THE GAZETTE OF INDIA: EXTRAORDINARY

|PART III-^SEC. 4]

SCHEDULE

Case No. TAMP/65/2001-GenL

(Passed on this 8th day of April 2002)

A representation of M/s. Mercator Lines Limited about classification of vessels

into coastal or foreign-going category for the purpose of levying charges by the Kolkata Port

Trust (KoPT) was decided by this Authority vide its Order dated 12 May 2000. The Order

categorically charities that for the purpose of levying vessel related charges, coastal vessels shall

be taken to mean the vessels from one Indian Port to another Indian Port'; and, the nature of

cargo or its origin will be of no relevance for this purpose.

1-2.

This Authority had also taken similar decisions in respect of representations

reoeived from M/s. Shiva Marketing Limited and M/s. Sentrana Maritime Pvt. Limited relatinq to

the KoPT.

1.3.

In Its Order dated 28 March 2001 relating to general revision of the Scale of

Rates of the KoPT, this decision was reiterated.

1.4.

Eventhough the Issues Involved in these cases are relevant to all the major

ports, this Authority has, however, not extended this decision so far to the other Major Port Trusts

through a common adoption Order.

While disposing of another ease relating to a proposal of the Mumbai Port Trust

(MBPT) for a revision of wharfage charges on crude oil, POL products and chemicals and pier

dues at the Marine Oil Terminal and Pir Pau, this Authority had extended the decision taken in

case of the KoPT to the MBPT vide its Order dated 28 June 2001 which was notified on 9 July

2001. In this Ordar, this Authority has held th© following:

"ft is to be admitted that the decision taken by tote Authority about levying charges on

daughter vessels ai the CPT has not yet been extended to the other major ports through

a common adoption order, although the issue is relevant to all Major Ports. While the

matter can be processed further for issuing « common adoption order, the MBPT case

con be decided immediately by extending the decision taken in the ceoe of CPT. The

MBPT, therefore, is directed to levy only coastal rates on daughter vessels receiving

cargo from the mother vessels in midstream and discharging it at the MBPT piers or

carrying n to other Indian Ports- It needs to be clarified that this procedure is to be

adopted for realising vessel-related charges; without prejudice to observance of

necessary Customs formalities for clearance of cargo."

3.1 -1 -

in this backdrop, It was decided to consult all the Major Port Trusts (except the

' KoPT and the MBPT), INSA, CSLA, SCI, all the Steamer Agents' Association and AU.Chambere

of Commarca & Industry at th© major port citias before extending the decision of/this Authority to

all the Major Port Trusts.

3.1.2.

In this regard, letters were sent to all the Identified organisations on 1 August

2001 for their comments on inclusion of the following provision in the SORs of the other Major

Port Trusts:

"The status of the vessel, as borne out by its certification, shall be the deciding factor for

its classification as 'coastal' or foreign-going' for the purpose of levying ve&sel-mlated

charges; and, the nature of cargo or fts origin will not be of any relevance for this

purpose,"

3-2.

The comments received from the Port Trusts are summarised below:

0).

The Paradip Port Trust (PPT), the Cochin Port Trust (COPT) and the Jawaharlal

Nehru Port Trust (JNPT) have agreed with the proposed provision.

Oi).

The Tuticorin Port Truat (TFT) has opined that a comprehensive Order providing

definition or 'coastal' and foreign-going vessel' as well as the provisions relating

to the conversion of foreign- going and coastal vessel In one single notification is

necessary to bring clarity and eliminate complications of billing. The TFT has,

however, expressed its agreement with the proposed provision.

010-

The Chennal Port Trust (CHPT) has stated that the deciding factor for

classification of a vessel as coastal or foreign-going is the nature of cargo and Its

origin, as intended under Section 51 of the Major Port Trusts Act 1963 as well as

under certain clauses given in the SOR of the CHPT. If the proposed provision

is included, then it will be contravening Section 51 of the Major Port Trusts Act

The CHPT has, therefore, requested not to Include the proposed provision,

which does not take into account the nature of the cargo or its origin for

classification of the vessels as it may lead to loss of legitimate revenue to all the

Major Ports Trusts.

