TMI Blog2002 (11) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... ty separately and whether the Customs duty is leviable on foodstuff. 2. Shri A.D. Maru, learned Advocate, submitted that the Appellants imported old ships for breaking, falling under Heading 89.08 of the first Schedule to the Customs Tariff Act; that Special Additional Duty of Customs (SAD in short) was imposed by the Finance Act, 1988 in lieu of Sales Tax; that Notification No. 56/98-Cus., dated 1-8-98 exempts SAD in respect of goods which are imported for sale as such, subject to the condition that they are imported at the time of clearance for home consumption, importer makes a specified declaration to that effect in the Bill of Entry; that the first proviso also provided that Exemption shall not apply if the importers sells the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were acquired. No process whatsoever would apply to the goods which looses in the process of manufacture. The question of using the goods purchased in the manufacture of other goods, therefore, did not arise. Reliance has also been placed on the decision in the case of State of Tamil Nadu v. Raman and Company - 1994 (93) STC 185 (S.C.). 3. Ld. Advocate also mentioned that the appellants are not liable to pay the duty on fuel oil of the ships on classifying it separately because it is covered by Para 2(b) of the Board's Circular No. 37/96-Cus., dated 3-7-96; that Para 2(b) of the Circular provides that fuel and oil contained in the vessel, machinery and engine can also be regarded as forming integral part of the vessel and hence be classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to Sales Tax, they are entitled to exemption, is not correct on the simple ground that the exemption from SAD is in respect of only those goods which suffered Sales Tax "as such"; that the activity of breaking up of ships amount to manufacture and the various goods which emerge may be chargeable to Sales Tax which will not mean that the vessel/ships itself has suffered the incidence of Sales Tax. The ld. DR further submitted that Section 86 of the Customs Act provides that any stores imported in a vessel may, without payment of duty, remain on Board such vessel while it is in India; that it means that Exemption is only in respect of vessel in transit; that Section 87 of the Act provides for consumption of stores on board a vessel durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance of warehoused goods for home consumption under the provisions of Section 68 of the Customs Act, 1962 (No. 52/1962) as the case may be, makes a specific declaration to that effect in the Bill of Entry in the manner specified below : Provided that the rate specified herein shall not apply if the importer sells the said imported goods from a place located in an area where no tax is chargeable on sale or purchase of goods." 6. Declaration appended to S. No. 12 of the Notification was to be given in the following terms "(a) Description of the Goods (b) Bill of Entry No. and date (c) Goods are for sale purpose only (d) Sale not from a place where no sales tax is chargeable." It is thus evident from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and they are liable to pay SAD. 7. As far as foodstuff is concerned, the provisions of Sections 86 and 87 of the Customs Act are not attracted as the foodstuff in the present matter, cannot be treated as ship stores. The stores are not chargeable to duty under Section 87 only when these are consumed as stores, during the period vessel is a "foreign going vessel". As per Section 2 (21) of the Customs Act, 'foreign going vessel' means any vessel for the time being engaged in the carriage of the goods or passenger between any port in India and any port outside India. The vessel or ships in the present matters are not falling within the definition of the foreign going vessel and as such the provisions of Section 87 are not applicable. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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