Case: Aban Loyd Chiles Offshore Ltd.  Vs. U.O.I.

etc. By the said Act, customs and other fiscal enactments have been extended. Therefore, the object is very clear that the revenue generated from exploration and exploitation should accrue to the coastal State viz. India. As stated above, the area of exclusive economic zone/continental shelf, where the oil rigs are stationed (which of course is outside territorial waters) is deemed to be a part of the territory of India under the Central Government notifications issued pursuant to the provisions of the Maritime Zones Act, 1976. The supply of imported spares or goods or equipments to the rigs by a ship will attract import duty and the ship employed for transshipment of the goods for that purpose would not be a foreign going vessel under Section 2(21) of the Customs Act. The area of discharge or unloading/loading is within India by virtue of the deeming provisions of Sections 6 and 7 of the Maritime Zones Act, 1976. The Customs Act stands extended to the designated areas by virtue of the Maritime Zones Act, 1976. The oil rigs carrying on operations in the designated area is not a foreign going vessel as the same would be deemed to be a part of Indian territory i.e. going from the territory of India to an area which also deemed to be part of the territory of India. 86. As stated above, contiguous zone is that part of the sea which is beyond and adjacent to the territorial waters of the coastal States. The coastal States though do not exercise sovereignty over this part of the sea, however, they are entitled to exercise sovereign rights and take appropriate steps to protect its revenue and like matters. The police and revenue jurisdiction of the coastal States is extended to the contiguous zone as well. 87. The question whether the Courts can look into the provisions of the international treaties/conventions is no longer res integra. This Court in Gramophone Company of India Ltd. v. Birendra Bahadur case [(1984) 2 SCC 534] has held that even in the absence of municipal law, the treaties/conventions can be looked into and enforced if they are not in conflict with the municipal law. It was further held that the same may not be looked into but can also be used to interpret municipal laws so as to bring them in consonance with international law. 88. However, in the event where they do not run into such conflict, the sovereignty and the integrity of the republic and the supremacy of the constituted legislatures in making the laws may not be subject to external rules except to the extent legitimately accepted by the constituted legislatures themselves. The Court held as under: - “The doctrine of incorporation also recognises the position that the rules of international law are incorporated into national law and considered to be part of the national law, unless they are in conflict with an Act of Parliament. Comity of Nations or no, Municipal Law must prevail in case of conflict. National Courts cannot say yes if Parliament has said no to a principle of international law. National Courts will endorse international law but not if it conflicts with national law. National courts being organs of the National State and not organs of international law must perforce apply national law if international law conflicts with it. But the Courts are under an obligation within legitimate limits, to so interpret the Municipal Statute as to avoid confrontation with the comity of Nations or the well established principles of International law. But if conflict is inevitable, the latter must yield.” 89. In Vishaka & others v. State of Rajasthan & others [(1997) 6 SCC 241] , this Court considered the question as to what would be the position in law if there was no law for effective enforcement. It was held as under: - “The international conventions and norms are to be read into them in the absence of enacted domestic law occupying the field when there is no inconsistency between them. It is now an accepted rule of judicial construction that regard must be had to international conventions and norms for construing domestic law when there is no inconsistency between them.” 90. Our municipal law, i.e., Maritime Zones Act, 1976 is not in conflict with the international law, rather the same is in consonance with UNCLOS, 1982. 91. Article 127 of UNCLOS, 1982 deals with customs duties, taxes and other charges. Clause (1) provides that traffic in transit shall not be subject to any customs duties, taxes or other charges except charges levied for specific services rendered in connection with such traffic and Clause (2) provides that means of transport in transit and other facilities provided for and used by the land locked States shall not subject to taxes or charges higher than those levied for the use of means of transport of the transit State. According to this Article, where the goods are in transit to other country shall not be subject to any customs duties, taxes or other charges except for the charges levied for specific services in connection with such traffic. In other words, there is no prohibition for levying customs duties on the goods which are not in transit for onward transmission to any other country. If the goods are brought in only while proceeding to other country, then no customs duty can be levied. In all other cases, it seems to be permissible. 92. In the present case, as the goods were being taken to a territory which would be deemed to be a part of the territory of India though the goods have left the territorial waters, the same would be exigible to levy of duty when they are taken and consumed within the deemed territory of India. There would be no customs duty or any other duty levied while the goods are in transit to the deemed territory of India by any other country although they have gone out of the territorial waters of India.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]69. In exercise of the powers vested in the Central Government under sub-section (6) of Section 6 and sub-section (7) of Section 7 of theMaritime Zones Act,1976, the Government extended the Customs Act, 1962 and the Customs Tariff Act, 1976 to the designated areas of the continental shelf and the exclusive economic zone by notification published in the Official Gazette referred to and reproduced in paragraphs 30 to 33.Pursuant to such recognition of the territorial limit in the Comity of Nations, the coastal State has the power to legislate or take such appropriate measures to exercise its sovereign power over that territorial limit.Maritime Zones Act,1976 was enacted pursuant to such recognition, declaring designated area in the continental shelf/exclusive economic zone and extending the Customs Act to such areas. The notifications referred to in the foregoing paragraphs were issued pursuant to such recognition and the Customs Act and the Customs Tariff Act were extended to the designated area of the continental shelf, exclusive economic zone. There is no challenge to theMaritime Zones Act,1976, the various notifications issued declaring designated area as well as extending the Customs Act as being ultra vires or that its provisions are contrary to the provisions of other enactments. The coastal State hasbut it has only sovereign rights over the continental shelf and the exclusive economic zone. The Customs Act extends to the whole of India and not simply tothe territorial waters ofIndia. Customs Act does not contain any provision permitting determination of the maritime limits. For this purpose, one has to revert to theMaritime Zones Act,1976. Hence, reference to theMaritime Zones Act,1976 is inevitable while considering any issue relating to maritime issues.We do not find any ambiguity in this situation. The interpretation given by the High Court in Pridecase (supra) would not result in any absurd situation as contended by the Counsel for the Appellant. The Appellants wants the Court to read Section 2(21) of the Customs Act in isolation, which would not be the correct approach. The Customs Act has to be read along with the provisions of theWe agree with the views expressed by the Bombay High Court in Pridecase (supra) that in Amership Management case (supra), the High Court of Bombay was concerned with the limited question as to whether the oil rigs are vessels and if so avessel in the light of the controversy raised in that Judgment. In Amership Management case (supra), the High Court after relying on the International Load Lines Convention, 1966 and Central Government Notifications and upon the load lines certificates, held for the purposes of the Customs Act, the expressionis of the widest amplitude and must be construed to include. It was held that since the oil rigs are stationed beyond the territorial waters, supply of importedto the oil rigs stationed outside the territorial waters would qualify for exemption from duty under Section 86 without being required to be warehoused. The question with respect to the applicability of Sections 6 and 7 of theMaritime Zones Act,1976 together with the notifications issued pursuant thereto were not considered at all.In the present case, as the goods were being taken to a territory which would be deemed to be a part of the territory of India though the goods have left the territorial waters, the same would be exigible to levy of duty when they are taken and consumed within the deemed territory of India. There would be no customs duty or any other duty levied while the goods are in transit to the deemed territory of India by any other country although they have gone out ofthe territorial waters of