2010 (9) TMI 460 - AT - Customs

Demand - The demand arises on account of the Commissioner denying the benefit of exemption from Customs duty in terms of Notification No. 21/2002 dated 1-3-2002, more specifically, Sl. No. 351 of the list attached to the Notification - The conditions specified to qualify for the exemption as per Sl. No. 351 is, inter alia, that the vessel is an ocean going vessel. Ocean going vessesl is defined to include scientific research vessel - prima facie, the impugned imports satisfied the conditions of the Notification No. 21/2002 to qualify for the exemption sought to be denied to the appellants - Decided in the favour of the assessee

Summary

Issues:
1. Denial of exemption from Customs duty under Notification No. 21/2002.
2. Eligibility criteria for exemption under Sl. No. 351 of the Notification.
3. Interpretation of "ocean-going vessel" to include "scientific research vessel."
4. Consideration of repairs undertaken by a registered ship repair unit.

Analysis:

The judgment by the Appellate Tribunal CESTAT, Bangalore addressed the issue of denial of exemption from Customs duty under Notification No. 21/2002. The appellant, a Central PSU, had imported parts for repairing a vessel and was required to pre-deposit a significant amount including Customs duty, interest, and penalty. The demand arose as the Commissioner denied the benefit of exemption under Sl. No. 351 of the Notification, which pertains to goods for repairing ocean-going vessels by registered ship repair units.

Upon review, the Tribunal found that the repairs were indeed undertaken on an ocean-going vessel, specifically a scientific research vessel, as defined in the Notification. It was established that the repairing unit was registered with the Director-General of Shipping, Government of India. The Tribunal noted that the imported goods satisfied the conditions of the Notification for exemption, despite the denial by the Commissioner. Consequently, the Tribunal ordered a complete waiver of the dues against the appellant and stayed the recovery pending the appeal's decision.

In conclusion, the judgment emphasized the importance of correctly interpreting the eligibility criteria for exemption under specific Notifications, especially regarding the definition of terms like "ocean-going vessel." The Tribunal's decision to grant relief to the appellant was based on a thorough analysis of the facts and the applicable legal provisions, ensuring a just outcome in the dispute over Customs duty exemption for vessel repairs.