2022 (8) TMI 507 - AT - Customs

Eligibility for exemption N/N. 12/2012-Cust (Sr. No. 460 or 469A) - goods imported and supplied as a B D spares of Interceptor Boats to Cost Guard, Government of India - exemption denied only on the ground that the interceptor boats manufactured and supplied by the appellant is not a warship - HELD THAT - The interceptor boat supplied by the appellant is indeed a warship. Moreover, it is undisputed that they intercepted boats used by the Coast Guard Ministry of Defence Government of India is only for security of the costal border of the country and the boats are not used for any other purpose. It is also undisputed that the said interceptor boat are equipped with arms and ammunition, therefore, it is absolutely without any doubt that the interceptor boat is a warship. From the N/N. 12/2012-Cust (Sr. No. 460 or 469A), it can be seen that the spare parts supplied for warship is clearly exempted under Notification 12/2012-Cust. Accordingly, we have no hesitation to hold that the appellant are clearly eligible for exemption Notification No. 12/2012-Cus (Sr. No. 460). In this position, we do not find it necessary to examine the eligibility of the exemption Notification No. 12/2012-Cust (Sr. No. 469A).

Summary

Issues:
1. Eligibility of exemption under Notification No. 12/2012-Cust (Sr. No. 460 or 469A).

Analysis:
1. The appellant supplied interceptor boats and spare parts to the Government of India for coastal security. The appellant claimed exemption under Notification No. 12/2012-Cus but faced a dispute with the customs authorities regarding duty exemption on the import of B&D spares. The appellant submitted relevant documents and a certificate issued by the Government of India to support the exemption claim.

2. The appellant argued that the spares supplied were in connection with the manufacture of interceptor boats, thus qualifying for the exemption. The appellant also claimed an alternative exemption under the same notification. The adjudicating authority denied the exemption, stating that interceptor boats are not warships, thus making the exemption unavailable. The appellant provided a certificate from the Coast Guard Government of India confirming the interceptor boats as warships.

3. The Revenue supported the findings of the impugned order, citing relevant judgments. The Tribunal examined whether the goods imported and supplied by the appellant as B&D spares of interceptor boats were eligible for exemption under Notification No. 12/2012-Cust (Sr. No. 460 or 469A). The adjudication authority had denied the exemption based on the interceptor boats not being classified as warships.

4. The Tribunal reviewed a letter from the Government of India confirming the interceptor boat as a warship, used solely for coastal security with arms and ammunition. The Tribunal analyzed the exemption entry under Sr. No. 460 of the notification, which covered spare parts for warships. Considering the provided documentation and the nature of the interceptor boats, the Tribunal concluded that the appellant was eligible for exemption under Notification No. 12/2012-Cus (Sr. No. 460), setting aside the impugned order and allowing the appeal.