2015 (9) TMI 369 - AT - Customs

Tribunal grants appeal, cancels fines for vessel classification violation under ITC policy.

The Tribunal allowed the appeals for early hearing and set aside the redemption fine and penalties imposed on the appellants for violating the ITC policy ... Classification of Vessel with surplus fuel under CTH 8908 – Appellants filed bills of entry for clearance of vessels alongwith surplus fuel to be classifiable under CTH 8908 – Vide impugned order redemption fine and penalties in respect of importation of vessels for breaking purpose along with surplus fuel was imposed – Held that:- Tribunal on identical issue in case of A G Enterprises and Others vs. Commissioner of Customs (Prev.) Jamnagar [2014 (8) TMI 44 - CESTAT AHMEDABAD] held that as per clarification/opinion of Joint DGFT, surplus fuel stored in fuel tanks of vessels/ship brought for breaking up is classifiable under 89.08 along with main vessel – Well settled law that clarifications on Import Policy issued by office of DGFT is binding on Customs – As imports under ITC(HS) 89.08 are free without any restrictions, therefore, such MGO/HSD contained in vessels brought in for breaking up, cannot be held as liable for confiscation under Customs Act, 1962 and no penalties upon appellants are imposable – In view of decision of Tribunal appeals are allowed –Decided in favour of Assesse. Issues involved:- Early hearing of appeals- Setting aside redemption fine and penalties- Classification of imported vessels- Violation of ITC policy- Confiscation of goodsEarly Hearing of Appeals:The applicants filed applications for early hearing of the appeals, which were considered by the Tribunal. After a detailed hearing, it was decided that the appeals could be disposed of at that stage.Setting Aside Redemption Fine and Penalties:The appellants filed appeals seeking to set aside the redemption fine and penalties imposed on them. The Tribunal noted that a common issue was involved in all the appeals, and therefore, they were taken up together for disposal.Classification of Imported Vessels:The appellants imported vessels for breaking purposes and filed bills of entry classifying remnant bunkers and provisions/stores under respective tariff headings. The Marine Gas Oil (MGO) and High Speed Diesel (HSD) were cleared on duty payment. The adjudicating authority confiscated the goods for violating the ITC policy and imposed redemption fine and penalty.Violation of ITC Policy:The Tribunal referred to a previous decision where redemption fine and penalty were set aside in a similar case. It was highlighted that surplus fuel stored in fuel tanks of vessels brought for breaking up was classifiable under a specific tariff heading as an integral part of the vessel, as per an opinion from the Director General of Foreign Trade (DGFT).Confiscation of Goods:Based on the clarification issued by the Joint DGFT, it was concluded that the imports under the relevant tariff heading were free without restrictions. Therefore, the MGO/HSD contained in the vessels brought in for breaking up could not be confiscated under the Customs Act, and no penalties were imposable on the appellants. Following the previous decision and the opinion of the DGFT, the appeals were allowed with consequential relief.This judgment emphasizes the importance of proper classification of imported goods, adherence to ITC policies, and the binding nature of clarifications issued by relevant authorities in determining the legality of imports and associated penalties.