++ The alleged pipes were taken to the designated areas in the Continental Shelf and Economic Zone of India and, therefore, the question of treating the transaction as an export transaction would not arise at all.
++ When the goods were taken out for laying in the designated as well as non-designated areas, the property of the goods vested with the importer, i.e., M/s. L&T and not on anybody else and, therefore, the concept of export transaction where the title of the property passed hands also does not exist.
++ The reliance placed on the decision of the European Court of Justice was in the context of a VAT transaction and cannot be applied. In the present case, the pipelines are laid connecting two designated areas and these two designated areas fall within the territorial jurisdiction of India. Therefore, the usage of the entire pipeline is for conveyance of liquids from one part of India into another and, therefore, the entire pipeline has to be construed as being used in India.
++ It is not the case of the appellant that the pipeline laid in non-designated areas is not for use in India as the pipeline is meant for conveyance of liquids. Since the conveyance of liquids takes place from one designated area to another, usage of the pipeline is for such purpose which is within India and, therefore the ratio of the decision of the European Court of Justice would not apply to the facts of the present case. Further, the taxable events in GST and Customs are different. While the taxable event in GST is supply of goods within the taxable territory, the taxable event in the Customs Act is import or export of goods, that is, bringing into or taking out of the goods, a country. Therefore, a decision pertaining to a GST law cannot be applied to a customs transaction.
++ The appellant has argued that the goods were brought for transhipment. This argument is also incorrect for the reason that transhipment takes place when goods are brought into one Port of India for transportation to another port situated outside India. In other words, as per the Trans-shipment Rules notified under Section 54 of the Customs Act, 1962, it is clearly only when the goods move from one port in India to another port situated outside India, it can be said that there is a transhipment of goods which are not subject to levy of customs duty. In the present case, there is no such trans-shipment where the goods are taken from one port of India to another port situated outside India. In the present case, the goods have moved from the Bombay port to a designated place in the Continental Shelf and Exclusive Economic Zone of India and, therefore, the goods have moved from one place in India to another place in India. Therefore, the argument that the goods were trans-shipped or were intended for trans-shipment is bereft of any logic.
++ As regards the contention that since the appellant had filed shipping billsthe transaction should be deemed as exports, the same is also not acceptable for the following reasons. In an export transaction the goods have to be taken outside India by exporter in India to another importer situated outside India and consideration for the transaction has to be received in India. In the case before us, there is no such transaction involving two parties for which payment of consideration is received in convertible foreign exchange. In the present case, the appellant himself has taken the goods from Bombay port to another designated place in the Continental Shelf of India to which the provisions of Customs Act, 1962 have been extended. Further, there is no sale or transfer of property to another person so as to constitute export. In these circumstances, the claim of the appellant that the goods should be deemed to have been exported out of India is quite meaningless and untenable.
++ From the decision of the apex Court in Aban Lloyd Chiles Offshore Ltd. 2008-TIOL-78-SC-CUS it is clear that the Customs Act, 1962 and the Customs Tariff Act, 1975 extends to the Continental Shelf Life and Exclusive Economic Zone of India as notified in the Notifications issued under the Maritime Zone Act, 1976 and merely because the goods are the pipelines passing through a non-designated area, it does not mean that they cannot be subject to levy of customs duty . Since the goods are not in transit to any other country but are in transit to the deemed territory of India, they are liable to customs duty in India and we hold accordingly.
++ Applying the ratio of Burmah Shell Oil Storage vs. The Commercial Tax Officer [AIR 1961 SC 315] reiterated in State of Kerala vs. The Cochin Coal Company [1961 AIR 408]to the facts of the present case it can be easily seen that there is no foreign destination for the line pipes which were laid between two areas notified as part of India. It cannot be, therefore, said that, the pipelines were received as ‘imports' in the non-designated area. In other words, there is no export of line pipes in non-designated area. Hence, they are liable to duty in India as "imports" .
++ A telecommunication satellite is physically situated in the outer space but its use is in India and when such satellites are brought to India for launching in outer space, customs duty will apply. Similarly, in the case of ships or aircrafts brought to India for registration in India, they are subjected to Customs duties even though most of the time they may not be physically present in India but might be plyingoutside India. Can it be said that such ships/aircrafts are not used in India? Following the same analogy, when a pipeline is laid between two places in India, even if part of the pipeline may lie outside India, its use/consumption is in India . Customs duty is destination based consumption tax and the levy is imposed where the goods are consumed. Therefore, in the present case, since the pipe lines are used/consumed in India, they are liable to customs duty and we hold accordingly.