(tv).

The Kandla Port Trust (KPT) has stated that the nature and the origin of the

cargo will have no relevance only in case of a vessel which is used exclusively

for coastal trade; and, therefore, it has indicated its preference to consider the

nature, origin/destination of the cargo for determining the status of the vessel as

coastal or foreign-going in case of conversion into foreign-going.

(v).

The Visakhapatnam Port Trust (VPT) has stated that in case of transhipment of

cargo from one vessel to another vessel at an Indian Port for subsequent

discharge at another Indian Port, the Port at which such transhipment takes

place cannot be treated as the load Port as the intermittent operation of

transhipment Is carried out for the convenience of vessels and hence the vessel

loading such transhipment cannot be treated as coastal vessel. In such a case,

the origin of the cargo shall be taken as the basis for deciding the status of a

vessel ae foreign-going or coastal, but not by the intermittent Port where cargo is

transhipped.

(vi).

The New Mangalore Port trust (NMPT) has Invited the attention to the

explanation given in Part II of the first Schedule of the Indian Ports Act 1908

which indicates relevance of cargo for classification of vassal.

3.3.

Despite a number of reminders, comments have not been received from the

Mormugao Port Trust (MOPT) so far. It is noteworthy that all the port trusts were requested to

furnish their comments by 27 August 2001

3.4.

Comments have been received from Chennai Steamer Agents Association,

Tuticorin Steamer Agents Association, Kanara Chamber of Commerce & Industry, Utkal

Chamber of Commerce & Industry, Tuticorin Chamber of Commerce, Association of Shipping

Interest in Calcutta, Visakhapatnam Port User Association. Cochin Steamer Agents' Association.

Federation of Port Users and Custom House Agents', Hindustan Chamber of Commerce,

Madras Chamber of Commerce and Industry, Container Shipping Lines Association (India),

Mangalore Steamer Agents' Association, Calcutta Chamber of Commerce, Kalinga Steamship

Agents Association, the Indian Oil Corporation Limited (IOCL) and the Oil Co-ordination

Committee (OCC).

3.5.1.

All the user organisations have fully agreed with the proposal of the inclusion of

the proposed provisions in the Scale of Rates of Major Port Trusts.

3.5.2.

The Chennai Steamer Agents Association has further requested that the

amendment must be made with retrospective effect from July 1008 in line with the decision of

this Authority taken in the oaee of M/s. Meroator Lines Limited, ft has also suggested that in the

proposed amendment, the word 'certification' may be replaced by the words 'certification by

Customs Authorities or O.O. Shipping' for the purpose of clarity.

ti-JlCeffol^^

THE GAZETTE OF INDIA .EXTRAORDINARY

[PART ED—SEC 4]

3.6.

The Indian Oil Corporation Limited (IOCL) ha* stated that while all the port* are

collecting vessel-related charges based on coastal tariffs In respect of their vessels, the CHPT,

the VPT, the KOFT and the KPT are following different methods at different times for calculation

of these charges. On being pointed out, only the KoPT and the CHPT (partly) has given

assurance of refund. Their oargo brought in by the larger vessels up to the Indian ooast is

transhipped into smaller vessels, (which are Indian coastal vessels) off the port/within the port for

ultimate delivery to destination the port

The IOCL has also prayed that the proposed

amendment may be given retrospective effect from 2 June 1998.

3.7.

The Oil Co-ordination Committee (OCC) has communicated that there is no

consistency in the methodology of charging Marine dues at different ports, and requested to \

resolve this pending Issue.

3.8.

Comments have not been received from other user organisations despite of a

number of reminders issued In this regard.

With reference to the comments received from the Major Port Trusts and the

representative bodies of port users, the following position emerges:

0)'

The case relating to M/s. Mercator Lines Limited - vs - Kolkata Port Trust has e«t

the following position¹.

(a).

Vessel-related charges are to be levied with reference to the status of

the vessel.

(b).

