1998 (4) TMI 280 - AT - Customs

Summary

Issues Involved:
1. Classification of the vessel.
2. Eligibility for exemption under Notification No. 133/87-Cus., dated 19-3-1987.

Summary:

Issue 1: Classification of the Vessel

In this appeal filed by M/s. Urmila & Co. Pvt. Ltd., the matter pertains to the classification of the vessel "SS Star of Gallice" described as a "Cabin Cruiser-cum-Survey Boat" in the Bill of Entry dated 31-12-1987. The vessel was registered as a "Pleasure Yacht" in the British Registry and was equipped with amenities such as air-conditioned bedrooms, bathrooms, pantry, television, music system, bar fridge, and more. The show cause notice dated 24-2-1988 alleged that the vessel was a pleasure yacht classifiable under sub-heading No. 8903.99 of the Customs Tariff and not eligible for the benefit of Notification No. 133/87-Cus. The appellants claimed assessment under sub-heading No. 8901.10 and alternatively sought classifications under sub-heading No. 8905.90 or 8906.00. The Collector of Customs, Bombay, adjudicated that the vessel was classifiable under sub-heading No. 8903.99 and not eligible for the exemption.

Issue 2: Eligibility for Exemption under Notification No. 133/87-Cus., dated 19-3-1987

The appellants argued that the vessel was imported for conducting surveys and was equipped with necessary survey instruments. However, the vessel's original registration as a pleasure yacht and its design for pleasure use were emphasized by the respondents. The Tribunal noted that the vessel's basic design and essential character as a pleasure yacht were not altered by its use for surveys. The classification under Heading No. 89.03 of the Customs Tariff, which covers yachts and other vessels for pleasure or sports, was upheld. Consequently, the vessel was not eligible for the benefit of exemption under Notification No. 133/87-Cus., as it did not fall under the specified sub-headings eligible for exemption.

Conclusion

The Tribunal concluded that the vessel was correctly classifiable as a "Pleasure Yacht" under sub-heading No. 8903.99, based on its design, registration, and features. The appeal was rejected, affirming the Collector of Customs' decision that the vessel was not eligible for the exemption under Notification No. 133/87-Cus.