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TMI Blog2012 (11) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... referred circular No . 37/96-Cus dated 03.07.1996 and once the fuel and oil contained in the bunkers, that is, engine room tanks, fall within the ambit of sub- para (b), as a natural corollary the same would be classifiable along with the vessel under Heading No.89.08 - in favour of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Tribunal, in the impugned order, held that the Board's Circular No. 37/96-Cus dated 03.07.1996 had been issued after consulting World Customs Organization, Brussels. The circular also mentions that fuel and oil contained in the vessels machinery and engines can only be regarded as forming integral part of the vessel and to be classifiable along with the vessel under heading No. 89.09; that the circular, further provides that the remaining fuel and oil has to be classified separately in their own appropriate heading. The Tribunal, found force in the submissions of the learned counsel for the respondent that the engine room tank is to be considered as containing fuel and oil in the vessel's machinery and engine. The Tribunal, however, held that the fuel and oil contained in the other tank will fall within the category of "remaining fuel and oil" which is covered by para 2(d) of the Circular and held that the fuel and oil in engine room tanks will be classified with the ships under Heading 89.08 and fuel and oil in other tanks will be classifiable in their own headings and duty will be charged accordingly. Being aggrieved, the revenue filed a reference application before this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng classification of ( i ) moveable gears such as lifting and handling machinery, anchors, navigational equipments, machine tools, fire fighting equipment (ii) bunkers, such as fuel and oil, engine oil and (iii) ship stores, such as spare parts, food stuffs, alcoholic and other beverages imported on Board a ship for breaking-up [Para No. 1.01 of the report of the Comptroller & Auditor General of India for the year ended 31st March, 1991 (4 of 1992)]. While Department was of the view that the articles are classifiable under Heading 89.08 of the Customs tariff covering vessel and other floating structures for breaking up. Audit was of the view that these items are not covered by this heading and needs to be classified separately in their respective headings. 2. The issue was referred to World Customs Organization, Brussels, who has opined that: (a) Moveable gears such as lifting and handling machinery, anchors, navigational equipment, machine tools, fire fighting equipment from part of vessel's normal equipment and hence classified under Heading No.89.08. (b) Fuel and Oil contained in the vessel's machinery and engines can also be regarded as forming integral part of the vessel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) the fuel and oil contained in the vessel's machinery and engines can also be regarded as forming integral part of the vessel and classified under Heading No.89.09; whereas as per sub- para (d) the remaining fuel and oil [other than that mentioned in sub- para (b)] and other ship stores, including drinks and food stuff are classifiable separately in their own appropriate headings. 11. The crucial question, therefore, is whether the fuel and oil contained in the engine tanks would fall within sub- para (b) or sub- para (d) of paragraph 2 of the circular. 12. As can be seen from the impugned order, the Tribunal, after appreciating the evidence on record, has come to the conclusion that the fuel contained in the engine tanks would form an integral part of the vessel's machinery and engine, and therefore, would fall under sub- para (b) whereas the remaining fuel and oil contained in other tanks would fall within the ambit of sub- para (d) and would be classifiable under their own separate headings. 13. As noted earlier, before the Tribunal, the learned counsel had placed reliance upon the Book titled "Ship Design and Construction" for demonstrating that fuel and oil contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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