TMI Blog2020 (3) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... nst which order a Civil Appeal No. 5/87 [1991 (55) E.L.T. A33 (S.C.)] had been filed by the Collector of Customs, Bombay and the said appeal came to be withdrawn by order dated 7-5-1991. The statutory authorities under different enactments have consistently held that dredgers are to be considered as ocean going vessels . In fact, the dredger which has been registered as a ship under the Merchant Shipping Act, 1958 has also been recognized by the Income Tax Department as a ship. Thus, the question has to be answered in favour of the respondent-assessee and against the petitioner-Revenue by arriving at a conclusion that dredgers are ocean going vessels i.e., ship and it cannot be termed, considered or held as machinery referabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for short KTEG Act ) levied entry tax of ₹ 1,06,00,000/- @ 2% on dredges by construing the same as machinery and similar penalty under Section 5(5) of the KTEG Act, which was rectified under Section 17(1) of the KTEG Act on 29-6-2006 determining the tax at ₹ 22,91,164/- and also levied same amount of penalty for the assessment year 1992-93 and said assessment order which came to be passed on 17-3-2006 was affirmed by the Appellate Authority on 11-11-2008. Being aggrieved by the same, assessee filed an appeal in STA 379/2009 before Karnataka Appellate Tribunal urging several grounds. Tribunal, after having considered the rival contentions, by order dated 30-6-2010 which is under challenge, held that dredgers are ocean going vess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the dredger also as a ship and hence, he prays for answering the substantial questions of law in favour of the Revenue and against the respondent-assessee. 5. Per contra, Sri G. Rabhinathan, Learned Counsel appearing for the respondent-assessee would support the order of the Tribunal and draws the attention of the Court to the documents produced before the Tribunal in order to substantiate or support the order passed by the Tribunal. Hence, he prays for answering the substantial questions of law in favour of the respondent-assessee and against petitioner-Revenue. 6. Since discussion and adjudication on these two points would overlap, we are of the considered view that both questions of law are to be taken up together for considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not include a sailing vessel . (vi) An obligation is cast for every Indian ship which does not exceed fifteen tons net, to be registered under the Act as required under Section 22(1) of the Act. On completion of registration of an Indian Ship the Registrar would grant a certify cate of register containing particulars reflecting the said registration by grant of certificate as contemplated under Section 34. Section 318 of the Act prohibits any Indian Ship to proceed to sea unless the certificate issued under Section 316 of the Act. Section 356B of the Act would indicate the definitions of various phrases and as defined therein clause (n) defines ship as under : 356B(n) ship means a vessel of any type whatsoever operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, sugarplum - Gr. tragemata, dessert ] The expression dredge has been defined in The Law Lexicon reprint Edition 1987 to the following effect : Dredge . As a noun in its original meaning, a net or drag for taking oysters; it is now called a machine for cleansing canals and rivers; but sometimes applied to a dredger. As a verb, to gather or take with a dredge to remove sand, mud and filth from the beds of rivers, harbours and canals with a dredging machine. In the light of above said definition in the common parlance and the definition of ship as defined under the Merchant Shipping Act, 1958 are read together, contention of Revenue that dredgers cannot be construed as ships cannot be accepted. Even other taxing authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which has been registered as a ship under the Merchant Shipping Act, 1958 has also been recognized by the Income Tax Department as a ship. 8. In the light of the aforestated discussion, we are of the considered view that questions of law, raised hereinabove, has to be answered in favour of the respondent-assessee and against the petitioner-Revenue by arriving at a conclusion that dredgers are ocean going vessels i.e., ship and it cannot be termed, considered or held as machinery referable to entry 52 of 1st schedule of KTEG Act. 9. Hence, the following : ORDER (i) Revision petition is dismissed by answering the substantial question of law against the petitioner-Revenue and in favour of the respondent-assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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