The status of vessel is determined by(to certification. Th© nature of

cargo or 'origin' of cargo has no relevance In this context at all.

(c).

With reference to this Authority's Order in the Mercator Lines case, the

Calcutta Port Trust has referred to an advice given by the Ministry of

Surfaoo Transport in 1966 to levy the oharges at foreign-going vessel

rates on the daughter vessel, which carry foreign cargo even if

transhipment takes place from mother vessel at the Indian Port. While

dealing with the objection of the KoPT as a part of the case relating to

general revision of its Scale of Rates, this Authority had oboervad that

the Government communication cited by the KoPT could only be seen

as an executive Instruction which could not supersede the statutory

Order passed. This Authority, therefore, found no reason to review its

decision relating to the^classification of vessels for the purposes of

levying vessel-related charges.

(li).

It has been the stated policy of this Authority to adopt uniform principles,

approaches, and norms in the matter of tariff fixation at the Major Port Trusts.

The principle already set in the case of one of the Major-PoNft Jruate and,

extended to another can ba made to apply uniformly to all the, other Major Port

Trusts.

(ill).

The Issue-now In consideration Is about introduction of a specific provision In the

Scales of Rates of all the major ports for classification of vessels for the purpose

of levying vessel-related charges.

Users haw unanimously endorsed the

proposed provision. Out of the 11 major ports, the proposed provision is already

In operation at 2 ports and 4 more ports have now agreed to the Introduction of

the proposed provision. The MOPT has not responded. In effect, only 4 major

ports have expressed some reservations about inclusion of the proposed

provision In their Scale of Rates.

(iv).

The objections raised by the CHPT are not at all relevant to the issue under

consideration. This Authority Is empowered to prescribe the Scale of Rates and

Statement of Condrtionalrties relating to services rendered by the major ports.

The CHPTs Scale of Rates prescribing anything contrary to the provision now to

be introduced by this Authority stands automatically superseded when the

revised provision Is introduced. An existing provision In the Scale of Rates

cannot be a deciding factor for not introducing any change.

The CHPT has also referred to Section 51 of the Major Port Trusts Act Section

51 ibid empowers this Authority to allow concessional rates in case of coastal

goods. There Is nothing mentioned in this Section about coastal vessels; and,

therefore, the proposed provision Is not violative of the provisions of the Act

It is to be recognised that the proposed amendment is not for providing any

(new) concession in tariffs to coastal vessels.

The intention is to define

classification of the vessel for the purpose of levying notified charges In the

Scale of Rates. All that is proposed to be introduced is to require the ports to

follow the classification made by the competent authority; and, not to link nature

of cargo for levying vessel-related charges.

(v).

The NMPT has referred to some provisions in the Indian Ports Act, 1908. Part-n

of the First Schedule of the Indian Ports Act refers to levy of Port Dues at ports

In West Bengal (other than major ports), rf any. The reference of the NMPT Is,

therefor*, totally out of context.

(vt).

The VPT has pointed out that the origiru>f cargo must be the basis for deciding

the status of the vessel as foreign-going or coastal. This issue has already been

settled in the Mercator Lines case relating to the Kolkata Port Trust The VPT

has not given any further arguments to rebut this Authority's prescription about

going by the status of the vessel for the purpose of levying vessel-related

charges.

(vii").

The KPT has referred to this Authority's Order dated 2 June 1998 where a

reference was made to the 'coastal cargo'. The KPT has mentioned that this

Order of the TAMP is to encourage coastal trade and hence coastal cargo is

relevant It has already been clarified by this Authority in Its Order relating to the

Mercator Lines case that the reference of loading and unloading of the cargo

was made in its Order of 2 June 1998 to specify the process of giving effect to

the Conversion Order / License in respect of foreign-going vessels. In other

words, as already stated in that Order, the cargo loading and unloading aspect

shall be seen as a 'conversion factor' and not as a 'characteristic feature' of the

status of the vessel. That being so, there is need to fake the prescriptions made

In that Order to be contradictory to the provision proposed to be introduced now.

