Concessional assessment and exemption require proof of factual conditions; fuel oil, ship stores, and vessel-break parts all failed the test.

Concessional assessment or exemption was denied where the claimant failed to prove the factual preconditions for relief. Fuel oil on board the vessel was not shown to be contained in the engine or machinery as required for Heading 89.08, so the lower assessment was sustained. Ship stores allegedly consumed during the voyage were not proved to have ceased to exist by the relevant assessment date, so duty was correctly maintained. Special Additional Duty exemption was unavailable because the notification applied only to imported goods sold as such, whereas only parts obtained after breaking the vessel were sold.

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Issues: (i) whether fuel oil on board the vessel was eligible for assessment under Heading 89.08 as fuel contained in the engine and machinery of the ship; (ii) whether ship stores allegedly consumed during the vessel's compulsory voyage could be excluded from duty; and (iii) whether Special Additional Duty was exemptible on the sale of parts obtained after breaking the vessel.

Issue (i): whether fuel oil on board the vessel was eligible for assessment under Heading 89.08 as fuel contained in the engine and machinery of the ship.

Analysis: The circular relied on by the appellant treated fuel oil contained in the vessel's machinery and engines as forming an integral part of the ship and therefore assessable along with the vessel under Heading 89.08. However, the evidence produced did not establish that the fuel oil in question was actually contained in the engine or machinery. The bunker survey report also did not show the location of the fuel oil with the required certainty. The claimant had to prove the factual basis for the lower assessment, and that burden was not discharged.

Conclusion: The fuel oil was not shown to qualify for assessment under Heading 89.08, and the assessment upheld by the lower authority was sustained.

Issue (ii): whether ship stores allegedly consumed during the vessel's compulsory voyage could be excluded from duty.

Analysis: The stores were verified on an earlier date, and no evidence was produced to show that they had ceased to exist by the date the vessel was beached. A mere assertion that the stores were consumed during the intervening period was insufficient. In the absence of proof that the stores were non-existent at the time relevant for assessment, the claim for non-levy could not be accepted.

Conclusion: Duty on ship stores was correctly sustained.

Issue (iii): whether Special Additional Duty was exemptible on the sale of parts obtained after breaking the vessel.

Analysis: The exemption under the notification applied only where imported goods were sold as such. The imported article was the ship itself, which was not sold as such; instead, only its parts were sold after breaking. The condition for exemption was therefore not satisfied.

Conclusion: Exemption from Special Additional Duty was not available.

Final Conclusion: The challenge to the assessments failed on all substantive grounds, and the orders of the lower authorities were maintained.

Ratio Decidendi: A party seeking concessional assessment or exemption must establish the factual precondition for the benefit, and an exemption limited to goods sold as such does not extend to parts obtained after breaking up the imported goods.

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