Custom, Excise & Service Tax Tribunal
Drishti Adventures Pvt. Ltd vs Commissioner Of Customs (I), Mumbai on 4 November, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/1523/05-Mum (Arising out of Order-in-Appeal No. 376/2005 NCH/JC/UB/05 dated 12.9.2005 passed by Commissioner of Customs (Appeals), Mumbai-I) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. Raju, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Drishti Adventures Pvt. Ltd. Appellant Vs. Commissioner of Customs (I), Mumbai Respondent Appearance: Shri Neerav Mainkar, Advocate, for appellant Shri Ahibaran, Additional Commissioner (AR), for respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical) Date of Hearing: 25.10.2016 Date of Decision: 4.11.2016 ORDER NO Per: M.V. Ravindran
This appeal is directed against order-in-appeal No. 376/2005 NCH/JC/UB/05 dated 12.9.2005.
2. The relevant facts of the case are that the appellant filed bill of entry No.542252 dated 15.2.2005 for clearance of imported boats declared as excursion boats. Appellant was claiming classification of the goods under heading 89011030 read with the benefit of Notification 21/2002-Cus. (serial No.352). As per page 42 of the catalogue, the goods were described as There is no better value than the Regal 1800. As a first boat, family boat, an all round sport boat, this is value in its purest form. As per appellant though the manufacturer termed these boats as sport boats, actually they are meant for ferrying persons from one station to another station in Goa, hence they are to be classified under heading 89011030. As per the adjudicating authority, the goods are correctly classified under heading 89039200, as the same has been marked as sports boat. As per the adjudicating authority, ships and boats meant for transport of persons or goods are classifiable under heading 8901, whereas vessels and boats designed principally for pleasure or sports are classifiable under heading 8903. As per the adjudicating authority, the imported boats are commercially and functionally known as sports boats only. He has also relied on Tribunals decision in the case of Good Year India Ltd. vs. CCE 2003 (157) ELT 560, Urmila & Co. Pvt. Ltd. vs. CC 1998 (104) ELT 97 and the Honble Supreme Courts decision in the case of GS Auto International Ltd. vs. CCE 2003 (152) ELT 3 (SC). As per the decision in Urmila & Co., it is the basic design of the vessel that determines its classification and pleasure boat will not cease to be pleasure boat when it is used for survey purpose. As per the said decision of the Honble Supreme Court, the goods are to be classified as to how they are referred in the market by those who deal with them, hence the goods have been classified under heading 89039200. Aggrieved by such an order of the adjudicating authority, an appeal was filed before the first appellate authority. The first appellate authority also agreed with the findings recorded by the adjudicating authority and rejected the appeal.
3. Learned counsel for the appellant would take us through the entire documents and the appeal memoranda. It is his submission that the appellant had sought permission from the Captain of Ports, Government of Goa, Panaji, for providing to ferry and excursion, for tourists in Goa with the imported boats. He would draw our attention to the permission and NOC granted by the said Government authority and more specifically to the diagram which was produced as to the area of operation of ferrying and excursion of the appellants boats. Subsequently, he would draw our attention to the competing entries of Chapter 89. He would submit that the appellant had claimed the classification of the boats under Chapter heading 8901 which includes excursion boats, ferry boats of all kinds. It is his submission that the said boats which are imported by the appellant, would be covered under heading 8901 as it is not disputed that the said boats are used for ferrying of passengers and for excursion purposes. While submitting that the chapter heading 8901 covers boats imported, he states that Revenue has sought classification of the boards under chapter heading 8903 which is incorrect as in the said heading, only the vessels which are used for pleasure or sports are included. He would submit that the lower authorities have erred in coming to such a conclusion. He would then draw our attention to the meaning of the words pleasure vessels as per the Maritime & Coastguard Agency Marine Guidance Note of United Kingdom, and submit that the said pleasure vessels are used for sport or recreational purposes and do not operate for financial gain, hence the classification sought by the department under heading 8903 is incorrect. He would draw our attention to the decision of the Tribunal in the case of Ashok Khetrapal vs. CC, Jamnagar 2014 (304) ELT 408, for the proposition that what would get exempt under heading 8903, wherein the Tribunal has held definition of pleasure vessel should be meant for personal consumption, use of the person or owner of the vessel. He would also submit that the Boards circular No. 1/2005-Cus. dated 11.1.2005 which discusses about the classification of pontoon and accommodation barge, would submit that this accommodation barge in pontoon are similarly replaced vessels and hence the boats imported by the appellant would merit classification under heading 8901. He would rely on the decision of the Tribunal in the case of Chowgule & Co. Ltd. vs. CC, Vishakhapatnam 1995 (80) ELT 680, to submit that the correct classification of vessel needs to be done based upon the usage it is put to.
