Classification of bunker tank oil follows the vessel as an integral part, not separate petroleum goods under customs heading law.

Oil contained in bunker tanks in the engine room of a vessel imported for breaking up is treated as an integral part of the vessel because it is associated with the ship's machinery and engine. It is therefore not classified independently under Heading 2710, but is classified with the vessel under Heading 8908 00 00. The Tribunal followed binding jurisdictional High Court precedent, noted consistent earlier Tribunal rulings, and held that a departmental circular cannot override that precedent. The absence of an appeal against the High Court rulings on monetary-limit grounds did not affect their binding force.

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Issues: Whether oil contained in bunker tanks in the engine room of a vessel imported for breaking up is classifiable independently under Heading 2710 or along with the vessel under Heading 8908 00 00.

Analysis: The issue was already settled by the jurisdictional High Court, which held that oil contained in bunker tanks in the engine room of a vessel imported for breaking up is associated with the machinery and engine of the ship and forms an integral part of the vessel. On that basis, such oil is not to be assessed independently under Heading 2710 but is to be classified with the vessel under Heading 8908 00 00. The Tribunal also noted that this view had been followed in earlier Tribunal decisions and that a departmental circular cannot prevail over binding judicial precedent. The fact that no appeal was filed against the High Court rulings on monetary-limit grounds did not detract from their binding force.

Conclusion: The oil contained in bunker tanks in the engine room is classifiable with the vessel under Heading 8908 00 00 and not independently under Heading 2710, in favour of the assessee.

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