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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 ..... g or disembarking personnel are incidental to the transportation. Therefore, the vessels in question are rightly classifiable under Customs Tariff Heading 8901 9000 as claimed by the appellant. The vessels cannot, by any stretch of imagination, fall under CTH 8905. Consequently the benefit of exemption notification No. 12/2012-Cus is also admissible to the appellant - 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 - confiscation and redemption fine set aside - penalty set aside - appeal allowed - decided in favor of appellant. - Appeals No. C/30608/2017, C/30609/2017, C/30230/2016, C/30234/2016 - A/30053 – 30056/2019 - Dated:- 9-1-2019 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Prakash Shah, Advocate for the Appellant Assessee. Shri N. Bhanu Kiran, Asst. Commissioner/AR for the Respondent. ORDER Per: Mr. P. Venkata Subba Rao 1. All these appeals pertain to the same issue and hence are being disposed of together. Appeal No. C/30608 /2017 and C/30609/2017 have been filed by the assessee agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 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. Counsel for the appellant submits that vessels in question are meant for transporting personnel and equipment from shore to off shore platform of ONGC where the rigs are located and back and this function of the vessels is not in dispute. He draws the attention of the Bench to the two conflicting entries in the Customs Tariff Heading i.e. 8901 and 8905 which are as follows: Tariff Item Description of goods Unit Rate of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to carry passengers and goods to travel very large distances or carry persons or goods from one port to another. What is important is that they carry persons and goods as their primary function whereas the vessels falling under chapter heading 8905 have other functions such as dredging work, float cranes, fire floats etc. and their navigation is only incidental. He draws the attention of the Bench to the findings of Hon ble Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable documents that the vessels carry out this function by carrying personnel and equipment from shore to the platform and back. Such a function is essential for the off shore oil drilling platforms which are located far away from the shore. In such a factual matrix, we are unable to hold that the navigation of the vessels is not the primary function. We find that navigation indeed, is the primary function of the vessels and dynamic positioning system helps to perform this function efficiently. Similarly, loading or unloading goods or embarking or disembarking personnel are incidental to the transportation. Therefore, the vessels in question are rightly classifiable under Customs Tariff Heading 8901 9000 as claimed by the appellant. Thus, in our view, the vessels cannot, by any stretch of imagination, fall under CTH 8905. Consequently the benefit of exemption notification No. 12/2012-Cus is also admissible to the appellant. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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