Customs exemptions for vessel-breaking imports: special additional duty, ship stores, and assessable value claims all failed.

Exemption from special additional duty was unavailable for an old vessel imported for breaking because the goods were not sold "as such"; the vessel was demolished and only the resulting scrap was sold, so the levy stood. Fuel and oil kept in engine room tanks were separately classifiable rather than part of the vessel, and duty was correctly imposed. Foodstuff and consumable stores were not exempt ship stores under section 87 once the vessel lost its foreign-going character on import for breaking, so the duty demand stood. No abatement was allowable for surrendered liquor and cigarettes because they were excluded from the sale and formed no part of the bargain price.

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Issues: (i) Whether special additional duty was leviable on an old vessel imported for breaking and whether exemption under the relevant notification was available; (ii) whether fuel and oil in the engine room tanks were classifiable separately and liable to duty; (iii) whether foodstuff and consumable stores on the imported vessel were exempt under section 87 of the Customs Act, 1962; (iv) whether abatement in assessable value was admissible for surrendered liquor and cigarettes.

Issue (i): Whether special additional duty was leviable on an old vessel imported for breaking and whether exemption under the relevant notification was available.

Analysis: The exemption for special additional duty applied only where imported goods were sold "as such". A vessel imported for demolition is not sold as such; it is broken up and only the resulting material is sold. The Tribunal followed its earlier decision on the same issue and declined to prefer a different outcome based on sales-tax precedent under a different statute.

Conclusion: Exemption from special additional duty was not available and the levy stood upheld against the appellant.

Issue (ii): Whether fuel and oil in the engine room tanks were classifiable separately and liable to duty.

Analysis: The Board's circular distinguished fuel and oil forming an integral part of the vessel from remaining fuel and oil kept in tanks. The latter were required to be classified in their own appropriate headings and could not be treated as part of the vessel.

Conclusion: Duty on fuel and oil in the engine room tanks was correctly levied separately against the appellant.

Issue (iii): Whether foodstuff and consumable stores on the imported vessel were exempt under section 87 of the Customs Act, 1962.

Analysis: Section 87 applies to stores consumed on board a foreign going vessel. Once the vessel was imported for breaking, it no longer retained that character. Foodstuff and consumable stores therefore could not be treated as exempt ship stores.

Conclusion: The claimed exemption under section 87 was unavailable and the duty demand was upheld against the appellant.

Issue (iv): Whether abatement in assessable value was admissible for surrendered liquor and cigarettes.

Analysis: The surrendered liquor and cigarettes had been excluded from the sale and no consideration had been paid for them. Since they were not part of the bargained sale value, no abatement from the assessable value was warranted.

Conclusion: Abatement was not allowable and the assessable value was correctly maintained against the appellant.

Final Conclusion: All substantive grounds failed, and the impugned assessment and appellate orders were left undisturbed, resulting in rejection of the appeal in full.

Ratio Decidendi: Exemption from special additional duty for imported goods applies only when the goods are sold in the same form as imported, while stores and consumables on a vessel imported for breaking are not exempt as ship stores and separately classifiable items remain dutiable.

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