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of <h1>Court exempts vessel breaking from duty under Notification No. 74/93 due to nil Excise Duty. Petitioners cleared upon payment.</h1> The court ruled in favor of the petitioners, finding that the vessel brought in for breaking up was exempt from additional duty under Notification No. ... Countervailing duty (Additional duty of Customs) Issues:1. Liability to pay additional duty for a vessel brought in for breaking up.2. Interpretation of Notification No. 74/93 and Notification No. 167/86-C.E.3. Applicability of General Exemption No. 41 to the Central Excise Tariff Act, 1985.4. Construction of Section 3 of the Customs Tariff Act, 1975.Analysis:Issue 1: Liability to pay additional dutyThe petitioners argued that the vessel brought in for breaking up should be exempt from additional duty as per Notification No. 74/93. They contended that the conditions for exemption were met, and additional duty should be considered part of 'duties of customs.' The petitioners also emphasized the Finance Minister's speech, stating that the notification aimed to provide relief to the ship breaking industry. They challenged the reliance on an earlier notification, arguing that it had been superseded by Notification No. 74/93.Issue 2: Interpretation of NotificationsThe petitioners further argued that the additional duty was specified in Annexure 1 to the First Schedule of the Customs Tariff Act, 1975. They highlighted that the levy of additional duty was under Sections 1 and 2 of the Customs Act, 1962, and should only be under the First Schedule to the Tariff Act, 1975. The court considered the language used in the notifications and the applicability of additional duty under the relevant provisions.Issue 3: Applicability of General ExemptionThe petitioners relied on General Exemption No. 41 under the Central Excise Tariff Act, 1985, which exempted goods falling within Chapter 89, including vessels brought in for breaking. They argued that since the rate of Excise Duty for vessels brought in for breaking was nil, the rate of additional duty should also be nil. The court analyzed the language and applicability of the exemption in relation to the vessel in question.Issue 4: Construction of Section 3 of the Customs Tariff ActThe court based its decision on the construction of Notification No. 167/86-C.E., dated 1-3-1986, and Section 3 of the Customs Tariff Act, 1975. The court noted that the rate of Additional Duty was linked to the rate of Excise Duty and that since the Excise Duty for the relevant Tariff Item was nil, the Additional Duty should also be nil. The court allowed the writ application, setting aside the Order of Assessment imposing Additional Duty on the vessel.In conclusion, the court ruled in favor of the petitioners, allowing them to dismantle and clear the dismantled parts of the vessel upon payment of duty as per Notification No. 74/93. The court discharged the Bank Guarantee if the petitioners had already paid the duty. The judgment was stayed for two weeks upon the request of the respondents.
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