TMI Blog2019 (11) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant that there is a fare charged by the appellant for the voyages that can be undertaken on the vessel imported. It is settled law that classification of goods under the Customs tariff is to be determined by the Custom Authorities and for determining the classification the Custom Authorities are bound by the Terms of Entries in the Tariff, Rules of Interpretation and decisions rendered by the competent courts in relation to the interpretation of tariff. The view taken by other authorities acting under other Acts and Legislation may have persuasive value for determining the classification under the Customs Tariff but cannot be termed as in any case binding on the Customs Authority for determining the classification. For determining the classification of the imported vessel will be as to what would be the usage of such vessel. If this question is put to the person who goes to the vessel and his response is that he visits the vessel for playing casino games and not for cruise/ voyage then the vessel is definitely a pleasure vessel for the purpose of classification under Custom Tariff - In the present case examination report clearly suggests that on all the three decks of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was also stated that casino games/ chairs/ stools are old and used and fitted in the vessel may be classified separately under Chapter 94/95 and may also attract ITC violation. 2.3 B/E was assessed under CTH 89039990 as the vessel imported was a complete casino vessel and it was to be used exclusively for gaming and the same was not a passenger vessel absolutely for any excursion as the vessel did not had any regular seating plan, and the chairs in the vessel were around the gaming table and not for any excursion trips. The value as suggested by the docks on the basis of Chartered Engineer Certificate (produced by the importer) was adopted for assessment. No ITC violation was found as the casino games/ chairs/ stools though old and used were fitted with the vessel and could not have been treated differently. Importer paid the duty assessed vide TR 6 Challan No 20639109 dated 18.05.2009. 2.4 Against the assessment order they filed writ in High Court of Bombay and subsequently withdrew it. They filed the appeal before Commissioner (Appeal) which was allowed (Order in Appeal No 279/2009/MCH/AC/Gr VB/2009 dated 27.10.2009) and Assistant Commissioner directed to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khetrapal [2014 (304) ELT 408 (T-Ahd)] 3.3 Arguing for the revenue learned authorized representative while re-iterating the findings recorded in the impugned order submitted that- It is clear that both the sub heading 801 and 8903 covers the vessels but of different typeso Heading 8901 is for Cruise ships, excursion boats and similar vessels principally designed for the transport of persons; ferry boats of all kinds; Heading 8903 is for yachts and other vessels for pleasure or sports, rowing Boats and canoes; The difference between the two headings is that while the heading 8901 is applicable to vessels that are principally designed for the transport of persons, heading 8903 is for the vessels meant for pleasure. The dock examination report specifically gives the salient features of the vessel and states that the subject vessel is having several casino pleasure games like slot machines/ table games etc. The entire layout of all the three decks is occupied by these casino games. The chairs are laid to these games. These games are exclusively meant for pleasure. The old certificate of inspection dated 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame Rule should apply subject of course to the applicability of the Rule. We have already held that the Rule is not applicable. Similar view was taken in Dunlop India and Madras Rubber Factory Ltd. v. UOI [1983 (13) E.L.T. 1566 (S.C.)]. Hence the classification of the imported goods needs to be determined in accordance with the form in which they were presented for assessment to the customs authority, and not in the form they were designed and in the form they earlier existed. 4.3 Undisputedly the gods were examined by the Customs on first check basis. The text of examination report as recorded by the Assistant Commissioner in his order is reproduced below: 1. Inspected the vessel. Examined 100% under DC (Docks) Supervision. Checked description and quantity wrt import document, C E Certificates issued by International Bluewater Marine Se4rvice Inc dated 29.10.2008 and by Dhiraj Offshore Surveyors Adjusters Pvt dated 30.03.2009. Verified old and used YOM as per CE Certificate. 2. vessel is having several casino pleasure games like slot machines/ table games as per attached list. Annexure. Layout of main deck, second deck and third deck is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After taking the note of above entries in the HSN and also the definition of Pleasure Vessel in Merchant Shipping Act, Mumbai Bench of Tribunal has in case of Waterways Shipyards Pvt Ltd [2013 (297) ELT 77 (TMum)] held as follows: 12 . In the show cause notice Revenue relying on the Supreme Court judgment in the case of C.C.E., Shillong v. Wood Craft Products Ltd. contends that the HSN can be relied upon for the purpose of classification under the Central Excise Tariff. Therefore, the Revenue submits that the Entry 8901 of the HSN covers the vessels, which are principally designed for the transport of persons or to the transport of the goods. Since, the vessel M/s. M.V. Caravela is not principally designed and manufactured for the purpose of transport of persons or goods it cannot be classified under Heading 8901. We find that Entry 8901 of the HSN is as under :- 8901 Cruise Ships Excursion Boats, Ferry Boats, Cargo Ships and Similar Vessels for transport of Person or Goods. 