In the High Court of Judicature at Madras Dated : 05.1.2010 Coram : The Honourable Mr.Justice K.RAVIRAJA PANDIAN and The Honourable Mr.Justice M.M.SUNDRESH CIVIL MISCELLANEOUS APPEAL NO.3484 OF 2009 Commissioner of Customs No.1, Williams Road Cantonment, Trichy-1. ...Appellant Vs M/s.Frontier Aban Drilling (India) Ltd. ...Respondent APPEAL under Section 130 of the Customs Act read with Rule 8 of the Customs (Appeals) Rules against Final Order No.717 of 2007 in C/Appeal No.42 of 2006 dated 6.6.2007 on the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai-6. For Appellant : Mrs.P.Bhuvaneswari J U D G M E N T (JUDGMENT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J This appeal has been filed against the order of the Customs, Excise and Service Tax Appellate Tribunal in Final Order No.717 of 2007 in C/Appeal NO.42 of 2006 dated 6.6.2007 whereby the Tribunal confirmed the order of the Commissioner of Customs dated 13.4.2005 whereby the proposal of the Deputy Commissioner of Customs, Cuddalore, by issuance of a notice as to why the importer should not be held liable under Section 111(O) of the Customs Act (hereinafter referred to as the Act) and penalty under Section 112(a) of the Act has been set aside. 2. The minimum facts required for the purpose of disposal of this appeal are as follows : https://hcservices.ecourts.gov.in/hcservices/ The importer – the respondent herein, which is a sub-contractor of M/s.Hardy Exploration and Production (India) Inc., imported through the port of Cuddalore a drill ship by filing a bill of entry No.8/2002-03 dated 29.6.2002, which drill ship was valued at Rs.148.92 crores meant for oil well drilling operations at PY 3 Oil Field area falling under customs tariff CH No.8905.90 by availing exemption contained under the Notification No.21/2002 dated 1.3.2002. Condition NO.31 inter alia stated that if the goods are imported by an Indian Company or Companies, a foreign company or foreign companies in connection with petroleum operations to be undertaken under a contract with the Government of India and where the importer is a contractor and certified from the duly authorized officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India to the effect that the imported goods are required for petroleum operations and the importer produced to the Deputy/Assistant Commissioner of Customs at the time of importation a certificate from the duly authorized officer of the Directorate General of Hydro Carbons, Government of India to the effect that the imported goods are required for petroleum operations referred to in Clause (a) and have been imported under the contract referred to in that Clause and containing the name of such sub.contractor, an affidavit to the effect that such sub.contractor is a bona fide sub.contractor of the contractor and an undertaking from such contractor binding him to pay any duty, fine or penalty that may become payable, if any of the conditions of this notification are not complied with by such sub.contractor. After performing the contract work of drilling, the importer re-exported the ship. However, a part of the drill ship, which would be used for the purpose of drilling namely blow out preventer and its accessories during the operation sheared off and immersed in the sea, which is admittedly irretrievable. Because of the non exportation of the particular part, the show cause notice was issued. The Commissioner of Customs as well as the Tribunal held that the non exportation of that particular part would not per se amount to violation of exemption condition and set aside the show cause notice issued for recovery of the amount in a sum of Rs.5,75,84,140/-. 3. Before us, it is contended that the ship and the accessories contained therein had to be insured by the importer so as to have the benefit of the Notification, which it failed to do. 4. We have carefully considered the arguments of the learned counsel for the appellant and perused the materials available on record as well as the orders of the lower Authorities. No such condition has been imposed or stated to be imposed in the Notification. It is the admitted case of the Department that the blow out preventer and its accessories were immersed in the deep water of the sea and became irretrievable. Hence, the importer cannot be directed to perform the function, which is impossible of performance. It is a different matter if it is the case of the Department that the https://hcservices.ecourts.gov.in/hcservices/ importer retrieved the sheared off part of the drill ship and diverted it for some other purpose. On the contrary, it is the admitted case of the Department that the blow out preventer has been sheared off and immersed in the deep water of the sea, which is irretrievable. That was the reason given by the Tribunal for confirming the order of the Commissioner of Customs, who set aside the proposal of the Department to recover a sum of Rs.5,75,84,140/- and for imposition of penalty. We do not find any merit in this case so as to entertain the appeal in the above stated facts and circumstances of the case. 5. The civil miscellaneous appeal is dismissed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To The Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai-6. 1 cc To M/s.P.Bhuvaneswari,Sr.Counsel for Central Government, SR.No.305/10 CMA.NO.3484 OF 2009 TM(CO) sra 18.01.2010 https://hcservices.ecourts.gov.in/hcservices/