Classification of ship's fuel and lubricating oil depends on whether it is contained in machinery or merely stored elsewhere onboard.

Fuel and lubricating oil found in a tank kept in a vessel's engine room, on import of a vessel for breaking up, were not treated as part of the vessel for classification under Heading 89.08. The classification turned on a departmental circular based on the World Customs Organisation view, which distinguished fuel and oil contained in the machinery or engines from fuel and oil stored elsewhere on board. Because the goods were in a tank in the engine room and not in the machinery or engine itself, the condition for Heading 89.08 was not met. The separate classification applied by the lower authorities was upheld.

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Issues: Whether fuel and lubricating oil contained in a tank kept in the vessel's engine room, on import of a vessel for breaking up, were classifiable under Chapter Heading 89.08 as part of the vessel or under the appropriate separate heading for ship's stores, fuel and oil.

Analysis: The classification was governed by the departmental circular issued on the basis of the opinion of the World Customs Organisation, which drew a distinction between fuel and oil contained in the vessel's machinery and engines and fuel and oil kept elsewhere on board. Only the former could be treated as forming an integral part of the vessel and classifiable under Heading 89.08. As the goods in question were found in a tank kept in the engine room and not in the machinery or engine itself, the determining criterion for Heading 89.08 was not satisfied.

Conclusion: The fuel and lubricating oil were not classifiable under Chapter Heading 89.08, and the separate classification adopted by the lower authorities was upheld.

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