890110 Cruise ships, excursion boats and similar vessels principally designed for the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on below the subheading 8901 as HSN Explanatory Notes states that this Heading covers all vessels for the transport of persons or goods, other than vessels of Heading 89.03 From this explanation it is also inferred that some vessels of transport of persons or goods are also classifiable under Heading 8903 because of the use of the words other than vessels of Heading 8903 in this explanation. Entry 8903 of the HSN reads as under :- 8903 Yatch and Other Vessels for Pleasure or Sports; Rowing Boats and Canoes 8031 Inflatable Other 890391 Sailboats, with or without auxiliary motor 890392 Moto boats, other than outboard motorboats 890399 Other This heading covers all vessels for pleasure or sport and all rowing boat and canoes This heading includes yachts, marine jets and other sailboats and motorboats, Dinglies, kayaks, sculls, skiffs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es more than thirty passengers and this vessel can go to a limited area in the sea. Therefore, this special trade passenger ship is defined under Section 3(47C) is different from the normal passenger ship as defined under Section 3(25). 15 . Now we have to see whether this special trade passenger ship can be classified under Heading 8901 in the category of the vessel used for transport of passengers. The passenger and special trade passenger have been separately defined under the Merchant Shipping Act. The special trade passenger ship can be taken a vessel meant for transport of the passenger as the special trade ship are meant for special trade as defined under Section 3(47A) of the Act and by virtue of words other than the vessels under Heading 8903 in HSN Explanatory Notes of Heading 8901 [this Heading covers all vessels for transport of persons or goods other than vessels of Heading 8903] it is classifiable under Heading 8903. 16 . The contention of the respondent is that their vessel cannot be categorized as a vessel meant for pleasure or sports as internationally known vessels of pleasure or sports as defined in U.K., Australia and Canada are onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items for survey which were not part of the basic design of the vessel could not change the character and classification of the vessel. In the instant case the vessel M/s. M.V. Caravela is designed for the purpose of casino games therefore by applying the ratio of the said decision it should more appropriately be classifiable under Heading 8903 as vessel for pleasure or sports. 19 . It is seen from the above that the vessel in question on one hand Is classifiable as a cruise ship under Heading 8901 and on the other hand it is classifiable as a vessel for pleasure under Heading 8903. In such a situation the Rules for interpretation of the classification come into play Rule 1, 2 3 of the Rule for Interpretation of the Schedule are reproduced as under : 1. The titles of Sections and Chapters are provided for case of reference only; for legal purposes, classification shall be determined according to the terms of the Headings and any relative Section or Chapter Notes and provided such Headings or Notes do not otherwise require, according to the provisions hereinafter contained. 2. (a) Any reference in a Heading to goods shall be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Therefore, following this Rule of Interpretation the vessel in question is more appropriately classifiable under Heading 8903 of the Central Excise Tariff. We hold accordingly. 4.6 Appellants have relied upon the decision of Tribunal Ahmedabad bench in the case of Ashok Khetrapal [2014 (304) ELT 408 (T-Ahd)] wherein it has been held as follows: 5.1 On the issue of classification of the vessel POG, the adjudicating authority has mainly relied upon the fact that the vessel is a Casino vessel and is intended to be made stationary for use as a casino even if it is capable of making voyages in the open sea. On the other hand, importer has come out with the argument that the end use of the vessel should not be made as the basis for classifying a vessel under the Customs Tariff Act. This issue, whether end use of imported goods should be made the basis of classification was decided by Hon ble Apex Court in the case of UOI v. V.M. Salegaoncar a Brs (P) Ltd. (supra). In that case, appellants imported transhippers which were vessels used for carrying cargo loaded from the harbour and carry the same for unloading cargo into the large vessels. The issue before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than eight passengers and includes a pilgrim or a person accompanying a pilgrim; (47C) Special trade passenger ship means a mechanically propelled ship carrying more than thirty special trade passengers. From the above definitions, it is not necessary, as contended by the Revenue that a passenger has to be carried from one place to another in a ship in order to hold that a vessel is a passenger ship . A person taken on board a vessel will also be considered as a passenger as per the above definitions. Various certificates issued by the competent authorities in favour of POG, as per Section 3(38) of the Merchant Shipping Act, 1958, also convey that POG is a passenger ship. It is observed from Para 3 of the order passed by CESTAT Mumbai in the case of CGU Logistics Ltd v. CC (I), Mumbai [2011 (274) E.L.T. 75 (Tri- Mum)] that similar certificates were considered for classifying a vessel as cargo ship of CTH 8901 when special equipments were fitting on it for doing special tasks and Revenue was claiming the classification under CTH 8905. 