9911796707
TMI Blog2002 (7) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Rules, 1944 with interest at 24% on the sum of Rs. 26,25,001/- consequent to show cause notice bearing No. HQPS No. 116/98, dt. 14-9-1999. 2. The brief facts of the case are as follows :- (a) The appellant, under the administrative control of Ministry of Shipping acquired a dredger, TSD Mondovi-II of 2500 Cu-M Hopper capacity from the Marmugoa Port Trust at the cost of Rs. 320.31 lakhs with interest, by a sale note dated 23-9-92. While undergoing afloat repairs, it capsized and sank in the West Basin of Hindustan Shipyard Ltd., Visakhapatnam on 26th March, 1995 and became unworthy of any further use. It was decided by the appellants to decommission and dispose of the same on As is where is and no complaint basis. M/s. Hindustan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jection for disposal of the said dredger. M/s. HSL agreed to take up the breaking operation at M/s. HSL yard and for sale of the scrap. The price agreed was Rs. 90 lakhs towards cost of the vessel. It was confirmed by M/s. HSL that customs duty at 5% and CVD at 15% on sale proceeds of the above ship breaking will be made by M/s. HSL. This offer was accepted and confirmed by the appellants. By letter dated 26-10-98 the Asstt. Commissioner (Preventive) in the office of the Commissioner of Central Excise and Customs, Visakhapatnam called upon the appellants to provide information regarding this sale of dredger Mondovi-II. He also requested for copies of the documents regarding the purchase of dredger by the appellants and copies of documents l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dredgers in question, which are cleared for breaking up after use fall under the above said Chapter sub-heading and chargeable to Central Excise Tariff Act, 1985. A dredger for breaking up is distinctly different from a new dredger and is marketable as such. Hence, the Department proposed to classify the goods under Chapter sub-heading No. 8908.00 attracting Central Excise duty at 15% ad valorem. (d) The Commissioner adjudicated the case, confirmed the demand of duty and imposed penalty. 3. We have heard both sides and considered the matter and find - (a) The dredger Mandovi-II never reached the presentation status as fit for Breaking required for classification under 89.08 of Tariff Act, 1985. In fact the appellants had all int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complaint basis . Since it was no longer found to be fit for optimal Technical performance as dredger and was a commercial decision to dispose it. The gradual technical failure to not meet desired standard of performance, was a result of its use as a dredger engaged in the process it was meant to perform. No evidence was led, by both sides, as how at the stage of its disposal by the appellants, this dredger became fit for breaking . The impugned order talks about the knowledge on part of the assessee that it was not seaworthy. However no evidence was brought forth in the order or before us, how under law or and in commercial use, a vessel not seaworthy could not be re furnished and be made seaworthy once again and it would be fit for break ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
