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TMI Blog2015 (2) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... as a "passenger ship". If that be so, there is merit in the contention of the appellant that the correct classification of the vessel is CTH 8901 attracting 'nil' rate of customs duty at the relevant time. - though the vessel has been modified to function as a casino, the appellant has not been able to secure any licence from the Govt. of Goa for running a casino. Therefore, the vessel has not been able to function as a casino as on date. There are two contrary decisions of this Tribunal in respect of classification of a vessel used as casino. In the Waterways Shipyard case (2011 (12) TMI 127 - CESTAT, MUMBAI) relied upon by the Revenue, this Tribunal held that a passenger vessel which is used a casino merits classification under CTH 8903 as a 'pleasure vessel', while in the Ashok Khetrapal case relied upon by the appellant, a passenger vessel used as a casino was classified as a "passenger ship" falling under CTH 8901. Thus there are contrary decisions in respect of classification of the vessel. That itself will entitle the appellant to grant of stay as held by the hon'ble Madhya Pradesh High Court in the case of Pratap Steel Rolling Mills Ltd. case [1992 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e since the vessel had been insured for a sum of ₹ 87.50 crore as given in the inspection-cum-valuation report dated 3/8/2010 by M/s. Murlidhar Shenvi Surveyors Pvt. Ltd., Goa on 'as is where is' basis. Accordingly a show cause notice dated 1/6/2011 was issued proposing to reclassify the vessel under CTH 8903 99 90 as a pleasure vessel and also proposing to reject the transaction value and to adopt value of ₹ 87.50 crore and demanding duty of ₹ 24,36,36,471/- for the vessel and also on the equipment, namely, one tug (yacht) and two boats with engines along with interest thereon and also proposing penal action. The said notice was adjudicated vide the impugned order and the duty demands were confirmed along with interest and penalty imposed. Hence the appeal. 3. The ld. Counsel for the appellant made the following submissions which are summarised below:- (1) The vessel was designed and commissioned as a passenger ship in 1989 and had been used as a passenger ship for 18 years before being bought by the appellant. The memorandum of agreement, bill of sale and the purchase order clearly indicate that the appellant intended to purchase a passenger ship. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional load line certificate which shows that it is not a pleasure vessel. (6) The reliance placed by the Revenue on the decision of this Tribunal in the case of Commissioner vs. Waterways Shipyard Pvt. Ltd. [2013 (297) ELT 77] is misplaced as the facts are different. In any case, there is a contrary decision of the Tribunal in the case of Ashok Khetrapal and therefore, waiver of pre-deposit ought to be granted in the light of such contrary decisions. (7) Reliance placed on advertisements for determination of classification is contrary to the settled position in law. (8) Rejection of transaction value declared by the appellant is without any basis merely because the appellant retained the services of the previous captain of the vessel. Reliance is placed on the decision in the case of Besta Cosmetics Ltd. [2005 (183) ELT 132 (SC)]. Insurance is a matter of contract between the insurance company and the insured and therefore, the insured value cannot be taken as the basis for determination of value for customs levy purposes. Reliance is placed on the decisions in the case of Thirumalai Chemicals [1996 (86) ELT 97] and Orient Enterprises [1986 (23) ELT 507] affirmed by the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty demand is sustainable. (e) Interests of Revenue is of paramount importance and the balance of convenience in the present case is in favour of Revenue. Reliance is placed on the decision of the hon'ble A.P. High Court in the case of SQL Star International Ltd. [2012 (276) ELT 465] in support of this contention. Accordingly it is prayed that the appellant should be put to terms. 5. We have carefully considered the rival submissions. 5.1 There are two issues involved in the present appeal - one relates to classification and other relates to valuation, of the imported vessel. If the classification of the vessel as claimed by the appellant under CTH 8901 is upheld, the valuation issue will not be relevant as goods falling under CTH 8901 were exempt from duty at the relevant time. On the other hand if classification under CTH 8903 as claimed by the Revenue is upheld, the valuation issue will assume significance. 5.2 In the Provisional Class Notation Certificate issued for the vessel San Domino by the Indian Register of Shipping vide certificate dated 26-4-2011, the vessel is described as a Passenger Ship . Similarly in the Certificate dated 27-10-2011 of Indian R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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