2023 (4) TMI 1250 - SCH - Customs

Valuation of bunker oil in scrapped vessels upheld as part of ship value; revenue appeals dismissed

Valuation addressed whether bunker oil in engine room or external bunker tanks of vessels sent for breaking up should be assessed separately or as part of ... Valuation - Oil in the Bunker Tanks of the Engine Room/outside the Engine Room of the vessels sent for being broken up, are to be assessed separately or as part of the vessels to be scrapped? - HELD THAT:- In the appeals preferred by the Revenue, which are directed against the orders of the CESTAT in NAVYUG SHIP BREAKING CO., DHAN STEELS PRIVATE LIMITED. AND OTHERS VERSUS C.C., JAMNAGAR (PREV) [2022 (12) TMI 100 - CESTAT AHMEDABAD], the CESTAT ruled that the oil is to be assessed as part of the Ship. The Revenue’s appeals are, accordingly, dismissed. Issues:The issue involves the assessment of oil in the bunker tanks of vessels sent for scrapping, whether to be assessed separately or as part of the vessels to be scrapped.Judgment Details:The Supreme Court heard appeals by the Revenue against two orders of the Customs Excise & Service Tax Appellate Tribunal (CESTAT) dated 16.02.2022 and 01.12.2022. The CESTAT had ruled that the oil in the bunker tanks is to be assessed as part of the ship. However, in a previous appeal, the CESTAT had ruled differently, stating that both the articles should be separately assessed.After considering both orders and submissions, the Court concluded that the later view expressed in the orders dated 16.02.2022 and 01.12.2022 is correct. The Court dismissed the Revenue's appeals. Any pending interlocutory applications were disposed of accordingly.In a separate judgment related to Civil Appeal Nos. 5318-5342/2009, the civil appeals were allowed based on the reasons stated in the main order. Any pending interlocutory applications in this matter were also disposed of.