2019 (11) TMI 128 - AT - Customs

Imported vessel classified under heading 8903 for casino use upheld by Tribunal.

M/s. Advani Pleasure Cruise Co. P. Ltd. Versus Commr. of Customs (I), Nhava Sheva

The Tribunal upheld the classification of the imported vessel under heading 8903 as determined by the impugned order, dismissing the appeal. The decision ... Classification of imported goods - second hand/ used Casino Ship M V Majesty - whether classified under 8901? - HELD THAT:- It is settled law that imported goods are to be assessed in the form and manner in which they are imported and presented for assessment/clearance to the Customs authority at the port of importation for the clearance - Hence the classification of the imported goods needs to be determined in accordance with the form in which they were presented for assessment to the customs authority, and not in the form they were designed and in the form they earlier existed. From the examination report reproduced above it is quite evident that casino games have been fitted on all the three decks of the vessel, and the layout of the decks including those of chairs and stools on the deck was to facilitate the playing of those casino games. Once the vessel is fitted with such casino games across the entire three decks with no regular seating plan etc., the same cannot be called a passenger ship. It is also not case of appellant that there is a fare charged by the appellant for the voyages that can be undertaken on the vessel imported. It is settled law that classification of goods under the Customs tariff is to be determined by the Custom Authorities and for determining the classification the Custom Authorities are bound by the Terms of Entries in the Tariff, Rules of Interpretation and decisions rendered by the competent courts in relation to the interpretation of tariff. The view taken by other authorities acting under other Acts and Legislation may have persuasive value for determining the classification under the Customs Tariff but cannot be termed as in any case binding on the Customs Authority for determining the classification. For determining the classification of the imported vessel will be as to what would be the usage of such vessel. If this question is put to the person who goes to the vessel and his response is that he visits the vessel for playing casino games and not for cruise/ voyage then the vessel is definitely a pleasure vessel for the purpose of classification under Custom Tariff - In the present case examination report clearly suggests that on all the three decks of vessel are fitted casino games and the entire layout was to facilitate the playing of such games without any regular arrangement/ seating plan for carriage of passengers. From the scheme of Chapter 89 of the Customs Tariff it is clearly evident that the Chapter has been totally aligned with HSN upto six digit level. Appeal dismissed - decided against appellant. Issues Involved:1. Classification of the imported vessel.2. Applicability of duty under the correct Customs Tariff Heading (CTH).3. Determination of the vessel’s status as a passenger ship or a pleasure vessel.4. Relevance of modifications to the vessel for classification purposes.5. Interpretation of relevant statutes and judicial decisions.Issue-wise Detailed Analysis:1. Classification of the Imported Vessel:The primary issue was whether the imported vessel, M V Majesty, should be classified under Chapter subheading 89039990 (vessels for pleasure or sports) or under Chapter subheading 89011010 (passenger ships). The Assistant Commissioner of Customs (Import) classified the vessel under 89039990, which was upheld by the Commissioner (Appeals). The appellants contended that the vessel, originally designed as a passenger ship and later modified to a casino ship, should retain its classification as a passenger ship under 89011010.2. Applicability of Duty Under the Correct Customs Tariff Heading (CTH):The Assistant Commissioner ordered that the importer is liable to pay the applicable duty under CTH 89039990, appropriating an amount of Rs. 22,994,015/- paid by the importer towards this duty. The appellants argued that the classification should be based on the vessel’s original design and not its subsequent use as a casino ship, citing the Supreme Court’s decision in Vipul Shipyard, which stated that classification should not be based on end use.3. Determination of the Vessel’s Status as a Passenger Ship or a Pleasure Vessel:The vessel was examined on a first check basis, revealing that it was equipped with several casino games, slot machines, and table games occupying all three decks, with chairs arranged around these games rather than for passenger excursions. The Customs authority concluded that the vessel was exclusively meant for use as a casino/pleasure vessel, thus classifying it under heading 8903. The appellants relied on certificates and definitions from the Merchant Shipping Act to argue that the vessel should be considered a passenger ship.4. Relevance of Modifications to the Vessel for Classification Purposes:The appellants argued that subsequent modifications to the vessel should not impact its classification, citing the Tribunal’s decision in Urmila & Co Pvt Ltd. However, the Customs authority maintained that the classification should be based on the vessel’s form and manner at the time of importation, as per the Supreme Court’s decision in Sony India. The examination report confirmed that the vessel’s layout and fittings were tailored for casino activities, supporting the classification under heading 8903.5. Interpretation of Relevant Statutes and Judicial Decisions:The Tribunal considered various judicial decisions, including those in Waterways Shipyard Pvt Ltd, Ashok Khetrapal, and Drishti Adventures Pvt Ltd, which emphasized that vessels fitted for pleasure activities should be classified under heading 8903. The Tribunal also referred to the Harmonized System of Nomenclature (HSN) explanatory notes and relevant entries in the Customs Tariff, concluding that the vessel’s classification should align with its use for pleasure activities at the time of importation.Conclusion:The Tribunal upheld the classification of the imported vessel under heading 8903 as determined by the impugned order, dismissing the appeal. The decision was based on the vessel’s configuration and use for casino activities, aligning with the principles of classification under the Customs Tariff and relevant judicial precedents.