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Dempo Shipbuilding & Engg. P. Ltd. Versus Commissioner of C. Ex., Mumbai

2016 (5) TMI 605 - CESTAT MUMBAI

Classification - Pontoon with spuds - Whether to be classifiable under Chapter Heading No. 89.05 eligible for exemption from payment of duty or under Chapter Heading 89.07 attracting rate of duty of 20% ad valorem - Product is a self elevating platform - Held that:- as per HSN explanatory notes, the floating articles which answer to description as self-elevating platform get covered under CH. 8905 and floating structure which has drilling or production platform are covered under 8905.20 and any .....

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s are pontoon, is misplaced as the very same explanatory notes exclude pontoons having the character of vessel falling under Heading No. 89.01 or 8905. In the case in hand, it is found that Indian Registrar of shipping has registered the floating structure manufactured by the appellant as “self-elevating platform” and has given at the registration as “AF-SEP-RANI & AF-SEP-RAJA”.

We find strong force in the contention raised by the appellant that same product self-elevating platform wa .....

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ided in favour of appellant - E/3291/1998-Mum and E/614/2007-Mum - Final Order Nos. A/3592-3593/2015-WZB/EB and Misc. Order No. M/5007/2015-WZB/EB - Dated:- 20-10-2015 - Shri M.V. Ravindran, Member (J) and C.J. Mathew, Member (T) Shri S.B. Gabhawala, CA, for the Appellant. Shri R.K. Magi, Additional Commissioner (AR), for the Respondent. ORDER [Order per : M.V. Ravindran, Member (J)]. - The appellant herein has filed a miscellaneous application for urging additional grounds of appeal. After cons .....

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spect of the products manufactured by them pontoon with spuds claiming the classification under chapter Heading No. 89.05 and claiming exemption from payment of duty, while the lower authorities have come to a conclusion that the product was correctly classifiable under chapter Heading No. 89.07 attracting rate of duty of 20% ad valorem. Both the lower authorities have come to the same conclusion. 4. Learned chartered accountant draws our attention to the facts in impugned orders records an .....

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ich are used for various purposes like drilling or production, cementing etc. He would further submit that the issue was first decided in the favour of the appellant assessee by the order of the Tribunal dated 21-5-2004 [2004 (172) E.L.T. 415 (Tribunal)] but on an appeal, Supreme Court remanded the matter back for reconsideration [2015 (319) E.L.T. 359 (S.C.)]. He would further submit that the chapter Heading No. 89.07 as is claimed by the Revenue is starting with description as other floating s .....

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090, in support of which he produces the copy of the shipping bill. It is his submission that after the completion of the work, Affcons imported the same goods back and filed the bill of entry claiming classification under 89059090, which was accepted by the Commissioner of Customs Ahmadabad and duty was discharged accordingly. It is his submission that aggrieved by such an order, revenue preferred an appeal before the Tribunal and Tribunal upheld that the product which came into India, with oth .....

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floating in water needs to be registered with Indian Registrar of Shipping and produces the copy of the certificate of registration. It is his submission that the Indian Registrar of Shipping is constituted by the government of India for accurate classification and registration of the vessels/floating structures. 6. Learned departmental representative on the other hand would draw our attention to the order-in-original and submit that the Assistant Commissioner had visited the site to ascer .....

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puds did not have any other machinery installed nor does it have quarters/accommodation for crew which is prime requirement for to be classified on drilling platform. It is his further submission that in short these flouting structures cannot be considered as a vessel falling under Chapter Heading Nos. 89.012 to 89.04, nor would also fall under 8905 as there was no navigability of the said floating structure. He would submit that the registration granted by Indian Registrar of Shipping is not th .....

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sed the records. 8. The issue that falls for consideration, in the case in hand is whether the product manufactured by the appellant is classifiable under chapter Heading No. 89.05.90 and eligible for exemption for payment of Central Excise duty or 89.07.90 liable to full rate of duty. 9. It is undisputed that the appellant manufactures floating structure of big size and clears the same from the factory premises to the site for assembling at site of the clients. The client subsequently .....

