TMI Blog2019 (12) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... ERSUS CC JAMNAGAR [ 2014 (4) TMI 421 - CESTAT AHMEDABAD ] where it was held that Casino vessel POG imported by the importer is principally designed to carry passengers and has been correctly assessed under CTH 8901. In the light of the decision in re Ashok Khetrapal and the absence of other binding precedent on the classification of casino vessels as pleasure boats , we are not required to examine the other submissions based on other decisions. Appeal dismissed - decided against Revenue. - Excise Appeal No: 86759 of 2016 With Excise Cross-Objection No: 91116 of 2016 - A/87160/2019 - Dated:- 1-11-2019 - HON BLE MR C J MATHEW, MEMBER (TECHNICAL) AND HON BLE DR SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri Roopam Kapoor, Principal Commissioner (AR) for the appellant Shri JH Motwani with Ms Nehal Parekh, Advocates for the respondents ORDER PER: C J MATHEW In this appeal we are called upon to resolve the dispute in classification of MV Royale Floatal , a vessel manufactured by M/s Vijai Marine Services in which Revenue is aggrieved by order-in-original no. GOA-EXCUS-000-COM-021-15-16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ichards (Goa), the photographs made available to the central excise authorities, it was concluded in the impugned order that the changes wrought after clearance by respondent herein would have no impact on the classification. Further reliance was placed by the adjudicating authority on the registration of the vessel as passenger ship under the Inland Vessels Act, 1917 and on the certificate issued by the Indian Register of Shipping as that of passenger vessel which, according to the adjudicating authority, precluded description as pleasure boat as held by the Tribunal in Raj Shipping Agency Ltd v. Commissioner of Customs [2015-TIOL1405-CESTAT-MUM]. Disinclined to rely upon no objection certificate dated 5th June 2014 issued by the Directorate of Health Services, Goa, indicating it to be a casino vessel, the adjudicating authority has held that the said authority lacked the relevant technical expertise to assist in classification of the impugned goods. Taking note of the independent operations of the holding company and its two subsidiaries, the adjudicating authority did not find that relationship among them sufficed for concluding that the intent was for deployment as othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the owner; or (bb) in the case of a vessel owned by a body corporate, used only for sport or pleasure and on which the persons on board are employees or officers of the body corporate, or their immediate family or friends; and (ii) on a voyage or excursion which is one for which the 'owner does not receive money for or in connection with operating the vessel or carrying any person, other than as a contribution to the direct expenses of the operation of the vessel incurred during the voyage or excursion; or (b) any vessel wholly owned by or on behalf of a members' club formed for the purpose of sport or pleasure which, at the time it is being used, it used only for the sport or pleasure of members of that club or their immediate family, and for the use of which any charges levied are paid into club funds and applied for the general use of the club; and (c) in the case of any vessel referred to in paragraphs (a) or (b) above no other payments are made by or on behalf of users of the vessel, other than by the owner. 5.5 Above definition of a pleasure vessel gives support to the argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... games of pleasure and games of chance, the functionality, as a means of transport, does not undergo transformation. The fine line of distinction between opulence and pleasurable degeneracy may pose a dilemma for the moralist but, in the absence of such considerations in ascertainment of rate of duty in the First Schedule to Central Excise Tariff Act, 1985, insistence upon classification on perception or usage would be tantamount to insinuating personal values which, while permissible in Legislative enactments, is to be eschewed in tax enforcement. The characteristic of buoyancy and the capacity to move is relevant to the classification in the default category under heading no. 8901 of First Schedule to Customs Tariff Act, 1975. Further, specialized classification will be contingent upon strict conformity with description of the headings in consonance with the principles of classification. 6. The original authority has established that the impugned vessel was, at the time of clearance, not endowed with the wherewithal to operate as a casino. This aspect is also not seriously disputed by Revenue. The original authority has further gone on to identify, supported by app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in his arguments may be endorsed by tax authority, we take note that the adjudicating authority has merely drawn attention to the certifying authorities as exemplification. Placing emphasis and in our opinion, rightly so, on the condition of the goods at the time of clearance, the adjudicating authority has merely noted the absence of descriptions of a more specific identity , by the certifying authorities, to conclude that no intervention was warranted. 8. Considering the detailed discussion on the statements of various officials of the user organisations, the submission of the Learned Authorised Representative does not impress and we find no reason to entertain those as supportive of the proposal to re-classify the goods. 