4. Learned departmental representative, on the other hand, would submit that the correct classification of the boats which are imported by the appellant, is under heading 8903, as the catalogue of the manufacturer indicates that these boats are motor boats. To support his submission, learned departmental representative draws our attention to the findings recorded by the adjudicating authority in order-in-original at internal pages 5 and 6 and submits that these boats which are imported by the appellant, are specially manufactured only for pleasure and sports and they are neither intended nor equipped for any other purpose than sports or pleasure. He would draw our attention to chapter heading 8903 and submit that at heading 89039200, the tariff has specifically classified motor boats other than outboard motor boats. He would submit that the boats imported by the appellant fall under specifically covered for tariff entry, hence they cannot be classified under heading 8901. For this proposition, he relies upon the decision of the Honble Supreme Court in the case of GS Auto International Ltd. vs. CCE, Chandigarh 2003 (152) ELT 3 (SC). He would also submit that similar view has been expressed by the Bench in the case of CCE, Goa vs. Waterways Shipyard Pvt. Ltd. 2013 (297) ELT 77, as to classification of vessel which is used as a floating casino.
5. We have considered the submissions made at length by both sides and perused the records.
6. In the case in hand, the dispute is whether the boats imported by the appellant would be covered under chapter heading 8901 or 8903 of the Customs Tariff Act.
7. We have considered the competing entries and find that the said chapter headings are as under:-
It can be seen from the above reproduced headings, it is the appellants claim that boats fall in the category of heading 8901 as excursion boats, ferry boats by virtue of the various applications made by them to the Government of Goa for granting them permission for ferrying the passengers and tourists between two places in the river. We find that the claim of the appellant is unacceptable as the declaration of conformity filed by the manufacturer of the boats before the authorities in United States indicates that the boats which are imported by the appellant, are recreational craft. This particular declaration is annexed at page 24 of the appeal memoranda. The said declaration of conformity also states that the craft is powerboat. In addition to that, we find that the certificate of registration as issued by the Port officer, Government of Goa, specifically registered these boats as motor boats mars, mercury etc. and relies upon the declaration filed by the manufacturer i.e. Regal Marine Industries, Florida, though the description of the boat has been stated as excursion boats. We find that the adjudicating authority in order-in-original has reproduced the photographs of the boats which are imported. On casual perusal of the said reproduction of the photographs, we find that the boats which are imported by the appellant would merit classification only under heading 8903 as motor boats, other than outboard motor boats which is a specific entry indicated in the Customs Tariff Act.
8. Again, we find that the HSN Explanatory Notes to chapter 8901 specifically excludes the vessels of heading 8903. It would mean that heading 8901 would exclude vessels which are specifically listed in the said heading of 8903. In 8903, motor boat is mentioned as specific vessel under specific heading. In view of this, we have to hold that the impugned order is correct.
9. As regards the reliance placed by the learned counsel on the various decisions, it has to be noted that those decisions are specifically in respect of the vessels which were imported and were classified under heading 8901 based upon the facts and circumstances of those cases. The reliance placed on Boards circular dated 11.1.2005 will also not carry the case of the appellant any further, as that clarification is in respect of pontoon and barges and not in respect of any motor boats.
10. In view of the foregoing, we hold that the impugned order is correct and legal and does not suffer from any infirmity. The appeal is rejected.
(Pronounced in Court on 4.11.2016) (Raju) Member (Technical) (M.V. Ravindran) Member (Judicial) tvu 1 9 C/1523/05