Customs, Excise and Gold Tribunal - Delhi
Collector Of C.E. vs Mangla Engg. Works Pvt Ltd. on 29 June, 1987
Equivalent citations: 1989(42)ELT140(TRI-DEL)
ORDER H.R. Syiem, Member (T)
1. This is an appeal by the CCE Bombay against the order in appeal No. 2341-2342/PN-166/TH-191/184 dated 26-11-1984 passed by the Collector Appeal, Bombay holding that pontoons were ocean going vessels. According to the appellant, the Collector Appeals has not analysed how pontoons can be ocean going vessels for the purpose of tax exemption under Notification No. 55/75-CE. Pontoons, says that Appellant Collector, are flat bottomed boats used as supports for temporary bridges. They are also used as ferry boats for crossing rivers.
2. In his order, the Collector Appeals noted that sailing vessels, trawlers, fishing vessels etc. have been categorised as ocean going vessels. According to him, Notification No. 82/84-CC which had some descriptions as regards ocean going vessels reinforce his conclusion that the pontoons are ocean going vessels. The character of a vessel can be determined on the basis of its capability and use.
3. However, we are not able to follow the reasoning of the order in appeal. It seems that the Collector Appeals thinks pontoons are like sailing vessels, liners, trawlers, fishing vessels. He did not realise that these are all designed and adapted for going out into the open sea. Trawling, fishing, are regularly done on the high seas. Liners are built to sail the oceans. Even sailing vessels cover the ocean and once, before the advent of the steam engine, were the only means of crossing the seas, and are still in limited use.
4. But a pontoon is not for venturing out into the sea in. It does not sail the ocean and its uses as a carrier is limited to lightering, or as a ferry boat. Often, it is no more than a barge, a flat bottomed boat, a lighter or even as a support for a temporary bridge over a river. Whatever it is used for, it is not an ocean going vessel.
5. The appealing collector is right to say that the decision to extend the exemption under Notification No. 55/75-CE to pontoons was not correct.
6. The pontoons shall be denied the exemption.
M. Santhanam, Member (J)
7. I agree with the conclusions of my Learned Brother, Shri H.R. Syiem, Member (Technical). I may also refer to the decision of the Hon'ble Supreme Court reported in 1987 (28) ELT 39 (S.C.) [Chowgule & Company (Pvt.) Ltd. and Anr. v. Union of India]. In paragraph 13 their Lordships observed:
"Of course, even in the course of topping up operafidns during the fair season, it is necessary for the transhippers to go into the open sea to reach the bulk carriers. But, these operations do not make these vessels, 'ocean going vessels', when their primary purpose and the purpose for which they were permitted to be purchased and brought to Indian territorial waters and not to serve as ocean going vessels. Therefore, it is clear from the materials that both the vessels were ordinarily ocean going vessels, but were converted as transhippers for the purpose of topping up iron ore from Yokohama in Japan and Bremen in Germany respectively to reach Marmugao. Therefore, they cannot be treated as 'ocean going vessels'.
Since the items concerned in this case are merely Pontoons applying the ratio of the Supreme Court it is clear that they cannot be considered as 'ocean going vessels'. With these observations I agree that the Appeal should be allowed.