(Published in Part – III Section 4 of the Gazette of India, Extraordinary)
| No. 78 | New Delhi, the
17 April, 2001 |
Tariff
Authority for Major Ports
In exercise of the powers conferred by Sections 48, 49 and 50 of
the Major Port Trusts Act, 1963 (38 of 1963), the Tariff Authority
for Major Ports hereby prescribes commonly for all the major port trusts a
conditionality about classification of vessels for the purpose of levying
vessel-related charges as
in the Order appended hereto.
( S. Sathyam )
Chairman
O
R D E R
(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 clarifies 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 received from M/s. Shiva Marketing Limited and M/s.
Sentrans Maritime Pvt. Limited relating 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.
2.
While disposing of another case 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 Order, this Authority has held the following:
“It
is to be admitted that the decision taken by this Authority about levying
charges on daughter vessels at 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 a common adoption order,
the MBPT case can be decided immediately by extending the decision taken in the
case 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 it 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 All Chambers of Commerce &
Industry at the major port cities 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 vessel-related charges; and, the nature
of cargo or its origin will not be of any relevance for this purpose.”
3.2.
The comments received from the Port Trusts are summarised below:
(i).
The Paradip Port Trust (PPT), the Cochin Port Trust (COPT) and the
Jawaharlal Nehru Port Trust (JNPT) have agreed with the proposed provision.
(ii).
The Tuticorin Port Trust (TPT) has opined that a comprehensive Order
providing definition of ‘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 TPT has, however, expressed its agreement with the
proposed provision.
(iii).
The Chennai 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.
(iv).
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 as 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 vessel.
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 1998 in line with the
decision of this Authority taken in the case of M/s. Mercator Lines
Limited. It has also
suggested that in the proposed amendment, the word ‘certification’
may be replaced by the words ‘certification by Customs Authorities or D.G.
Shipping’ for the purpose of clarity.
3.6.
The Indian Oil Corporation Limited (IOCL) has stated that while all the
ports are collecting vessel-related charges based on coastal tariffs in respect
of their vessels, the CHPT, the VPT, the KOPT 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 cargo brought in by the larger
vessels up to the Indian coast 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.
4.
With reference to the comments received from the Major Port Trusts and
the representative bodies of port users, the following position emerges:
(i).
The case relating to M/s. Mercator Lines Limited - vs - Kolkata
Port Trust has set the following position:
(a).
Vessel-related charges are to be levied with reference to the status of
the vessel.
(b).
The status of vessel is determined by its certification.
The 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 Surface Transport in 1986 to levy the charges 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
observed 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.
(ii).
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 Port Trusts and,
extended to another can be made to apply uniformly to all the other Major Port
Trusts.
(iii).
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 have 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
Conditionalities relating to services rendered by the major ports.
The CHPT’s 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-II of the First
Schedule of the Indian Ports Act refers to levy of Port Dues at ports in West
Bengal (other than major ports), if any.
The reference of the NMPT is, therefore, totally out of
context.
(vi).
The VPT has pointed out that the origin of 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 take 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 vessels 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 is 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 block of 8-hour period.
(ix).
The TPT has also requested to describe certification of the vessel
clearly. The Chennai Steamer
Agents’ Association (CSAA) has suggested to specifically mention the
certification by the Customs authorities or the Director General of Shipping as
relevant. The suggestion of the CSAA is for removing 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 have 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 1998.
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
accordance 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, such 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-consuming exercise to review all the conditionalities 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 is clarified that the proposed provision is
absolute and it supersedes any other provision(s) in the Scale of Rates
contradicting it.
(xii).
The proposed provision, being a conditionality 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.
In the result, and for the reasons given above, and based
on a collective application of mind, this Authority introduces the
following conditionality in the Scales
of Rates of all the
major ports:
“The
status of the vessel, as borne out by its certification by the Customs or
the Director General of Shipping, shall be the deciding factor for its
classification as ‘coastal’ or ‘foreign-going’
for the purpose of levy of vessel-related charges; and, the nature
of cargo or its origin will not be of any relevance for this purpose.”
5.2.
All the major ports are directed to include the above provision in their Scales
of Rates appropriately.
6.
This Order will come into effect as explained in paragraph 4 (xii) above.
( S. Sathyam )
Chairman