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TMI Blog2019 (1) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Customs, classifying the vessels which they imported under the Customs Tariff Heading 8905 90 90and denying the benefit of exemption notification. They also challenged the confiscation of the vessels imported by them under section 111(m) and imposition of penalties under section 112 (a) and 114AA of the Customs Act, 1962. The Department's appeals No. C/30230/2016 and C/30234/2016 are against the impugned orders on the ground that the Commissioner has imposed a meagre amounts of redemption fine under section 112 (a) which is less than 1% of the value of the vessels and this needs to be enhanced. 2. Heard both sides and perused the records. The facts of the case in brief are that assessee imported vessels "Lewek Altair" and "Lewek Atl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties under sections 112(a) and 114AA. Show cause notices were issued to the appellant and after following due process, Ld. Commissioner vide the impugned orders classified the vessels under CTH 8905 9090 and denied the benefit of exemption notification No. 12/2012-Cus. He accordingly ordered finalisation of the provisional assessment as above and demanded duty along with applicable rate of interest. He further confiscated the goods under section 111(m) as the entry of classification in the Bill of Entry filed by the appellant is not reflecting the correct classification. He allowed redemption of the vessels on payment of redemption fine and imposed penalties under Section 112 (a) and 114 AA. Hence these appeals by the assessee. 3. Ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 8905 10 00 Dredgers u 10% - 8905 20 00 Floating or submersible drilling or production platforms u 10% - 8905 90 Other : 8905 90 10 Floating docks u 10% - 8905 90 90 Other u 10% - 4. He would argue that the primary function of the vessels being to carry persons and equipments, they cannot be classified under 8905 but have to be classified under Chapter Heading 8901 9000. Chapter Heading 8905 basically covers such vessels whose function is not navigation but is some other function and navigability is only a subsidiary function, whereas Chapter Heading 8901 covers such vessels which are primarily meant for transport of persons and goods. It is not necessary for the vessels falling under 8901 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the primary function of the vessels and they are classified under Tariff 8901 9000 and not under 8905 as held by Ld. Commissioner. 6. Ld. DR, on the other hand, would argue that the vessels in question are not ordinary boats meant for transport of goods or persons but for platform support vessels whose primary function is to support the platform of oil rig in the high sea. On a specific query from the Bench as to how the platform is supported by vessels in question, Ld. DR would say that by the dynamic positioning system at the platform and by carrying personnel and goods within the shore and the platform. He further argue that the vessels in question are incapable of carrying personnel and equipment to different Ports or over l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The demand of duty under CTH 8905 9090 denying the benefit of exemption notification No. 12/2012-Cus, dt. 17.03.2012 by Ld. Commissioner needs to be set aside and we do so. Consequently, no interest is also payable on such demand. We find that confiscation of vessels under section 111(m) was only on the ground that the bill of entry claimed under Customs Tariff Heading which, according to the Commissioner, was incorrect. It was therefore held that in the entry made under Customs Act viz; Bill of Entry, the Customs Tariff Heading was not correct and therefore the goods are liable to be confiscated under section 111 (m). As we have held that the goods in question are classifiable as claimed by the appellant, under CTH 8901 9000, this allegat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any material particular, in the transaction of any business for the purpose of the Customs Act. Ld. Commissioner held "considering the facts of the case, it has to be held that on the ground of wilful misstatement regarding classification and availing of notification, I am constrained to hold that the importer is liable for penalty under section 114AA of the Customs Act, 1962." Thus holding, he imposed a penalty of Rs. 1.00 Crore on the appellant in each of the impugned orders. In our considered view, claiming an incorrect classification or the benefit of an ineligible exemption notification does not amount to making a false or incorrect statement because it is not an incorrect description of the goods or their value but only a claim ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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