1995 (9) TMI 137 - AT - Customs

Summary

Issues Involved:

1. Classification of the vessel as an ocean-going vessel.
2. Eligibility for duty exemption under Notification No. 262/58-Cus.
3. Applicability of the Supreme Court judgment in the case of "Maratha Transhipper."

Issue-wise Detailed Analysis:

1. Classification of the Vessel as an Ocean-going Vessel:

The Assistant Collector classified the vessel 'Maratha Deep' as an ocean-going vessel, based on substantial documentary evidence provided by the importers. The evidence included permissions, import licenses, and various certificates issued under the Merchant Shipping Act, 1958, such as the Certificate of Indian Registry, Bureau Veritas Certificate of Classification, and others. The importers argued that the term "ocean-going vessel" refers to the design and capability of the vessel to ply on the ocean, supported by certificates from marine authorities. The vessel's classification was further supported by the vessel's actual use, including its maiden voyage from Australia to India carrying coal, and subsequent international voyages.

2. Eligibility for Duty Exemption under Notification No. 262/58-Cus:

The importers contended that 'Maratha Deep' was eligible for duty exemption under Notification No. 262/58-Cus, which exempts ocean-going vessels from customs duty unless imported for breaking up. The Assistant Collector accepted this contention, noting that the vessel was not imported for breaking up and had been used predominantly for international voyages. The importers argued that the notification does not consider the end-use of the vessel, but rather its design and capability as an ocean-going vessel. The Tribunal upheld this view, citing previous judgments that emphasized the vessel's design and construction over its intended use.

3. Applicability of the Supreme Court Judgment in the Case of "Maratha Transhipper":

The department argued that the Supreme Court judgment in the case of 'Maratha Transhipper' should apply to 'Maratha Deep.' However, the Assistant Collector and the Tribunal distinguished the two cases. The Supreme Court had held that 'Maratha Transhipper' was primarily used for transhipping operations and thus classified as goods for home consumption. In contrast, 'Maratha Deep' was imported as an ocean-going vessel and had been used for international voyages. The Tribunal noted that the facts and evidence in the present case were different, and the vessel's classification as an ocean-going vessel was supported by substantial documentary evidence and actual use.

Conclusion:

The Tribunal concluded that 'Maratha Deep' was correctly classified as an ocean-going vessel and was eligible for duty exemption under Notification No. 262/58-Cus. The appeal was allowed, and the order of the Assistant Collector was upheld, while the order of the Collector (Appeals) was set aside for failing to consider the evidence and arguments presented by the importers.