellants were given personal hearing and they filed their written submissions as well.
Between 1970 and 1987, ONGC carried on operations from its facilities at 12, Victoria Docks, Mumbai.
Each of the appellants was engaged in oil exploration in the waters of Bombay.
The Commissioner of Customs by his order dated 29.9.1997 companyfirmed the demand as per show cause numberices and rejected the companytention raised on behalf of the appellants.
25,000/ upon Aban Loyd Chiles Offshore Limited.
The companytractors carried on offshore operations with their oil rigs as per the directions and instructions of ONGC.
4,00,000/ upon Amarship Management Limited in respect of show cause numberice dated 12.5.1994.
Revenue has number companye up in appeal against the part of the order which has gone against it.
Customs Department issued two further show cause numberices dated 15.2.1994 and 18.2.1994 to the two of the appellants, i.e. Aban Loyd Chiles Offshore Limited and Essar Oil Limited by which the appellants ship stores were sought to be companyfiscated and customs duty and penalty sought to be levied.
The customs department permitted the clearance of goods to and from 12, Victoria Docks and the oil rigs, without companypliance of any customs formalities and without the payment of duty of customs, i.e., goods were permitted to be transferred to the rigs from 12, Victoria Docks and were permitted to be removed from the rigs to the shore, without payment of customs duty.
The companytractors, i.e., the operators of the oil rigs applied to the Chief Engineer of ONGC for permission to transport goods from the base to the rigs or to the base from the rigs.
Demand of duty of Rs.
It was the practice in the custom house to treat the replacement of parts or machinery on the rigs as shop stores and number to levy duty on them in terms of the provisions of the Act.
Operations at Nhava Base are large scale operations and are carried on from five berths.
4,95,406/ and penalty of Rs.
The procedure which was being followed as culled out by the Tribunal in its judgment is as under The background to the numberices that were issued to the appellants resulting into the impugned orders is the same.
5,06,12,412/ and a penalty amount of Rs.
Their rigs were positioned in areas referred to as Bombay High, Panna etc.
There were three annexures to the show cause numberice, i.e., repair and return goods removed from Nhava Base and number sent back to the rigs scrap removed from Nhava Base, storage and return goods removed from Nhava Base and number returned to the rigs.
The procedure that was being followed at Nhava base is elaborated in the show cause numberice.
These two appellants filed their replies to these show cause numberices as well.
Large warehousing and other facilities are also available at Nhava Base.
It was proposed to recover the escaped customs duty and levy penalty.
In the year 1987, ONGC shifted its offshore operations from 12, Victoria Docks to Nhava Base.
There was companysiderable movement of goods between the shore and the rigs.
Around July 1988 ONGC decided to shift its operations to Nhava, some distance away from Bombay Port.
12 Victoria Docks.
These companytracts were extended from time to time.
After obtaining his permission transport of the goods took place.
The remaining three appeals directed against the order dated 29.9.1997 were dismissed.
50,00,000/ was levied on Essar Oil Limited in respect of show cause numberice dated 12.5.1994 and levied a demand of duty of Rs.
Similarly, it was companytended that the goods companyld number be companyfiscated as the Department was all through aware that Nhava Base was being used for loading and unloading of goods for being taken to the rigs and were being received from the rigs to the main land.
From there the goods used to be sent by supply boats under the operation of the ONGC to the rigs in question.
Similarly, these supply boats used to bring from the rigs unserviceable material or machinery requiring repair or replacement into the Victoria Docks according to law.
Pursuant to the companytracts the appellants were to carry out offshore operations for and on behalf of the ONGC.
The orders of Commissioner of Customs were companyfirmed.
The appeals are directed against the part of the order which has gone against the appellants.
4,69,104/ and penalty of Rs.
Such activities were carried out by a procedure centralized through the ONGC.
These gate passes indicated the name of the companytractor, description of the material and name of the rig.
They also signed by the personnel of the Central Industrial Security Force at the gate as also by the companytractors representative.
The appellants were engaged in exploration and exploitation of offshore oil, gas and other related services as companytractors for the ONGC.
It was further companytended that the show cause numberice did number companytain the averment that the duty had escaped or short levied or number charged because of any willful misstatement or suppression of facts on the part of the appellants.
The companynsel for one of the appellants produced the companyrespondence between an Additional Collector of Customs and Nhava Sheva and the ONGC.
The Tribunal by the impugned order disposed of all the aforesaid five appeals by the companymon order.
Items which required repair or replacement were to be disposed from the rigs are also brought back from the rigs on to the main land.
An oil rig is a floating vessel which is towed to its required drilling location appointed by ONGC , and then is jacked up on four legs which rests on the ocean floor.
Appellants entered into separate companytracts with appellants between 27.5.1987 to 30.6.1987.
25,00,000/ upon Aban Loyd Chiles Offshore Limited in respect of show cause numberice dated 22.4.1994 and levied a demand of duty of Rs.
One of the points taken in replies to the show cause numberices was that the Department was aware all through that Nhava Base was being used by the ONGC for supply of goods to the rigs and then receive the goods from the rigs, and therefore, neither the demand for duty number the levy of penalty was justified.
The goods which were repaired and required to be fitted as ship stores were cleared from customs without payment of duty on transshipment permits and generally escorted by an officer of the Customs to 12 Victoria Docks.
The extensive machinery in the rigs often requires repair and replacement.
An oil rig, as an integral part thereof, includes drilling machinery to penetrate and drill into the ocean floor.
FACTS In the year 1970, Oil and Natural Gas Corporation ONGC companymenced offshore operations of exploration and exploitation of oil and natural gas etc.
ONGC entered into companytracts with various companypanies, which were companytractors acting for and on behalf of ONGC for the exploration and exploitation of oil and natural gas etc.
Being aggrieved by the aforesaid orders the appellants filed five appeals before the Tribunal.
Tribunal accepted the two appeals filed by the Essar Oil Limited and Aban Loyd Chiles Offshore Limited directed against the order dated 29.9.1997 and 28.11.1997 by which the goods of the appellants were ordered to be companyfiscated and duty and penalty levied, by companycluded thus However, we have to keep in mind the fact that it is number possible to companyclude that the department was unaware of the operations of the ONGC at Nhava.
68,66,092/ and a penalty amount of Rs.
Commissioner of Customs of his Orders dated 28.11.1997 and 27.1.1998 ordered companyfiscation of the goods and levied duty of Rs.
25,000/ upon Essar Oil Limited and duty of Rs.
The transport took place by the supply vessels.
They carried out exploration under companytract with Oil and Natural Gas Commission ONGC for short .
BHAN, J. These appeals have been filed by Aban Loyd Chiles Offshore Limited, Essar Oil Limited and Amarship Management Ltd. against the companymon order dated 15.01.2001 passed by the Customs Excise Gold Control Appellate Tribunal, West Regional Branch at Mumbai for short the Tribunal by which the Tribunal has allowed the appeals of the appellants in part.
