Function-based tariff classification places an accommodation barge under Heading 89.05, defeating exemption under the customs notification.

The classification of a second-hand accommodation barge turned on its primary function rather than its ability to float or be towed. Because the vessel had no self-propulsion, was used mainly to accommodate personnel working on offshore platforms, and its water movement was only incidental to that stationary role, it fell under Heading 89.05 as a vessel whose navigability is subsidiary to its main function. The claim for classification under Heading 89.01 and the linked exemption under Notification No. 21/02-Cus therefore failed. A past classification of another vessel did not bind the revenue, since there is no estoppel in fiscal matters.

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Issues: Whether the imported second-hand accommodation barge was classifiable under Heading 89.01 as a barge for transport of persons or goods and eligible for exemption under Notification No. 21/02-Cus, or under Heading 89.05 as a vessel whose navigability was subsidiary to its main function.

Analysis: The vessel had no self-propulsion, was towed, and was fitted with accommodation facilities for personnel, mooring arrangements, and a floating crane for ancillary loading and unloading. The classification scheme in Chapter 89 was treated as function-based, and the relevant HSN notes showed that Heading 89.05 covers vessels that ordinarily perform their main function in a stationary position and whose navigability is only incidental. On the facts, the primary use of the vessel was to provide accommodation to personnel working on offshore platforms, while movement on water was only subsidiary. The plea based on classification of another vessel in a different case was rejected, as there is no estoppel in fiscal matters. The cited Supreme Court decision was distinguished as it did not concern tariff classification based on primary function.

Conclusion: The vessel was correctly classified under Heading 89.05, not Heading 89.01, and the exemption claim failed.

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