M/S Hatimi Steels vs Commissioner Of Customs

[ Arising out of OIA-46,47,48,49/JMN/2007 dtd 30/03/2007 Passed by Commissioner of CUSTOMS-JAMNAGAR(Appeals) ]

M/s Hatimi Steels - Appellant(s)

Vs

Commissioner of CUSTOMS-

JAMNAGAR(A) - Respondent (s)

Represented by :

For Assessee : Shri N K Oza, Advocate For Revenue : Shri L Patra, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

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Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

Date of Hearing / Decision : 30/6/2015

ORDER No. A/10984-10987/2015 dtd 30/6/2015

Per : Mr.P.K. Das,

Common issue is involved in these appeals and therefore, all are taken-up together for disposal.

2. After hearing both the sides and on perusal of records, we find that the appellants imported Vessels for breaking purpose on the basis of agreement. The appellants filed Bills of Entry, which were provisionally assessed. The issue involved in this case is whether the fuel oil containing in the engine room tanks is classifiable under heading No. 27.10 or the Vessels under heading as 89.08 of the Customs Tariff Act.

3. We find that the issue is no more res integra in view of the decision of the Honble Gujarat High Court in the case of Priya Holding P Ltd vs CC(P)  [2013(288)ELT.347(Guj)] and in the case of CC vs J M Industries  [2014(302)ELT.82(Guj.)]. The question before the Honble High Court is whether the bunkers containing oil were to be treated as part of the vessels machinery so as to attract Entry No 89.08 of the Schedule to the Customs Tariff Act 1985.The relevant portions of the decision of the Honble Gujarat High Court in the case of Priya Holding P Ltd (supra) are as under :

 13.?As noted earlier, before the Tribunal, the learned counsel had placed reliance upon the Book titled Ship Design and Construction for demonstrating that fuel and oil contained in the engine department tanks is always associated and connected with the machinery and engine of the ship which forms an integral part of the vessel. The learned counsel had also submitted that as per the definition of LDT of ship, oil stored in other tanks on the ship are not included in the LDT, however, oil in engine room tanks is included in the LDT and it, therefore, forms part of the vessel and is classifiable along with the ship under Heading No. 89.08. Based upon the aforesaid evidence led before it, the Tribunal has, accordingly, come to the conclusion that the fuel and oil contained in the bunkers, that is, engine room tanks of the vessel form an integral part of the vessel, and therefore, would be classifiable under Heading 89.09; whereas the fuel contained in the other tanks would be classifiable under their own headings. It may also be recalled that as per the commentary in the Book titled Ship Design and Construction the fuel contained in the engine tanks are associated and connected with the machinery and engine of the ship, and such oil is called fuel and oil contained in the vessels machinery and engines and is regarded as forming integral part of the engine. If the fuel and oil contained in the engine tanks is considered to be fuel and oil contained in the vessels machinery and engines, the same would directly fall within the ambit of sub-para (b) of paragraph 2 of the above referred Circular No. 37/96-Cus. Once the fuel and oil contained in the bunkers, that is, engine room tanks, fall within the ambit of sub-para (b), as a natural corollary the same would be classifiable along with the vessel under Heading No. 89.08.

4. The Learned Authorised Representative for the Revenue relied upon the decision of the Tribunal, in the case of Priya Blue Industries Ltd vs CCE&C (A) [2006(200)ELT.506(Tri Mumbai)] which was upheld by Honble High Court judgment dtd 29.1.2007 in tax appeal No 8 of 2008.

5. We find that the Honble Gujarat High Court in the recent decision in the case of Priya Holding P Ltd (supra) held that once the fuel oil contained in the bunker i.e., engine room tanks, falls within the ambit of sub para (b), as a natural corollary the same would be classifiable alongwith the vessel under 89.08 of the Heading No. 89.07 of the Customs Tariff Act.

6. In view of the decision of the Honble Gujarat High Court decision, we find that the impugned order cannot be sustained. Accordingly, the impugned orders are set aside. All the appeals filed by the appellants are allowed.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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