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2022 (12) TMI 100 - AT - CustomsClassification of imported goods - Oil contained in the Bunker Tanks in the Engine Room/Outside Engine Room of Vessel imported for breaking up - to be assessed independently of the vessel under CTH 2710 or with the Vessel imported for breaking up under CTH 8908 00 00? - HELD THAT - The issue as regards Bunker Tanks in the Engine Room stands decided in the decisions of the Hon ble Gujarat High Court in PRIYA HOLDING (P) LTD VERSUS COMMISSIONER OF CUSTOMS, PREVENTIVE 2012 (11) TMI 532 - GUJARAT HIGH COURT and COMMISSIONER OF CUSTOMS VERSUS JM. INDUSTRIES 2014 (10) TMI 227 - GUJARAT HIGH COURT , in which it is held that such oil cannot be classified under CTH 2710 and has to be classified along with the vessel imported for breaking up under CTH 8908 - The Hon ble Gujarat High Court has in the said decisions held that Oil contained in the Bunker tanks in Engine Room of Vessel imported for breaking up, are associated and connected with the machinery and engine of the Ship and are regarded as forming integral part of the Vessel and therefore classifiable along with the Vessel under CTH 8900 and cannot be assessed to duty independently of the vessel under CTH 27.10. Thus, the impugned Orders holding that Oil inside the Bunker Tanks in engine rooms are to be assessed to duty under CTH 27.10 are liable to be set aside and Oil contained in Bunker Tanks in Engine Room of Vessel imported for breaking up is classifiable under CTH 8908 along with such vessel. As regards, the Oil contained in Bunker Tanks outside the engine room of vessel, despite duty was paid under protest, there is, however, no speaking order passed as regards the same. It can be seen that if the tanks containing Oils are connected with pipeline with the engine or machinery of the vessel, there may be no reason why the same cannot be treated as integral part of the engine or machinery of the vessel. However, since there is no speaking order on that part of issue, we direct the adjudicating authority to pass speaking order in respect of duty pertaining to Oil contained in Bunker Tanks outside the engine room of vessel. Appeal allowed.
Issues:
Classification of Oil contained in Bunker Tanks in the Engine Room/Outside Engine Room of Vessel imported for breaking up under CTH 2710 or CTH 8908 00 00. Analysis: 1. The Appeals involved the classification of Oil in Bunker Tanks in Vessels imported for breaking up under CTH 2710 or CTH 8908 00 00. The Appellant argued that the Oil should be classified along with the Vessel under CTH 8908 00 00 based on previous court judgments. 2. The Assistant Commissioner initially classified the Oil under CTH 2710 based on a circular. The Commissioner (Appeals) upheld this classification, leading to the appeal before the Tribunal. The Appellant cited previous court decisions to support their stance that the Oil is integral to the Vessel and should be classified under CTH 8908 00 00. 3. The Tribunal reviewed the Gujarat High Court decisions and previous Tribunal judgments, which held that Oil in Bunker Tanks of Vessels imported for breaking up should be classified under CTH 8908 00 00 along with the Vessel. The Tribunal emphasized that the department's non-acceptance of these judgments due to monetary limits does not negate their applicability. 4. The Tribunal disregarded the reliance on a CBIC Circular in favor of court decisions, citing Supreme Court precedents that circulars cannot override court rulings. Consequently, the Tribunal set aside the Orders classifying Oil in Bunker Tanks inside the Engine Room under CTH 2710, directing reclassification under CTH 8908 00 00. 5. Regarding Oil in Bunker Tanks outside the Engine Room, the Tribunal noted the lack of a speaking order. While indicating potential integration with the Vessel's machinery, a specific decision was deemed necessary. The Tribunal directed the adjudicating authority to issue a speaking order on the classification of Oil in Bunker Tanks outside the Engine Room. 6. Ultimately, the Tribunal found the impugned Orders unsustainable and allowed the appeals, setting aside the classification under CTH 2710 and directing reclassification under CTH 8908 00 00 for Oil in Bunker Tanks inside the Engine Room. The Tribunal's decision was pronounced on 01.12.2022.
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