1992 (3) TMI 220 - AT - Customs

Summary

Issues:
1. Interpretation of the term "ocean-going vessel" under Notification 211/83.
2. Eligibility of components imported for repair of a drill ship under the said notification.

Analysis:
The case involved an appeal by the Collector of Customs, Visakhapatnam, against an order passed by the Collector of Customs (Appeals), Madras, regarding the duty-free benefit under CN 211/83 for imported components for the repair of a drill ship named "Sagar Prabhat." The dispute arose when the Internal Audit Dept. raised concerns that the drill ship may not qualify as an ocean-going vessel under the notification. The Collector (Appeals) allowed the appeal by considering the drill ship as an ocean-going vessel, leading to the current appeal before the Tribunal.

The main contention revolved around whether the drill ship "Sagar Prabhat" qualifies as an ocean-going vessel under the Explanation of Notification 211/83. The Departmental Representative argued that the drill ship does not meet the criteria for an ocean-going vessel based on a Supreme Court decision and the absence of specific inclusion in the Explanation. In contrast, the respondents' counsel contended that the drill ship, certified by the Indian Registrar of Shipping and sailed under its own power, should be considered ocean-going, supported by the inclusive nature of the Explanation.

Upon careful consideration, the Tribunal analyzed the Explanation of the notification, which provides an inclusive definition of ocean-going vessels. The Tribunal highlighted that the Explanation extends the scope beyond listed vessel types to encompass various vessels, including tugs and dredgers, not primarily intended for ocean travel. Referring to the extensive definition, the Tribunal rejected the Department's reliance on the Supreme Court decision, emphasizing the broad interpretation of "ocean-going vessel" under the notification.

Ultimately, the Tribunal upheld the Collector (Appeals) decision, ruling that the components imported for the drill ship's repair are eligible for exemption under Notification 211/83. The Tribunal concluded that the drill ship "Sagar Prabhat" falls within the definition of an ocean-going vessel as per the inclusive Explanation, dismissing the Department's appeal.

In summary, the judgment clarified the interpretation of "ocean-going vessel" under Notification 211/83, emphasizing the expansive nature of the Explanation to include various vessel types beyond traditional ocean-going ships. The decision affirmed the eligibility of components for the drill ship's repair under the duty-free benefit, based on the inclusive definition provided in the notification's Explanation.