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TMI Blog1984 (7) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... tal investment made from time to time on plant and machinery was not more than ₹ 10,00,000/-. By Notification 105/80, dated 19-6-1980, Notification 89/79 was superseded and certain modifications were made in regard to the clearances and the eligibility was fixed for the period from 1st April in any financial year as not to exceed ₹ 30,00,000/-, and for the period 19-6-1980 to 31-3-1981 as not exceeding ₹ 24,00,000/-. Another Notification that has relevance is No. 55/75, dated 1-3-1975, by which the Central Government exempted goods of the description falling under Tariff Item 68 from the whole of the duty excisable thereon. Notification 55 of 1975, which was amended by Notification 102/80, provided that ocean-going vessels falling under Tariff Item 68 were exempt from the whole of the duty of excise leviable thereon. Under Notification 104 of 1982, this Notification 55 of 1975 was superseded. Serial No. 33 in the Schedule of this, exempted ocean-going vessels from Excise Duty when cleared. The appellants submitted that the exemption granted by Notification No. 104/82 was irrespective of the exemption granted by Notifications 89/79 and 105/80. The appellants f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B)/A. No. 2106/83-B, File No. 1604/82. 5. The facts in this appeal are that the appellants submitted fresh RT-12 return for October 1981 and pointed out that the ocean-going vessels were exempt from payment of excise duty. They cleared m.v. Pratishta No. MRH 610 under Gate Pass 3 dated 24-10-1981. On 29-4-1982, the appellants received the RT-12 return from the Superintendent. Central Excise, who also called upon them to pay excise duty of ₹ 1,56,000/- on the ground that the said ocean going vessel was meant for inland navigation, known as a barge and it cannot be considered as ocean-going vessel for the purpose of exemption under Notification 55/75, as amended. 6. On 7-2-1982, the appellants cleared another vessel namely m.v. Nitya Shushil. The appellants received on 26-6-1982 the RT-12 as assessed by the Superintendent of Central Excise, directing them to pay an excise duty of ₹ 1,64,000/-, on the same ground. The appellants preferred an appeal to the Collector of Central Excise (Appeals). Appeal No. ED(SB)/A. No. 2107/83-B, File No. 1603 of 1982. 7. Here the facts are that a fresh Classification List was filed in April, 1952. consequent to Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ocean and are actually capable of travelling on the ocean. He further stated that the determination of excisability of a product should be at the point of its manufacture and a subsequent act of registration or non-registration was totally irrelevant. He submitted that the definition of sea-going vessel under the Merchant Shipping Act had no application and the requirement of the vessel actually travelling on high seas was not necessary even under the said Act. The correct test, according to him, was not registration and the provisions of the Central Excise Act or the exemption notification did not incorporate any such restriction. He argued that the test would be how the goods were understood in commercial parlance. He referred to the American Bureau of Shipping certificate disclosing that the vessels were conceived, constructed for and designed, constructed and classified as ocean-going vessles. The contract entered into between Meecon Private Ltd. and Vipul Shipyard envisaged that the vessel shall be built in compliance with the General Arrangement Plan, the specifications for Hull Machinery and electrical sections and further amendments agreed upon between the said parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssel and the point to determine this would be at the factory gate. He relied on AIR 1965 (Supreme Court) 871 holding that it was erroneous to interpret entries with respect of dictionary meanings only. He also relied on 1983 E.L.T. 1566 (Dunlop s case) and said that end use was not material unless the Tariff entry itself make a reference to such use. He relied on 1964 (15) STC, page 32 - Pashbhai Patel and Co. Pvt. Ltd. v. Collector of Sales Tax, Maharashra State. In that case the article involved was an agricultural tractor. It was held that even if it was used for agricultural purposes, it was not primarily used for agricultural purposes only. He developed an argument that the in-built words in the notification showed that the actual use in the ocean should be proved and not mere capability to use it. He relied on the Finance Minister s speech of 1980, while granting this exemption, which is as follows :- Ship building is a high priority industry and has an important part to play in promoting economic self-reliance. The Indian ship building industry is finding it difficult to face competition from foreign shipyards. I, therefore, propose to extend full exemption from excise d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shipping Act disproved the appellants case. To us this is not tenable. Registration or non-registration arises subsequent to the manufacture and will not be the sole criterion to decide their excisability. Even assuming that registration with the Merchantile Marine Department was required, we find that the concerned authorities had granted the registration under Section 406 of the Merchant Shipping Act for a single journey. We must also point out that Section 9 of the Act lays emphasis on the importance of the certificate issued by the American Bureau of Shipping. It is not disputed that the appellants vessels had, in fact, travelled from Magdalla to Marmagoa on the ocean. The Appellate Collector has disallowed the claim firstly that Section 3(41) of the Marine Shipping Act has defined sea-going in relation to a vessel and that these vessels did not conform to the definition. We do not accept this reasoning. The vessels, in question, would be sea-going vessels under the Merchant Shipping Act. because they have actually proceeded to the sea beyond the inland waters and the Mercantile Marine Department certificate produced amply proves the same. Non-registration under the Merchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, automatically entitled to claim exemption under the description of ocean-going vessels . 14. Our views in this regard are re-inforced by the Bombay Trade Notice No. 11(MF) All Other Goods (Nes) (3)/1984, dated 7-3-1984. We notice that Notification 234 of 1982, dated 1-11-82 was issued in suppression of Notification 104 of 1982. Item 32 therein is ocean-going vessel . The Trade Notice above mentioned considered the scope of the term ocean-going vessel under Notification 234/82. We reproduce below the relevant passage : It is considered that the Ocean-going vessels under the Notification No. 234/82-C.E., dated 1-11-1982 was under consideration. It is considered that the Ocean going-vessels under Notification No. 234/82-C.E. dated 1-11-1982 will include the following :- (a) Liners; cargo-vessels for various kinds including refrigerator vessels for the transport of meat, fruit etc.; vessels specified for the transport of particular goods (grain, coal, ores, etc.); tankers (petrol, wine, etc.); yachts and other sailing vessels; cable ships, ice breakers, floating factories of all kinds (for processing whales, preserving fish, etc.); whale catchers, trawler ..... X X X X Extracts X X X X X X X X Extracts X X X X
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