2019 (1) TMI 574 - AT - Customs

Import of work boat - moveable capital good or not - classification under RITC 8400 - benefit of exemption under Notification No. 27/2008- claim of duty drawback on re-export - Held that - The import of work boat which is termed as a tug boat is not disputed and therefore, Chapter 89 which is wide enough, covers ships, boats and also floating structures and without the fear of contradiction we can safely assume that the impugned goods are also covered under this Chapter - there are no reason to interfere with the findings of the lower authority on the classification and the denial of benefit of Notification No. 27/2008. The benefit available under Section 64 is a statutory one and once the importer satisfies the condition namely, that the vessels have gone back within a period of three months from the date of their importation, then such importer would be eligible for 95% of the import duty as drawback. Apparently, there is no finding or discussion in the impugned Order - this is required to be re-adjudicated by the Original Authority, who shall call for relevant details to ascertain whether the assessee satisfies the condition under Section 74(2) read with Notification No. 19/1965 and then extend the benefit if the re-export condition is satisfied. Appeal allowed in part by way of remand.

Summary

Issues:
Challenge of denial of exemption benefit under Notification No. 27/2008-Cus. and Notification No. 01/2011-CE; Classification of imported work boat for exemption eligibility; Interpretation of relevant legal provisions and notifications; Consideration of machinery/equipment classification for duty benefit; Application of Section 74 of the Customs Act for duty drawback eligibility.

Issue 1: Challenge of denial of exemption benefit under Notifications:
The appellant contested the denial of exemption benefit under Notification No. 27/2008-Cus. and Notification No. 01/2011-CE concerning the import of a work boat and related spare parts. The Commissioner rejected the claim, leading to the appeal.

Issue 2: Classification of imported work boat for exemption eligibility:
The classification of the imported work boat was crucial for determining exemption eligibility. The appellant argued that the work boat was essential for dredging operations, falling under Chapter 89, while the Commissioner's Order-in-Original denied the benefit of Notification No. 27/2008.

Issue 3: Interpretation of relevant legal provisions and notifications:
The Tribunal analyzed the legal provisions, including Section 2(22) of the Indian Customs Act, defining 'goods' to include vessels. The appellant emphasized the applicability of Section 74 for duty drawback due to re-exportation within three months.

Issue 4: Consideration of machinery/equipment classification for duty benefit:
The appellant contended that the work boat should be considered as machinery/equipment under the Customs Tariff Act, making it eligible for duty benefits. The Tribunal examined past decisions and the nature of the imported goods in this context.

Issue 5: Application of Section 74 of the Customs Act for duty drawback eligibility:
The Tribunal discussed the applicability of Section 74 for duty drawback concerning re-exportation within three months. Citing precedents, the Tribunal directed a re-computation of duty liability to consider the drawback entitlement.

In summary, the judgment involved a detailed analysis of the classification of an imported work boat for exemption eligibility, considering legal provisions, notifications, and past decisions. The Tribunal addressed the challenge of denial of exemption benefits, emphasizing the interpretation of machinery/equipment classification and the application of Section 74 for duty drawback eligibility. Ultimately, the appeal was partly allowed by remand for further adjudication on the duty drawback issue.