Customs, Excise and Gold Tribunal - Mumbai
Besix Dabhol S.A. vs Commissioner Of Customs on 10 June, 2004
Equivalent citations: 2004(170)ELT539(TRI-MUMBAI)
ORDER Jyoti Balasundaram, Member (J)
1. The appellants herein imported the following vessels for carrying out the work of construction of Breakwater and LNG Jetty for setting up LNG facility for the Dabhol Power Project for which they have been awarded a contract: (1) 3 Nos. of Zodiac Semi-Rigid Pro II 500 inflatable boats; (2) One Fibreglass Boat - Dolphin Deluxe 3100; and (3) Two sets of Fibreglass Boats Hoor 127 (non-inflatable) under three bills of entries, all dated 29/10/1999, for a total CIF value of Rs. 29,75,797 and claimed clearance under para 5.7 of the Exim Policy 1997-2002 and assessment under Chapter heading 8901.90 of the CTA, 1975 which covers vessels for the transport of goods and other vessels for the transport of both persons and goods, other than cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods. In the alternate they claimed assessment of the goods under Chapter heading 89.03. Heading 89.03 and 8903.99 are set out below:
89.03 Yachts and other vessels for pleasureor sports;
rowing boats and canoes;
8903.99 - Other
2. The show cause notice dated 19/11/1999 was issued alleging that the boats fall for classification as "other/outboard motor boats" under CTH 8903.99 and are covered under Exim code Nos. 890399.01.90 import of which was restricted and required a licence for valid import or import could be allowed in accordance with a Public Notice issued in this behalf and since the importers had not produced any such licence nor there was any Public Notice covering the goods in question, they were liable to confiscation under Section 111(d) and (o) and the importers liable to penalty under Section 112 of the Customs Act. Commissioner held that the boats fell for classification under the heading proposed in the show cause notice and fell under Exim Code 890399.01.90 and confiscated the boats with option to redeem the same on payment of fine of Rs. 29,75,000/- and payment of appropriate duty and also imposed a penalty of Rs. 3 lakhs on the importers. Hence this appeal.
3. We have heard both sides.
4. The appellants do not challenge the classification under heading 8903.99 of the Schedule to the CTA, 1975 and are only aggrieved by the ITC classification, as according to them the inflatable boat? is covered by ITC HS 890310.00.10 as it is of a kind used for sports and that fibreglass boats fall under ITC HS 890399.09.10 as they are of a kind used for sports and hence contend that they are feely importable. We note that it has been accepted by the adjudicating authority that the boats are meant for pleasure activities such as river rafting and water skiing as claimed by the importers. However, he has held that the import appears to be for purpose other than sports because they were to be used for facilitating speedy and effective control by the importers, who are specialised marine work contractors, for work related activities. In other words he has gone by the end use of the boats for holding the goods liable to confiscation. In the light of the above, applying the ratio of the Tribunal's decision in the case of Urmil & Co. Pvt. Ltd. v. CC, Bombay 1998 (104) ELT 97 wherein the Tribunal has held that pleasure boat do not ceased to be a pleasure boat even when it is used for survey purpose and in the light of the Tribunal's order in the case of Uday Traders v. CC, Nhava Sheva 1996 (82) ELT 506 interpreting the expression "of a kind used in" occurring in Notification 28/90-Cus dated 20/03/1990 holding that the expression "of a kind" widens the scope of the term "used in" and that the condition of end use is not built into the notification, we accept the importers' claim that the goods are freely importable, set aside the confiscation and penalty, and allow the appeal.
(Operative part pronounced in the Court)