1986 (9) TMI 333 - AT - Customs

Summary

Issues: Classification of imported dredger under Tariff Heading No. 8905.10, applicability of Customs Notification No. 262 (Cus.) dated 11-10-1958, determination of whether the dredger qualifies as an 'ocean going vessel'.

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the appellants imported a dredger under an import license and sought duty exemption under Customs Notification No. 262 (Cus.) dated 11-10-1958. The Assistant Collector and the Appellate Collector both denied the exemption, stating that only 'ocean going vessels' were eligible, and the imported dredger did not qualify as such. The appellants argued that the dredger should be considered an ocean going vessel based on a previous appeal's decision involving similar circumstances. The classification of the dredger under Tariff Heading No. 8905.10 was a key point of contention, with the ld. SDR arguing that the dredger's navigability was subsidiary to its main function of dredging, thus not meeting the criteria of an 'ocean going vessel'. The appellants countered by asserting that the dredger's capability to navigate anywhere in the world, as evidenced by its import from Holland under its own steam, should classify it as an ocean going vessel. The ld. SDR emphasized the primary function of the dredger being dredging operations, not ocean going activities, citing a Supreme Court judgment in a similar context.

The Tribunal, after considering the arguments, referenced its earlier order which held that the Customs Notification exempted ocean going vessels without relevance to the vessel's classification under the Customs Tariff. They also cited the Supreme Court's consideration of primary function and manufacturing process for classification under the Central Excise Tariff. The Tribunal further analyzed a High Court judgment regarding the classification of dumpers as motor vehicles, emphasizing the importance of the manufacturer's description and suitability for use on roads in determining classification. The Tribunal ultimately allowed the appeal, granting the dredger the benefit of the Customs Notification as an 'ocean going vessel'.