TaxTMI 
TaxTMI 
2011 (12) TMI 127
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....Advani Hotels & Resorts India Ltd. (M/s. AHRIL) and Casino Austria International, had undertaken the activity of interior design of the vessel for Casino and entertainment activity at the yard of M/s. WSPL and had taken the said vessel from M/s. WSPL on lease basis for the period of 5 years. Because of special type of fittings the said vessel acquired status of pleasure vessel. The department initiated inquiries and investigation for the purpose of classification of the vessel in question under the Central Excise Tariff Act. 4. Shri Narendra Punj, the Casino Director of the said vessel in his statement recorded on 27th March 2001 admitted that the said vessel is engaged in Casino gaming activities.In view of this Revenue believed that the said vessel would be appropriately classifiable under Central Excise Heading 8903.00 of CET, being a vessel meant for pleasure and not for transporting passengers. Accordingly, the said vessel was seized by the department under panchanama on 27th March 2001 from possession of M/s. Advani Pleasure Cruise Pvt. Ltd. However, the vessel was ordered to be released by the High Court vide its order dt. 22.4.2001. 5. Investigation ....
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....ssification which specifically states that heading covers the vessel for pleasure or sports and all rowing boats and canoes. From the investigation department took a view that the said vessel is a casino gambling establishment specially designed for live casino gaming activities and therefore rightly classifiable under Chapter heading 8903.00 of the Central Excise Tariff Act, 1985 and attracts Central Excise duty. 7. Accordingly, a show-cause notice was issued to M/s. WSPL, M/s. AHRIL, M/s. APCPL and Shri Sunder G. Advani Managing Director of M/s. AHRIL proposing the classification of the goods under sub-heading 8903.00 and demanding the appropriate duty and also proposing penalty provisions against the noticees. The show-cause notice was contested by all four notices, Commissioner of Central Excise Goa vide the impugned order has dropped the proceedings initiated against the noticees and has ordered the classification of the vessel under 8901.00 of the Central Excise Tariff. Against the said order the Revenue has filed the present appeal. 8.(i) The learned Commissioner (A.R.) appearing for the Revenue submitted that the adjudicating authority h....
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....es of Interpretation, inasmuch as he directly resorted to Rule 4 for determining the classification of the vessel, without considering and eliminating the appreciation of Rule 1,2,&3 of the said Rules of Interpretation. The learned Commissioner also referred to para 30 of the show-cause notice referring to the Supreme Court decision in the case of C.C.E Shillong Vs. Woodcraft Products Ltd. reported in 1995 (770 ELT 23 9 (SC) wherein it was held that for resolving dispute relating to Tariff classification, a safe guide is the internationally accepted nomenclature structure of the Central Excise Tariff Act, and the Tariff Classification made therein. In case of any doubt, the HSN is the safe guide for ascertaining the true meaning of any expression used in the Act. As per HSN explanatory notes the vessel in question should be classified under Heading 8903 only. He also referred to the para 4.2 (v) para 7.6 and para 12.3 of lease agreement between M/s. WSPL & M/s. AHRIL under which M/s. AHRIL had unrestricted control of the area for the purpose of casino games. He concluded his submissions stating that the vessel in question is correctly classifiable under Head....
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....essel had not been defined in the Indian Shipping Act but it has been clearly defined in UK, Australia and Canada. He referred to the definition of pleasure vessel given in the UK Statutory Instruments and Principal Merchant Shipping Act, wherein a pleasure vessel means any vessel which at the time it is being used is wholly owned by an individual or individuals and used only for the sport or pleasure of the owner or the immediate family or friends of the owner. If it is owned by a body corporate it is used only for sport or pleasure and on which the persons on board are employees or officers of the body corporate. Similarly he read over the definition of pleasure vessel under the Western Australian Marine Act, under which the pleasure vessels is a vessel held wholly for the purpose of recreational or sporting activities and not for hire or reward. He further referred to the definition of pleasure vessels under the Canadian law under which a pleasure vessel is a vessel used by individuals for their pleasure for recreational or sporting purpose and not for any commercial purpose. The learned Advocate also referred to the various advertisement materials in res....
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....lly designed and manufactured for the purpose of transport of persons or goods it cannot be classified under heading 8901. We find that Entry 8901 of the HSN is as under:- 89.01 - Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods. 8901.10 - Cruise ships, excursion boats and similar vessels principally designed for the transport of persons; ferry-boats of all kinds 8901.20 - Tankers 8901.30 - Refrigerated vessels, other than those of sub-heading 8901.20 8901.90 - Other vessels for the transport of goods and other vessels for the transport of both persons and goods. This heading covers all vessels for the transport of persons or goods, other than vessels of heading 89.03 and lifeboats (other than rowing boats), troop-ships and hospital ships (heading 89.06); they may be for sea navigation or inland navigation (e.g. on lakes, canals, rivers. estuaries). The heading includes: (1) Cruise ships and excursion boats. (2) Ferry-boats of all kinds, including train-ferries, car-ferries and small river-ferries. (3)........ (4)......... (5)......... (6)......... (7).......
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....sports fishing vessels, inflatable craft and boats which can be folded or disassembled. The heading also covers lifeboats propelled by cars (other lifeboats fall in heading 89.06). Sailboards are, however, excluded (heading 95.06). Heading 8903 is meant for yachts and other vessels for pleasure or sports and rowing boats and canoes. As per HSN explanation under the heading, this heading covers all vessels for pleasure or sports and all rowing boats and canoes, which means that all vessels which are used for pleasure or sports are to be classified under Heading 8903 and similarly all rowing boats and canoes are to be classified under heading 8903. The use of word 'all' before 'vessels' in the 'all vessels for pleasure or sports' means that all vessels which are used for pleasure or sports are to be classified under heading 8903 even if these vessels are used for transport of persons or goods in view of their exclusion from 8901 as per HSN explanation under heading 8901. 14. Under the Merchant Shipping Act, 1958 'passenger' and the 'passenger ships' have defined under Section 3(24) & 3(25) which are as under:- 3(24) 'passenger' means any p....
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....amily and the employee of the body corporate. Since the vessel does not fall under this category this cannot be classified as vessel for pleasure or sports. We find that definition of the vessel for pleasure or sports has not been incorporated in the Indian Merchant Shipping Act, which governs the registration and movement of the vessels in India. On the other hand, the Merchant Shipping Act specially defines Special Trade Passenger Ship and present vessel in question has been categorized as special trade passenger ship. The present vessel is used for casino games for people who are transported by the ferry to the vessel by the owner/lessee of the vessel. These activities fall under the category of special trade as defined under the Indian Merchant Shipping Act and would therefore be taken as a activities for the purpose of casino games, which are meant for pleasure of the people. Therefore, this would bring the vessel more appropriately under the heading 8903 of the Central Excise Tariff. 17. Another argument taken by the respondent is that on the basis of Nosciture A Socciis the Commissioner has rightly held classification under heading 8901 as ar....
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....sential character of the complete or finished goods. It shall also be taken to include a reference to those goods complete or finished (or falling to be classified as completed or finished by virtue of this rule), removed unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partially of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles contained in rule 3. 3. When by application of sub-rule (b) or rule 2 or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods o....