TMI Blog2005 (3) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... ts ) and cleared the same during January-February, 1999 under nine Bills of Entry by claiming exemption under Notification No. 23/98-Cus., dated 2-6-98 (Sl. No. 227) and executing a Bond-cum-Bank Guarantee for full duty at effective rate. They had declared the subject equipments as ship spares imported for repairs of Ocean-going vessels. The equipments were installed in the ships of M/s. Essar Shipping Ltd. Later on, it appeared to the department from the results of investigations that the subject equipments had been misdeclared with intent to avail the benefit of exemption under the above Notification and were not used for any repair of ship. Therefore, a show-cause notice was issued to M/s. CSCPL on 25-6-2001 proposing to confiscate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to them by misinterpreting the said entry in the Notification. The word repair in the said entry was grossly misunderstood and misinterpreted by the Commissioner by wrongly relying on its dictionary meaning. The subject equipments were used for upgrading the radio communication and navigation equipments in the ship for making the vessel sea-worthy as required under IMO regulations. The fitment of the equipments to make the ship sea-worthy amounted to repair . Hence the subject equipments fully answered the description of goods at Sl. No. 227 of Notification No. 23/98-Cus., and there was no misdeclaration of the imported goods in this case. The goods were correctly declared as ship spares for repair of ocean-going vessels. Ld. Counsel r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 of the Customs Act. Ld. SDR reiterated the findings of the adjudicating authority. 3. After giving careful consideration to the submissions, we find that the short question arising in this case is whether the subject equipments, which were declared as ship spares for repairs of ocean-going vessels, are covered by the description of goods under Sl. No. 227 of the table annexed to Notification No. 23/98-Cus. This entry reads as under : Sl. No. Chapter or Heading No. or sub-heading No. Description of goods Standard rate Additional duty Condition (1) (2) (3) (4) (5) (6) 227 Any chapter Capital goods and spares thereof, raw materials parts m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r . The Tribunal answered this question in the following words :- It is that by the operation of the Rules of 1995, the craft which was not fitted with this equipment became unsea-worthy. It was illegal to ply such craft. If for them to be restored to a sea-worthy state fitment of some article was required, such fitment amount to repair. In other words, carrying out an activity in order to ensure compliance with the Rules of 1995 without which the vessel would not have been allowed to sail the fitment is clearly repair of the ships. 4. We share the above view and hold that the fitments of the subject equipments to the ships of M/s. ESL by M/s. CSCPL for making the vessels sea-worthy amounted to repair of ocean-going vessels under S. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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