Tribunal denies duty exemption for ship parts due to incorrect duty rate under Notification

The tribunal upheld the lower authority's decision that the appellant is not entitled to the exemption under Notification No. 103/87-C.E. for goods obtained from breaking up of a ship. Despite paying the correct duty rate during importation, it was not at the rate specified in the notification, which requires customs duty to be paid at a specified rate per light displacement tonnage (LDT). As the ships were imported before the specified rate came into effect, the tribunal ruled that the appellant did not meet the conditions of the notification and therefore rejected the appeal.

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Issues: Availability of exemption under Notification No. 103/87-C.E. for goods obtained from breaking up of a ship.

Analysis:
The dispute in the present appeal revolves around the availability of exemption under Notification No. 103/87-C.E. for goods obtained from breaking up of a ship cleared by the appellant during a specific period. The notification requires that the ship from which the goods are obtained should have paid customs duty at a specified rate per light displacement tonnage (LDT). The appellant imported the ships around September '85 when the duty rate was lower than the specified rate. The appellant argues that since they paid the duty at the prevailing rate during importation, they should be entitled to the notification's benefit. However, the tribunal does not agree with this contention.

The tribunal points out that even though the appellant paid the correct duty rate at the time of importation, it was not at the rate specified in the notification. The notification clearly states that goods must be obtained from a ship on which customs duty has been paid at the specified rate per LDT. As the ships were imported before the specified rate came into effect, the condition of the notification is not met. Therefore, the tribunal upholds the lower authority's decision that the appellant is not entitled to the notification's benefit.

In conclusion, the tribunal rejects the appeal, emphasizing that the condition of the notification regarding the payment of customs duty at the specified rate per LDT must be met for the exemption to apply. The appellant's argument that they paid duty at the prevailing rate during importation is deemed insufficient to qualify for the notification's benefit.

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