2001 (9) TMI 187 - AT - Customs

Summary

Issues Involved:
1. Applicability of the Accessories (Condition) Rules, 1963 and Notification No. 133/87-Cus to the spares and accessories imported along with a Cutter Suction Dredger.
2. Interpretation of the term "alongwith" in the context of the Accessories (Condition) Rules, 1963.
3. Classification of various accessories and spares as part of the Cutter Suction Dredger for customs duty purposes.

Detailed Analysis:

1. Applicability of the Accessories (Condition) Rules, 1963 and Notification No. 133/87-Cus:
The appellant firm, a Government of India Undertaking, imported a Cutter Suction Dredger along with necessary accessories and spares from a Dutch firm. They filed three Bills of Entry for the import, which were assessed provisionally. The Customs Authorities doubted whether the spares were eligible for assessment at the rate applicable to the dredger under the Accessories (Condition) Rules, 1963 read with Notification No. 133/87-Cus. During adjudication, the appellants argued that the spares should be assessed at the same rate as the dredger and sought a refund of the extra duty paid. However, the adjudicating authority and the Commissioner (Appeals) denied this benefit, leading to the present appeal.

2. Interpretation of the term "alongwith":
The appellants contended that the term "alongwith" in the Accessories (Condition) Rules, 1963 should not be interpreted narrowly as "together with." They argued that the accessories and spares imported through different vessels were integral to the Cutter Suction Dredger and should be assessed at the same rate as the dredger. The Commissioner of Customs (Appeals) had erroneously interpreted "alongwith" to mean only those items brought together with the main article. The appellants maintained that the accessories were compulsorily supplied with the dredger and included in its price, fulfilling the conditions of the Accessories (Condition) Rules, 1963.

3. Classification of various accessories and spares:
The appellants listed several accessories required for the operation of the Cutter Suction Dredger, such as floating pipelines, pontoons, and anchor handling equipment. They argued that these accessories were essential for the dredger's operation and should be classified under the same heading as the dredger, making them eligible for the exemption under Notification No. 133/87-Cus. The Tribunal had previously ruled in favor of such classification in a similar case involving M/s. Boskalis Dredging (India) Pvt. Ltd., which was also upheld by the Supreme Court.

Tribunal's Decision:
The Tribunal agreed with the appellants, citing its earlier decision in the Boskalis Dredging case, which held that discharge pipes and other accessories are essential parts of a Cutter Suction Dredger. The Tribunal reproduced relevant paragraphs from the previous order, emphasizing that the pipelines and other accessories are indispensable for the dredger's operation. The Tribunal concluded that the accessories should be classified under the same heading as the dredger and are entitled to the exemption under Notification No. 133/87-Cus. The appeal was allowed, and the impugned order was set aside, granting consequential reliefs to the appellants.