The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that oil contained in bunker tanks in the engine room of a vessel imported for breaking up is classifiable under CTH 8908 along with the vessel.
The bench of Somesh Arora (Judicial Member) and Raju (Technical Member) delt with the issue of the Oil in the Bunker Tanks of the Engine Room/outside the Engine Room of the vessels sent for being broken up, are to be assessed separately or as part of the vessels to be scrapped.
The tribunal ruled that the oil is to be assessed as part of the Ship.
The Appellant/assessee is engaged in the business of importation of Old and used vessels for breaking up at the Ship Breaking Yard Alang /Sosiya at their designated plot which was allotted by the Gujarat Maritime Board Bhavnagar/ Gujarat Your Appellant is a Registered Ship Breaker at Ship Breaking Yard, Alang/Sosiya, Dist, Bhavnagar. The appellant is importing various types of old and used ships for breaking on payment of the due Customs duty leviable thereupon under the provisions of the Customs Act, 1962 read with the Customs Tariff Act, 1975.
The appellant contracted to purchase one old and used vessel Viz M.V. CRASSIER on “As is where is basis” under Memorandum of Agreement dated 27.01.2020 with Seller M/S. Gauri Shipping Pvt Ltd, Shenton Way, Singapore at the purchase price of US Dollar 8517600.00. At the time of importation of the said vessel at SBY Alang anchorage, the boarding and rummaging of the said vessel has been carried out by the Customs authority of SBY Alang.
The authorised Surveyor was also appointed by the owners of the vessel, who boarded the vessel and carried out all types of survey as required and issued a Survey report mentioning all the required information.
The authorised Shipping Agent filled Import General Manifest after completion of boarding formalities declaring the import cargo as vessel Viz M.V. CRASSIER as provided under the Section 30 of the Customs Act, 1962.
After importation of the vessel Appellant submitted a Bill of Entry before the Superintendent of Customs SBY Alang which was allotted Sr. No, 6672982 dated 29.01.2020. The rummaging of the vessel was carried out by the Customs authority of SBY Alang.
The authorised Surveyor was also appointed by the owners of the vessel, who also boarded the vessel and carried out all types of survey as required and issued a Survey report mentioning all required information. The authorised Shipping Agent also filled Import General Manifest after completion of boarding formalities declaring the import cargo as vessel Viz. M.V. CRASSIER wherein also the remaining stock of Bunkers Viz Marine Gas Oil (MGO /HSD). Diesel Oil, Lubricating Oil etc along with other movable items, Store list Bunkers etc, were declared as per the Instructions contained in Circular No. 37/1996-Cus dated 03.07.1996.
These goods were not imported exclusively but such importation was as an integral part of the vessel classified under heading No. 8908 of the Customs Tariff Act, 1975 as provided under the Section 30 of the Customs Act, 1962.
The assessee contended that at the import of Bunker on board of impugned vessel was incidental part of the vessel and without it the vessel could not have reached the shore and all goods including all types of Oils were declared in the impugned bill of entry only as per the Instructions contained in Circular No. 37/1996-Cus dated, 03.07.1996. The contention was however rejected by lower authorities.
The appellant has filed an appeal before the Tribunal. It was submitted by the appellant that in the similar matters other ship breaking units of Sosiya and Alang had also filed Appeals before the Tribunal Ahmedabad involving the similar issue.
The tribunal allowed the appeal of the assessee and ruled that the oil is to be assessed as part of the Ship.
Case title: Hariyana Ship Demolition Pvt Ltd V/S Commissioner Of Custom-Jamnagar (Prev)
Citation: Customs Appeal No.10085 of 2021
Decision date: 27/08/2024
Tribunal: CESTAT Ahmedabad