5.3 It is further observed from the HSN explanatory notes under Heading 89.03 that the notes talk of all ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the importer is not used for personal use of the owner for pleasure or sport but is used for commercial purposes as a Casino vessel . There is thus force in the argument of the importer that when the appropriate authorities under Section 3(38) of the Merchant Shipping Act, 1958, by issuing required certificates, have opined POG to be a passenger ship or Special Trade Passenger Ship then there is no ground for the adjudicating authority to hold that POG is not a passenger ship designed to carry passengers when no contrary opinion of another competent authority is brought on record saying that POG is a vessel for pleasure or sport. 5.6 Temporary use of POG in a stationary position will not change the classification of POG when the same is capable of moving across the seas/oceans but has to be mostly made stationary due to the restrictions imposed by the local laws. It will be a strange situation to classify a vessel under CTH 8901 if used for making trips to open sea, with a night halt arrangement in the sea, but classify the same vessel under CTH 8903 if used in a predominantly stationary position. In view of the above observations, we are of the opinion that Casin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bench stated as follows: 7. We find that the impugned boat imported by the respondents is equipped with modern amenities like swiveling helm seat, Stove, Stainless steel sink, microwave, fridge, coffeemaker and solid surface counter tops; it also contains arrangement for shower, sleep and relaxation; it is no important as to the manner in which the impugned boat is used, it is rather important as to how the boat is built which should be a guideline for determining the classification of boat; in fact, we find that the catalogue describes the impugned boat as Bayliner 325 Cruiser and the Bayliner have claimed themselves to be manufacturers and marketers of recreation boats and Cruisers; there is a prima facie evidence that the boat is intended for the luxury uses; we find that the case of Urmila Company Pvt. Ltd. cited supra is similar to the impugned case; we find that Heading 8901 covers the vessels for transport of persons or goods that vessels design primarily for the conveyance of persons or goods are covered by this Heading; it is not the case of the respondents that it was for the conveyance of persons or goods and looking into the fittings available in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held as follows: 10 . Our attention has been drawn on behalf of the Revenue to the circumstance that glass mirrors have been classified as glass and glassware in Chapter 70 of the Brussels Tariff Nomenclature. It seems to us that this circumstance can hardly advance the case of the Revenue, because the First Schedule to the Central Excises and Salt Act does not appear to have been modelled on the Brussels Tariff Nomenclature. There is nothing to show that the Tariff Items were classified in the Schedule on the basis of the Brussels Tariff Nomenclature. It was when the Customs Tariff Act, 1975 was enacted that the First Schedule to that Act was framed in accordance with the Brussels Tariff Nomenclature, evidently because the progress made in industrial growth and economic development, and the substantial changes in the composition and pattern of India s external trade called for the need to modernise and rationalise the nomenclature of India s Tariff in line with contemporary conditions (introductory comments on the Customs Tariff Act, 1975). The glass mirrors were still not specifically mentioned under the Customs Tariff Act, 1975. They are now being brought in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kakai, etc. are not understood as medicines in common parlance though they might have been mentioned in the ayurvedic reference books. Even if such products are being sold/advertised as ayurvedic medicines, it is not sufficient to establish that the product is noticee party have failed to produce any evidence, document or otherwise that the product shampoo being sold by them is known as ayurvedic medicine in common parlance and not as a toilet preparation. In interpreting tariff hearing of a commodity, resort should not be made to the scientific and technical meaning of the terms and expression used but to their popular meaning in medical practitioner for a specific disease. Further, I find in his statement dated 16-9-96 recorded under sec. 14 of the Central Excise Act, 1944, Shri Ajay Kumar Gupta, Manager referred to their product as shampoo thereby indicating its actual identity as known in common trade parlance. Consequently, I find no reason to agree with views of the defence that their product is ayurvedic medicine and not shampoo as understood in common trade parlance. 4.12 Further elaborating the above principle Hon ble Apex Court has in case G S Auto Interna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40 --- Barges 8901 10 90 --- Other 8901 20 00 - Tankers 8901 30 00 - Refrigerated vessels, other than those of Sub-heading 8901 20 8901 90 00 - Other vessels for transport of the goods and other vessels for the transport of both persons and goods 8903 Yachts And Other Vessels For Pleasure Or Sports; Rowing Boats And Canoes 8903 10 00 - Inflatable - Other : 8903 91 00 -- Sail boats, with or without auxiliary motor 8903 92 00 -- Motorboats, other than outboard motorboats 8903 99 -- Other : 8903 99 10 --- Canoes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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