Ship stores exemption applies to zinc ingots supplied for Navy vessel use through sacrificial anode manufacture.

Zinc ingots supplied to the Indian Navy for manufacture of sacrificial anodes were treated as ship stores eligible for exemption under Notification No. 64/95-C.E. The inclusive meaning of "stores" under Section 2(38) of the Customs Act was applied to goods meant for use in a vessel, and Navy certification was accepted as evidence that the ingots were exclusively for use on board. The fact that the ingots required further manufacture before final use did not defeat the exemption, because the notification condition was regarded as satisfied when the supply was for consumption on board vessels.

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Issues: Whether zinc ingots supplied to the Indian Navy for use in the manufacture of sacrificial anodes qualified as ship stores for the purpose of exemption under Notification No. 64/95-C.E. and could not be denied exemption merely because they were not directly consumed as such on board the vessel.

Analysis: The relevant statutory meaning of "stores" under Section 2(38) of the Customs Act, 1962 is an inclusive one, covering goods for use in a vessel or aircraft. The zinc ingots were supplied against a Navy certificate stating that they were exclusively used in the manufacture of sacrificial anodes, which in turn are used on board vessels to protect the hull from corrosion. The certificate was treated as sufficient evidence that the goods were for use in the vessel, and the fact that the ingots underwent manufacture before final use did not disqualify them from the exemption. The condition in the notification was read as satisfied where the goods were supplied as stores for consumption on board, supported by the Navy certification.

Conclusion: The zinc ingots were held to fall within the exempted category of stores for use on board Indian Navy vessels, and denial of exemption was not justified.

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