Imported vessels keep ocean-going vessel status on importation, so intended scrapping does not defeat exemption from countervailing duty.

Imported vessels for breaking up were assessed on their condition at the time of importation, and their intended post-importation scrapping did not change that character. The exemption notification covered ocean-going vessels and did not exclude vessels merely because they were old, used, or proposed to be broken up. The operative test was the nature of the goods on entry into the country, not their later use or disposal. On that basis, the vessels remained within the exemption and were not liable to countervailing duty.

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Issues: Whether vessels imported for breaking up continued to be covered as ocean going vessels under the exemption notification and were therefore not liable to countervailing duty.

Analysis: The imported vessels were to be assessed in the condition in which they entered the country. Their subsequent intended breaking-up did not alter their character at the time of import. The notification exempted ocean going vessels and did not exclude vessels merely because they were old, used, or proposed to be scrapped. The relevant test was the nature of the goods on importation, not the post-importation use or disposal.

Conclusion: The vessels were covered by the exemption notification and were not liable to countervailing duty. The issue was decided in favour of the assessee.

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