2007 (3) TMI 466

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....er, for the purpose of ship breaking in pursuance of an agreement dated 5-10-2000. (b)     The vessel arrived on 19-10-2000 and was boarded by the Customs officers on 21-10-2000 and Bill of Entry for vessel was filed claiming classification under Tariff Heading 8908.00. On completion of assessment and on payment of duty of Rs. 2,04,00,660/- out of charge was given to the vessel on 6-11-2000. (c)     The appellant company removed oil, fixtures, fittings, cabin, propellers, cylo, engine machineries, piping, ducting, cables, panels, motors, conveyor belts, cranes, hoper tanks, overhead cranes, generator sets, roots blowers, superstructures and bridge section. Thereafter, they removed hold nos. 1 & 2, f....

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....n vessel" was seized and on the basis of investigation conducted, show cause notice was issued holding that the "partly broken vessel", which was sought to be removed should be treated as a vessel falling under Tariff Heading 8901, and the same was confiscated with an option to redeem the same on payment of fine of Rs. 50 lakhs; the total duty payable was determined as Rs. 3,29,39,999/- and consequently a differential duty of Rs. 1,25,39,339/- was demanded. A sum of Rs. 3,29,39,999/-was imposed as penalty on the appellant-company under Section 114A. A penalty of Rs. 10 lakhs was imposed on Shri Nazir Hussain Kaliwal, the Director of the appellant-company. 4. The ld. Advocate for the appellants submits that as per Bill of Entry filed o....

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....ng. It is noticed that the vessel was cut from  both sides leaving in between the cement packing plant intact. It is also noticed that all other major parts and components of the ship have been removed by the appellant. What was left after removal of various machinery including the engine, propeller, navigation equipments cannot be treated as a ship. The ship breaking does not mean that even retrievable article; machinery should be demolished in toto. What was left over was no doubt a high valued cement packing plant. The Commissioner has taken a view that if the cement packing plant was dismantled and removed as parts or sub-assemblies then the ship breaking would have been completed. It the cement packing plant could be used as such ....