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2017 (2) TMI 524 - HC - CustomsWhether in the facts and circumstances of the case M/s. Khanbhai Esoofbhai in whose hands the vessel was actually broken up is liable to pay customs duty that became leviable in accordance with proviso to N/N. 163/65Cus dated 16.10.1965, or otherwise? Held that - no question of law is framed with respect to levy of additional customs duty on ships and vessels and rightly not raised as no such question was raised before the learned CESTAT. Therefore, now it is not open for the assessee to raise the question with respect to levy of additional customs duty on ships and vessels which was never raised earlier. Earlier before the learned CESTAT the respondent assessee heavily relied upon the decision in the case of Shree Dev Krupa Ship Breaking 2013 (6) TMI 370 - GUJARAT HIGH COURT . Even the Division Bench of this Court also earlier dismissed the present Tax Appeal considering the decision of this Court in the case of Shree Dev Krupa Ship Breaking. The Hon ble Supreme Court reversed the decision of this Court in the case of Shree Dev Krupa Ship Breaking and also set aside the order passed by this Court in the present Tax Appeal. While remanding the matters / appeals to this Court, the Hon ble Supreme Court also framed the aforesaid questions of law and remanded the matter to this Court to consider the aforesaid questions of law only - Now, by a detailed judgment and order dated 26.07.2012 in Tax Appeal No.537/2004, the Division Bench of this Court has answered all the questions of law raised in the present Tax Appeal in favour of the Revenue and against the assessee and has quashed and set aside the order passed by the learned CESTAT in the case of Shree Dev Krupa Ship Breaking. Appeal allowed - decided against assessee.
Issues:
1. Interpretation of customs duty liability on ship breaking. 2. Applicability of legal provisions regarding vessel importation. 3. Exemption from central excise duty for ship breaking. 4. Validity of additional customs duty on ships and vessels. 5. Exemption of customs duty on imported parts for ship construction. Analysis: 1. The case involved a dispute over the liability of customs duty on ship breaking. The appellant challenged the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) which dismissed the appeal based on previous judgments. The key question was whether the party responsible for breaking the vessel was liable to pay customs duty as per Notification No.163/65Cus. 2. The Division Bench of the High Court considered the interpretation of legal provisions related to vessel importation. The Supreme Court intervened in a similar case, setting aside previous orders and remanding the matter. The questions framed included whether the ship breaking party qualified as an importer, the date relevant for vessel breaking, and the applicable duty rates. 3. The issue of exemption from central excise duty for vessels undergoing breaking was raised. Reference was made to a Karnataka High Court judgment linking additional customs duty to central excise duty rates. The argument was made that if additional customs duty was exempt, a significant portion of the duty demand would be eliminated. 4. The validity of additional customs duty on ships and vessels under a specific heading was contested. Citing a previous judgment by the High Court, it was argued that the duty was not leviable as it exceeded the authority granted by the Customs Tariff Act. This challenge aimed to reduce the overall duty demand. 5. Lastly, the exemption of customs duty on imported parts used in ship construction was highlighted. The argument was based on a government exemption for shipyard materials and parts. The appellant sought to reduce the duty demand by claiming this exemption. In conclusion, the High Court, based on a detailed judgment, upheld the appeal in favor of the Revenue, answering all raised questions in their favor and against the assessee. The decision aligned with previous rulings and interpretations of customs duty liability, vessel importation, and duty exemptions, ultimately resolving the legal disputes presented in the case.
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