2015 (9) TMI 1366 - AT - Customs

Classification - Whether the fuel oil containing in the engine room tanks is classifiable under heading No. 27.10 or the Vessels under heading as 89.08 of the Customs Tariff Act - Held that - Gujarat High Court in the recent decision in the case of Priya Holding P Ltd (2012 (11) TMI 532 - Gujarat High Court) held that once the fuel oil contained in the bunker i.e., engine room tanks, falls within the ambit of sub para (b), as a natural corollary the same would be classifiable along with the vessel under 89.08 of the Heading No. 89.07 of the Customs Tariff Act. - impugned order cannot be sustained - Decided in favour of assessee.

Summary

Issues involved: Classification of fuel oil in engine room tanks under Customs Tariff Act

Analysis:
1. Common Issue and Disposal: The judgment addresses the common issue of the classification of fuel oil in engine room tanks under the Customs Tariff Act. The appeals were taken up together for disposal after hearing both sides and perusing the records.

2. Classification Dispute: The core issue in this case revolves around whether the fuel oil contained in the engine room tanks should be classified under heading No. 27.10 or under the category of Vessels under heading 89.08 of the Customs Tariff Act.

3. Legal Precedents: The judgment references prior decisions by the Hon'ble Gujarat High Court in cases such as Priya Holding P Ltd vs CC(P) and CC vs J M Industries. These cases dealt with the classification of bunkers containing oil as part of the vessel's machinery under Entry No. 89.08 of the Customs Tariff Act.

4. Gujarat High Court Decision: The judgment highlights the Gujarat High Court's ruling in Priya Holding P Ltd's case, emphasizing that fuel oil contained in the bunkers (engine room tanks) falls under heading 89.08 of the Customs Tariff Act. This decision is based on the integral connection between the fuel and oil in the engine room tanks with the vessel's machinery and engines.

5. Revenue's Argument: The Authorized Representative for the Revenue relied on a previous Tribunal decision and a High Court judgment in Priya Blue Industries Ltd's case. However, the recent decision of the Hon'ble Gujarat High Court in Priya Holding P Ltd's case favored the classification of fuel oil along with the vessel under heading 89.08.

6. Judgment and Disposition: Considering the Gujarat High Court's recent decision, the Tribunal found that the impugned order could not be sustained. Consequently, the impugned orders were set aside, and all the appeals filed by the appellants were allowed, indicating a favorable outcome for the appellants based on the classification of fuel oil in the engine room tanks under the Customs Tariff Act.