9. In re Waterways Shipyard Pvt Ltd, the vessel in dispute was cleared in February 2001 and reliance was placed upon the classification of the vessel as special trade passenger ship to conclude that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as a survey vessel. I hold that the importer has not lead such specific or substantive evidence to accept their contention that the character of the vessel as built by the original builder had been permanently changed. Accordingly, I reject their contention to classify it as other than yacht. In view of my findings, I hold that based on its original design, manufacture intention, shipping registration and other features noticed on inspection and the data available on records, the imported vessel is correctly classifiable as a `Pleasure Yacht under Heading 8903.99 Schedule I CTA, 1975. 18. We have already referred to above that the vessel in question was designed and registered as a vessel for pleasure. Its fittings, fixtures and equipment indicated that it was usable not for carrying cargoes or passengers for commercial purposes but was for vacation, enjoyment etc. The items for survey which were not part of the basic design of the vessel could not change the character and classification of the vessel. and taking this finding to its logical conclusion, the Tribunal had held that as it is possible to classify the vessel impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange in length from about 10 ft to over 120 ft. Boats longer than 30 ft are often called yachts. These large boats have such built in features as beds, galleys and heads (toilets). The speed boat is a motor boat built to go fast, especially for use on lakes and rivers. 9. Survey is a general term and connotes the process of determining, the position, extant, contour etc. of an area usually for the purpose of preparing a chart. There is no separate classification for boats used for survey. It is the basic design of the vessel that determines its classification. A pleasure boat will not cease to be a pleasure boat even when it is used for survey purposes. 10. Under the scheme of the Customs Tariff ships, boats and floating structures were covered by Chapter 89 of the Customs Tariff. From the reading of the Tariff entries, it is seen that it is the basic design providing for its essential character as to make it a vessel of a particular kind (keeping in view the main function which the vessel was required to discharge) that determines the classification of the particular vessel. At the time of the construction of the vessel, the main function which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Passenger Ship or a Pleasure vessel . The words Passenger , Passenger Ship and Pleasure Vessel have neither been defined under the Customs Tariff Act nor in the HSN explanatory notes. The words Passenger and Passenger Ship Special Trade Passenger and Special Trade Passenger Ship have been defined under Section 3(24) and 3(25), 3(47B) and 3(47C) of the Merchant Shipping Act, 1958 as follows :- 3. Definitions. - In this Act, unless the context otherwise requires, - (24) Passenger means any person carried on board a ship except - (a) a person employed or engaged in any capacity on board the ship on the business of the ship; (b) a person on board the ship either in pursuance of the obligations laid upon the master to carry shipwrecked, distressed or other persons or by reason of any circumstances which neither the master nor the character, if any, could have prevented or forestalled; (c) a child under one year of age; (25) Passenger ship means a ship carrying more than twelve passengers; (47B) Special trade passenger means a passenger carried in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of a vessel owned by a body corporate, used only for sport or pleasure and on which the persons on board are employees or officers of the body corporate, or their immediate family or friends; and (ii) on a voyage or excursion which is one for which the owner does not receive money for or in connection with operating the vessel or carrying any person, other than as a contribution to the direct expenses of the operation of the vessel incurred during the voyage or excursion; or (b) any vessel wholly owned by or on behalf of a members club formed for the purpose of sport or pleasure which, at the time it is being used, it used only for the sport or pleasure of members of that club or their immediate family, and for the use of which any charges levied are paid into club funds and applied for the general use of the club; and (c) in the case of any vessel referred to in paragraphs (a) or (b) above no other payments are made by or on behalf of users of the vessel, other than by the owner. 5.5 Above definition of a pleasure vessel gives support to the argument made by the Advocate of the importer that a vessel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Schedule (to the customs tariff). Reading down the rules he finds that rule 3a and rule 3b are not applicable and therefore he resorts to rule 3c which states that where goods cannot be classified by reference to 3a or 3b, they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration. In our considered view and on the basis of the analysis above, we find that the Heading 8901 provides the more specific description. Therefore there is no doubt about the applicability of rule 3a which states that the heading which provides the most specific description shall be preferred. In the present case, the vessel is designed as a supply vessel for transport of persons as per the Certificate of Indian Registry. The case laws relied upon by the ld AR do not help the stand of Revenue, rather they strengthen our view that the classification under Heading 8904 is not correct. As the vessel in question is a supply vessel used for transport of persons and goods, the correct classification would be CTSH 8901 90 00 (which is rejected by the Commissioner in para 476) which covers Other vessels for transport of the goods and other v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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