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TMI Blog2000 (8) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... to 14-6-1995 covering the period September, 1993 to June, 1995. Eleven show cause notices were answerable to the jurisdictional Assistant Collector. The allegations made were identical. It was alleged that the paint was supplied by the appellants to Goa Shipyard Ltd. who in turn had used the goods for painting the Indian Naval ships during their construction. In some of the show cause notices it was alleged that the goods were supplied to the Naval Chemical and Metallurgical Laboratory and after undertaking test they were supplied to Naval Dockyard, Vishakhapattanam where the paint was used for application on naval platforms (submarines). The 12th show cause notice (dated 4-10-1995) alleged that such goods were used for painting and maintenance of the existing ships. This notice was answerable to the Additional Commissioner of Central Excise. The show cause notice mentioned that the use as was described thereunder did not amount to that specified as the qualifying use in the subject notifications. On these grounds duties totally amounting to Rs. 32,09,933.86 were demanded in the 11 show cause notices answerable to the Assistant Collector. On similar grounds duty amounting to Rs. 6, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not satisfied. He observed that it should have been evident to the appellant that the certification of the naval authorities was not adequate and therefore they should not have made the clearance without payment of duty. On these observations he upheld the lower orders resulting in the present appeals before us. 8.One of the observations made by the Assistant Commissioner was that pontoons and platforms could not qualify for the term "ships" as the same were not self-propelled. We find from the structure of the Tariff as amplified by the HSN that the word "pontoons" is capable of being interpreted differently. Where pontoons are used to describe flatdecked vessels used for transport of persons or goods they are classifiable under heading 89.01. Where they are designed to serve as bases for floating grains etc. they merit classification under heading 89.05. Pontoons used for supporting platform fall under the description 'other floating structures'. The chapter heading is "ships, boards and floating structures". The word 'ship' has not been defined anywhere but chapter note 1 gives a very wide meaning to the term. A ship is described as a vessel of any kind employed in navigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evert to this issue. 12.The word "supplied" also came in for discussion. Two judgments of the Tribunal came to notice. In the judgment reported in 1999 (112) E.L.T. 292 (CCE v. Impreg Insulations) the Tribunal held that where polyester resins supplied to a manufacturer who made strips out of those and then supplied those strips to the Indian Navy the benefit of notification 70/77 was not admissible. The judgment cannot be applied because the goods which were supplied underwent a total change during the transit clearly removing them from the benefit of the notification. The second judgment is more relevant and that is CCE v. Moosa Haji Patrawala Pvt. Ltd., 1999 (114) E.L.T. 620. In this case certain machines were supplied by the manufacturer to another company who in turn supplied the same to the Indian Navy. The Tribunal observed that it was an admitted fact that the goods had not been supplied to the Navy but to Voltas Ltd. On this ground the benefit was denied. We are handicapped in application of this judgment since the facts as were before the lower authorities are not spelt out in the Tribunal's judgment. In the present case we have seen certain certificates issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch a situation there was no need even for certification of end use by the Navy. He draws strength from the Supreme Court judgment in the case of The State of Haryana v. Dalmia Dadri Cement Ltd., 1988 (14) ECR 292. We feel that we need not go into these arguments since we have already given our mind on the interpretation of the notification. 16.We come back to the question as to the meaning of the phrase "on board the vessel". Our presumption is that the phrase refers to a ship already in existence. It is indirectly mentioned in the Board circular referred to above. It would therefore not be possible to extend the benefit of this notification to the goods which are admittedly supplied for use in a ship under construction. 17.Now we come to the quantifications. The benefit of the exemption notification would accrue to paint used on the ships already in existence. The duty quantifiable on such goods would come to Rs. 10,02,156.56. Consequentially the inadmissible benefit would amount to Rs. 28,48,318.30. 18.Substantial arguments were advanced on the sustainability of this portion of the duty short levied. Shri Bhatt urged that the appellants were justified in clearing the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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