Classification of marine gas oil in ship breaking-Apex Court precedent governs and reverses separate oil classification.

Classification of marine gas oil found aboard vessels sent for breaking concerned whether such fuel is an integral part of the ship or a separate taxable commodity for customs tariff purposes. The tribunal applied appellate precedent and accepted that the Apex Court's decision on identical facts governs the classification question, resulting in treatment of the bunker/marine gas oil consistent with that precedent and reversal of the revenue's separate oil classification. The operative effect is that bunker fuel on ships destined for breaking is not to be treated separately for tariff classification where the binding higher court decision holds otherwise.

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Issues: Whether the oil (marine gas oil) present in bunker tanks of a vessel brought for breaking up is to be assessed separately as oil or treated as part of the ship for classification and assessment.

Analysis: The determining question is whether the oil carried in the vessel's bunker tanks should be treated independently under tariff provisions for oil or as an integral component of the ship when the vessel is imported for breaking. The Tribunal considered the authoritative decision of the Apex Court addressing identical issue and followed its holding that the later view - treating the oil as part of the ship for assessment when the vessel is sent for scrapping - is correct. The earlier contrary view of separate assessment was disapproved by that higher court, and the Tribunal applied that precedent to the facts before it.

Conclusion: The oil in the bunker tanks is to be assessed as part of the ship; the appeal is allowed in favour of the appellant.

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