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2003 (11) TMI 438 - AT - CustomsFuel oil (bunkers) contained in vessels machinery and engines - Classification of - Demand - Special Additional Duty (SAD)
Issues: Assessment of stores on board the vessel, fuel oil contained in the vessel's machinery and engines, and levy of Special Additional Duty (SAD).
In the judgment delivered by the Appellate Tribunal CESTAT, Mumbai, the appeal arose from the order of the Commissioner (Appeals) regarding the assessment of ship stores, fuel oil contained in the vessel's machinery and engines, and the levy of SAD. The appellant contended that the fuel oil in the engine and vessel's machinery should be assessed under Heading 89.08, as directed by CBEC Circular No. 37/96-Cus. The appellant argued that the ship stores were consumed by the crew during the compulsory voyage, and duty should not have been levied on them. Additionally, the appellant challenged the levy of SAD, claiming exemption as the vessel was not sold as a whole but in parts. Upon hearing both sides, the Tribunal observed that there was no evidence to show where the fuel oil was located on the ship, as required for assessment under Heading 89.08. The appellant failed to provide evidence that the fuel oil was in the engine and machinery. The Tribunal rejected the appellant's new plea that the remaining fuel oil was consumed during a specific period, stating it was not a valid legal argument. The Commissioner (Appeals) decision to uphold the original assessment was deemed correct. Regarding the ship stores, the Tribunal noted that the appellant did not provide evidence that the stores were consumed before the vessel was beached. The appellant's claim that the stores were consumed during the voyage lacked supporting evidence, leading to the rejection of their plea against the duty assessment on ship stores. In the context of the levy of Special Additional Duty, the Tribunal referred to Notification 22/99-Cus., which exempts SAD only when imported goods are sold as such. Since the ship was not sold as a whole but in parts, the appellants were not entitled to an exemption from the levy of SAD. Consequently, the appeal was rejected, and the order of the Commissioner (Appeals) was upheld by the Tribunal.
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