Exemption for Navy vessels: inclusive meaning of vessel prevented a narrow ship-versus-boat distinction from defeating relief.

An exemption notification referring to ships was interpreted broadly to include boats and whalers used for construction for the Indian Navy, because the statutory meaning of vessel is inclusive and covers ships, boats and other descriptions used in navigation. The notification could not be read narrowly to exclude boats where the end use was for Navy vessels. On that basis, goods required for construction of or fitment to Navy vessels were treated as eligible for exemption, and the revenue's challenge failed.

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Issues: Whether woven rowing imported for construction of boats and whalers for the Indian Navy was entitled to exemption under Notification No. 150/94-Cus. as goods required for construction of or fitment to ships of the Indian Navy.

Analysis: Chapter 89 describes the goods covered by the tariff under the broad rubric of ships, boats and floating structures, and the terms ship, boat and vessel are used in an inclusive sense. The notification used the expression ships, but the Court held that the certificate's reference to boats and/or whalers did not justify a narrow exclusion. Reliance was placed on the inclusive meaning of vessel in Section 3(63) of the General Clauses Act, under which vessel includes any ship, boat or other description of vessel used in navigation. On that basis, no proper distinction could be made between ship and boat for the purpose of the exemption when the ultimate beneficiary was the Indian Navy.

Conclusion: The exemption under Notification No. 150/94-Cus. was available and the Revenue's appeal failed.

Ratio Decidendi: An exemption notification referring to ships may cover boats and other vessels where the statutory context adopts an inclusive meaning and the intended end use is for the Indian Navy, so a narrow ship-versus-boat distinction cannot defeat the exemption.

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