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by the appellant are registered with the Maritime Board by the Indian Registrar of Shipping, as self-elevating platform for operation in Indian coastal areas of maximum water depth, including tide, of 30.0M, maximum wave height 2.0M, maximum total current of 7.0 Knots and wind speed of 50. Knots; the said registration on request of application for change is also issued for the change in name of the said floating structure and is registered as Jack up platform Rani/Raja . 10. At the outset, .....

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s 89.07.10-INFLATABLE RAFTS 89.07.90-OTHER The claim of appellant is that the product is question would fall under CH. 8905.90, while the Revenue feels products would be rightly classified under CH. 89.05.07. We tried to understand the tariff entry by looking into chapter notes but there are none. We then referred to the HSN explanatory notes of both the chapters, which were produced by both sides. On perusal of HSN explanatory notes for chapter Heading No. 89.05, we find that the said chapter n .....

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form their main function ill a stationary position. They include : light-vessels; drill-ships; fire-floats; dredgers of all kinds (e.g. grab or suction dredgers); salvage ships for the recovery of sunken vessels; permanently moored air-sea rescue floats bathyscaphes; pontoons fitted with lifting or handling machines (e.g. derricks, cranes; grain elevators) and pontoons clearly designed to serve as a base for these machines, House-boats, laundry boats and floating mills are also covered by this g .....

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air or transport of amphibious vehicles or other craft. Floating or submersible drilling or production platforms, Such platforms are generally designed for the discovery or exploitation of off-shore deposits of oiler natural gas. Apart from the equipment required for drilling or production, such as derricks, cranes, pumps, cementing units, silos, etc., these platforms have living quarters for the personnel. These platforms, which are towed or in some cases self-propelled to the exploration or pr .....

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merged over the work sites with their ballast tanks resting on the sea bed 111 order to provide a high degree of stability to the working platform which is kept above 1110 water level. The ballast tanks may have skirts or piles which penetrate more or Jess deeply into the Sea bed. (3) Semi-submersible platforms which arc similar to submersible platforms, but differ from them in that the submerged part does not rest on the sea bed. When working, these floating platforms are kept in a fixed positi .....

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from the above reproduced HSN explanatory notes, the floating articles which answer to description as self-elevating platform get covered under CH. 8905 and floating structure which has drilling or production platform are covered under 8905.20 and any other floating structure is covered under 8905.90. The factual matrix as reproduced by us herein above indicates that the floating structures as manufactured by the appellant and assembled at site are supported by spuds for resting on the sea bed a .....

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istered the floating structure manufactured by the appellant as self-elevating platform and has given at the registration as AF-SEP-RANI & AF-SEP-RAJA we reproduce the said certificates of registration. Against such an evidence, Revenue has not come up with contrary evidence to show that the floating structures as manufactured by the appellant are not a vessel. Both the lower authorities have mis-construed description of Heading No. 89.05 to come to a finding that the floating structures are .....

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pellant that same product self-elevating platform was imported back into India after its foreign voyages, was sought to be classified by the department under CTH 8905.2020, the Tribunal has upheld classification under 89.05.9090. In our considered view, arguments by the learned counsel are acceptable as the classification of the same products when re-imported into India after its foreign voyage would be the same as is manufactured. We reproduce the relevant paragraphs from the cited decision [wh .....

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Import has one Manitowoc 18000 crane (Turret Mounted Crane) along with six mooring winches, gen sets, Jacking system, power packs, pumps & other miscellaneous equipments. However, there were no other equipments like drills or production equipments mounted on the floating platform SEP Samrat, but as per the website literature of Drydocks World SEP Samrat, manufactured for importer Affcons Infrastructure Ltd., had the option for mounting drills. As per the description of CTH 8905 the categorie .....

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