Excise exemption for ocean-going vessels depends on their character at manufacture, not later inland-water use.

Excise duty liability arises at the stage of manufacture, so the relevant question was whether the vessels were ocean-going vessels when duty became chargeable. The vessels were built and equipped for sea travel, and contractual terms, voyage permissions, and shipping law supported that character at the time of manufacture. Their later use as barges in inland waters did not change their original classification or defeat the exemption. The vessels were therefore entitled to exemption from excise duty as ocean-going vessels, and the revenue challenge failed.

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Issues: Whether the vessels manufactured by the assessee were entitled to exemption from excise duty as ocean-going vessels, and whether their subsequent use in inland waters could deny the exemption.

Analysis: Excise duty is attracted at the stage of manufacture. The vessels were built and equipped for traversing the ocean, and the contractual stipulations, permissions to voyage on the open sea, and the relevant shipping law supported their character as ocean-going vessels at the time the duty liability arose. Their later use as barges in inland waters did not alter that character or defeat the exemption.

Conclusion: The vessels were correctly held to be ocean-going vessels entitled to the exemption from excise duty, and the Revenue's challenge failed.

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