2015 (10) TMI 270 - AT - Customs

Classification of Vessel with surplus fuel under CTH 8908 Appellants are contesting imposition of redemption fine and penalties in respect of importation of vessels for breaking purpose alongwith surplus fuel Held that - identical issue was discussed by Tribunal in case of M/s. R.K. Industries and anrs. vs. Commissioner of Customs 2015 (9) TMI 369 - CESTAT AHMEDABAD held that as per clarification/opinion of Joint DGFT, surplus fuel stored in fuel tanks of vessels/ship brought for breaking up is classifiable under 89.08 along with main vessel Well settled law that clarifications on Import Policy issued by office of DGFT is binding on Customs As imports under ITC(HS) 89.08 are free without any restrictions, therefore, such MGO/HSD contained in vessels brought in for breaking up, cannot be held as liable for confiscation under Customs Act, 1962 and no penalties upon appellants are imposable In view of decision of Tribunal appeals are allowed Decided in favour of Assesse.

Summary

Issues Involved:
Appeal against imposition of redemption fine and penalties in importation of vessels for breaking purpose.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad addressed a common issue involving the contestation of redemption fine and penalties imposed on the importation of vessels for breaking purpose. The Tribunal considered the appeals collectively for disposal after hearing both sides and examining the records. The Tribunal referred to a previous case involving a similar issue where the appeals were allowed with consequential relief. In that case, the Tribunal set aside the redemption fine and penalty imposed. The Tribunal highlighted the classification of surplus fuel stored in vessels brought for breaking up under CTH 8908, along with the main vessel. The Tribunal emphasized the importance of clarifications issued by the Directorate General of Foreign Trade (DGFT) regarding the classification of items under the Import Trade Control (ITC) policy. It was noted that such clarifications are binding on Customs concerning ITC restrictions under the Foreign Trade Policy. However, the classification under the Customs Tariff Act falls within the Customs Authorities' jurisdiction. The judgment underscored that vessels brought in for breaking up, along with surplus fuel, should be classified under Heading 89.08 of the Import policy. As imports under this classification are free without restrictions, the Tribunal concluded that the fuel contained in vessels for breaking up cannot be confiscated under the Customs Act, and no penalties can be imposed on the appellants. The judgment allowed the appeals filed by the appellants with consequential relief, and the early hearing applications were disposed of accordingly.