2018 (11) TMI 854 - AT - Customs

Classification of imported goods - second hand Ocean Going Deck Barge named Pyaree Amma - classified under CTH 8901.1040 or under CTH 8905.9090 of Customs Tariff Act? - Held that - The capacity of the vessel has been mentioned in the International Merchant Marine Registry of Belize as gross tonnage 4691 tons and net tonnage 1407 tons. Thus it is evident that there was capacity of about 1407 tons in the vessel in question. Being a Pontoon, it has no navigability on its own. It has two cranes and a diesel genset. There are holds in deck level in the form of hoppers constructed to hold homogenous cargoes on the vessel. Thus, it is a Pontoon with some carrying capacity and also with two cranes and is not navigable on its own but can be towed. The pontoons which by definition are not navigable on their own but need to be towed fitted with lifting and handling machines such as present one are classifiable under chapter heading 8905.9090 - there is no infirmity in the impugned order classifying pontoons in question under 8905.9090 - appeal dismissed - decided against appellant.

Summary

Issues:
Classification of imported vessel under Customs Tariff Act - Whether under 8901.1040 or 8905.9090.

Analysis:
1. The case involved the classification of an imported vessel, named "Pyaree Amma," by a company engaged in mining and export of iron ore. The company claimed exemption under Notification No. 21/2002-Cus for classifying the vessel under 8901.1040, while the department sought to classify it under 8905.9090, denying the exemption. The original authority confirmed the classification under 8905.9090, leading to an appeal by the company. The main issue was whether the vessel should be classified under 8901.1040 or 8905.9090.

2. The classification under 8901 pertains to vessels for transport of persons and goods, while 8905 deals with vessels with subsidiary navigability to their main function. The vessel in question, registered as SU PONTOON, had cranes built on it. The debate centered on whether the cranes were the main function or a subsidiary facility for loading goods. The company argued the vessel was primarily for carrying goods, with cranes for loading, while the revenue contended that the cranes became the main function post-installation, leading to classification under 8905.9090.

3. The original authority and the first appellate authority examined technical details and descriptions of the vessel. The original authority highlighted the presence of cranes and storage capacity, classifying it as a floating crane under 8905.9090. The appellate authority noted incomplete cargo holds and emphasized the vessel's design for cranes. The company argued vehemently for classification under 8901, while the departmental representative supported the impugned order.

4. The detailed description of the vessel included its construction as a steel pontoon with cranes, incomplete cargo holds, and a capacity of 1407 tons. The vessel lacked navigability on its own and required towing. The tribunal referred to explanatory notes stating that pontoons with lifting or handling machines are classified under 8905.9090. Considering the factual matrix, the tribunal upheld the classification under 8905.9090, rejecting the appeal.

5. The tribunal pronounced the decision on 12.11.2018, rejecting the appeal and upholding the classification of the vessel under 8905.9090. The judgment highlighted the vessel's characteristics, the presence of cranes, and the lack of navigability, leading to the classification decision.