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2014 (12) TMI 772 - CESTAT MUMBAIImport of Anchor-Handling Tug/Supply Vessel (AHTS) - Classification - Rate of duty - Inclusion of freight value @20% and insurance amount @1.125% to the goods - Held that:- In view of the classification of the vessel by the Indian Register of Shipping as a ‘supply vessel', which is the competent authority for issue of certificate of class of vessels in India, and also in view of the Chartered Engineer's certificate issued at the time of importation, there is merit in the appellant's contention that the vessel would merit classification under CTH 8901. We also find that the American Bureau of Shipping has also classified the vessel as a ‘supply vessel'. Even if the vessel has a capacity to do anchor handling, even then it would remain as a supply vessel as anchor handling feature is only as an additional facility and would not take away the vessel from the scope of a cargo vessel or a vessel which can transport persons. Valuation - Held that:- As regards the re-determination of value, we find that the Commissioner has adopted a rate of 21.125% of the cost towards freight and insurance. The appellant had given details of the expenditure incurred by them for the transport of the vessel from Dubai to India. In such a situation, the Commissioner could not have added freight and insurance @21.125%. Since the vessel had come on its own motion, only the actual cost of transportation incurred should have been added for determination of assessable value. As regards the confiscation and imposition of penalty, we do not find any reason for the same. The vessel was examined by the Customs Officers along with a Chartered Engineer before its clearance was allowed. When the appellant claims a classification under CTH 8901, it is based on its understanding of the subject matter and the same cannot be treated as a mis-declaration as held by the hon'ble apex Court in the case of Northern Plastic Ltd. vs. Collector of Customs & Central Excise [1998 (7) TMI 91 - SUPREME COURT OF INDIA]. In the present case, the vessel was boarded by the Customs officers and was examined. Thereafter, the goods have been cleared accepting the declaration of the appellant. In such circumstances, the question of mis-declaration would not arise at all. Therefore, the wrong classification claimed by the appellant as held by the adjudicating authority, with which we do not agree, cannot be a reason for invoking the provisions of Section 111(m) for confiscating the goods and imposition of fine and penalty on the appellants. Such a unilateral action on the part of the department without any rhyme or reason cannot be sustained in law. - Decided in favour of appellant.
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