In any case, this issue has already been considered in the general revision case

of the KPT decided recently and the proposed provision has already been

inserted in the Scale of Rates of the KPT.

(viii).

While agreeing to the proposed provision, the TPT has requested to clarify the

applicable rates in respect of vessele converting their status at the port It had

already been clarified, in response to doubts raised by different ports, that the

corresponding rates should be applied depending on the status of the vessel at

the time of the incidence of such charge.

Port Dues being an entry fee ie to be realised as per the status of the vessel at

the time of entry. If the status of the vessel Is changed during its stay In the port,

then, 50% of the pilotage fee for Inward and outward leg of the vessel depending

upon the status of the vessel at each" leg can be levied. Berth hire for the period

of 8 hours in which the vessel changes its status can be charged on the basis of

the status of the vessel at the beginning of the relevant bfook of 8-hour period.

(rx).

The TPT has also requested to describe certification of the vessel dearly. The

Chennai Steamer Agents' Association (CSAA) has suggested to specifically

mention the certification by the Customs authoritier«r the Director General of

THE GAZETTE OF INDIA: EXTRAORDINARY

JPARTIII^SEC.41

Shipping as relevant., The suggestion of the CSAA is for removino any

ambiguity In applying the provisions. This Authority Is, therefore, inclined to

accept the suggestion made by the CSAA.

(x).

The CSAA and the IOCL haw demanded that the proposed provision shall be

introduced retrospectively since it is only an elaboration of the principles already

settled In this Authority's Order dated 2 June 1988. As has already been

mentioned, the Order of 2 June 1998 is to specify the process of giving effect to

Conversion Order / License in respect of foreign-going vessels. All such cases

falling within the purview of that Order are to be dealt with in aocordanoe with the

prescription made therein. The proposed provision is a general prescription to

indicate the classification of vessels for the purpose of levying vessel-related

charges. This provision is proposed to be Introduced in the light of different

practices adopted by the major ports for such classification and, more precisely,

to require them not to link the nature of cargo or its origin with the status of the

vessel.

The Orders of this Authority ordinarily take prospective effect Even though this

Authority can make retrospective amendments to the Scales of Rates of the

major ports, cuch an action is taken only in exceptional cases. The case in

reference does not throw up any exceptional circumstances. That being so, this

Authority finds Its reasonable to introduce the proposed provision with a

prospective effect

(xi),

. The existing Scales of Rates of the major ports may contain provisions contrary

to the one which is proposed to be introduced now. It will be a time-oonsuming

exercise to review all the condltlonalitles In the Scales of Rates of all the major

ports before introducing the proposed provision.

Such a review will be

undertaken at the time of the next general revision of the respective Scales of

Rates. In this backdrop, it it clarifiecHhat the proposed provision Is absolute and

ft supersede* any other provision(e) in the Scale of Rates contradicting it.

(xj'i).

The proposed provision, being a conditional relating to vessel-related charges,

.will come into effect on expiry of 30 days from the date of its notification in the

Gazette of India. This position will not hold good in the cases of the KOPT,

MBPT, and the KPT where this provision has already been ordered to be

implemented. Notwithstanding a formal Inclusion of this provision now in the

Scales, of Rates of these ports, it will be deemed to have come into operation at

these ports retrospectively from the effective of dates of the specific Orders

passed in their cases ordering implementation of this arrangement

5.1.

Jn the result, and for the reasons given above, and based on a collective

application of mind, this Authority Introduces the following conditional In the Scales of Rates of

all the major ports:

"The status of the vessel, as borne out by its certification by the Custom's orthe Director

General of Shipping, shall be the deciding factor for its classification as "\oastaf or

forotgn-QoJng' for the purpose or levy of vessel-related charges; and, the nature of cargo

or Ha origin will not be of any relevance for this purpose."

5.2.

All the major ports are directed to inolude the above provision In their Scales of

Rates appropriately.

This Order will come into effect as explained In paragraph 4 (xif) above.

S, SATHYAM, Chairman

[ADVT. myrW143/2002/Ejdy,l

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