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2018 (7) TMI 1139 - AT - CustomsClassification of Excursion Boat - Bayliner 325 SB - case of Revenue is that the boat was not one designed for ferrying/transporting passengers on scheduled trips but was the one designed for leisure or pleasure boating and the importers did not dispute the same - whether the Boat is classifiable under CTH 89011030 or under CTH 89039990? Held that - Whatever be the actual use of the said boat, it is required to classify as per the making of the vessel - it is seen that the impugned boat is not principally designed and manufactured for the purpose of transport of persons and goods, it cannot be classify under Heading 8901 - decided in favor of Revenue. The classification of the impugned boat under heading 8903 of CTH have been decided, the refund claim does not sustain on merits. The classification of the impugned boat under CTH 8903 upheld - appeal allowed - decided in favor of Revenue.
Issues: Classification of imported boat under Customs Tariff Act, 1985.
Issue 1: Classification of the boat under CTH 89011030 or CTH 89039990 The case involved the classification of an imported boat, described as an "Excursion boat of Model Bayliner 325 SB," under the Customs Tariff Act, 1985. The Department classified the boat under CTH 89039990, considering it designed for leisure or pleasure boating. The respondents contended it should be classified under CTH 89011030 as an "excursion boat" for tourist excursions. The Commissioner (A) ruled in favor of the respondents, applying an exemption under Notification No. 21/2002. The Department appealed this decision. Issue 2: Interpretation of boat classification based on design and purpose The Department argued that the boat's luxurious fittings indicated it was not intended for ferrying passengers but for leisure purposes, aligning with CTH 89039990. They emphasized that the boat's use for conducting excursions did not alter its basic design as a luxury pleasure boat. Citing precedents, they contended that the boat's design and amenities classified it under CTH 8903 for pleasure or sports vessels, not under CTH 8901 for excursion boats. The Commissioner (A) had relied on the importer being a travel agency and the boat being registered as a "Tourist boat" but failed to consider relevant facts and precedents. Issue 3: Application of Rules of Interpretation for classification The Department invoked Rules for interpretation and Classification Rule 3 to argue that the boat should be classified under Heading 8903, providing a more specific description compared to Heading 8901. They emphasized the boat's amenities and purpose as indicative of a pleasure vessel, aligning with past judgments. The respondents reiterated that the boat should be classified under CTH 89011030 for excursion boats, emphasizing the descriptions in the invoice and brochure. The Tribunal analyzed the boat's modern amenities and design, concluding that its luxury features aligned with a pleasure boat classification under CTH 8903. Issue 4: Refund claim validity and classification impact Regarding a refund claim, the respondents' advocate argued for its validity, citing precedents. However, the Tribunal, having classified the boat under CTH 8903, deemed the refund claim unsustainable. They referenced prior rulings to support the decision that the refund claim by the Clearing House Agent (CHA) was not proper, as the classification under CTH 8903 did not support the refund application. In conclusion, the Tribunal upheld the classification of the imported boat under CTH 8903, aligning with the Department's arguments and dismissing the refund claim based on the classification outcome.
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