Exemption for spare parts of warships upheld where Coast Guard interceptor boats were treated as warships under the notification.

Spare parts supplied for interceptor boats used by the Coast Guard qualified for exemption under Notification No. 12/2012-Cus because the exemption entry for spare parts and consumables for repairs of ocean-going vessels expressly included warships of all kinds within that expression. The boats were found to be deployed for coastal security, equipped with arms and ammunition, and certified by the Ministry of Defence as warships. On that factual basis, the spare parts supplied for them fell within Serial No. 460, and the alternative claim under Serial No. 469A did not require examination. Denial of the exemption was therefore unsustainable.

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Issues: Whether spare parts supplied for interceptor boats used by the Coast Guard were eligible for exemption under Serial No. 460 of Notification No. 12/2012-Cus dated 17.03.2012 on the footing that the boats were warships.

Analysis: The exemption entry covered spare parts and consumables for repairs of ocean going vessels registered in India, and the explanation expressly included warships of all kinds within the expression "ocean going vessels". On the material placed, the interceptor boats were found to be deployed for coastal security, equipped with arms and ammunition, and certified by the Ministry of Defence as warships. Once the boats were treated as warships, the spare parts supplied for them fell within the exemption entry. It was therefore unnecessary to examine the alternative claim under Serial No. 469A.

Conclusion: The exemption was available and the denial of benefit under Serial No. 460 was unsustainable.

Ratio Decidendi: Where an exemption entry for spare parts of ocean going vessels expressly includes warships, spare parts supplied for boats established to be warships qualify for the exemption.

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