TaxTMI 
TaxTMI 
2015 (2) TMI 738
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....Offshore Pvt. Ltd. (HIPL in short) under CTH 89051990 as 'Seismic Survey Vessel'. He has imposed penalties on the following appellants under various provisions of the Customs Act (for their involvement in the transaction) as detailed below:- S. No Name of the appellant(s) Penalties (in Rs.) imposed under Section 114A 112(a) 114AA 1 Hind Offshore Pvt Ltd 9,24,04,082/- - - 2 M.C. Kshirsagar, Managing Director of HIPL - 50 Lakhs 80 lakhs 3 Hasan Abdulkadir Mapari, Manager (Operations) HIPL - 10 lakhs - 4 J.M. Baxi & Co CHA - 50 lakhs - 5 Arya Offshore Services P. Ltd. appointed by the CHA - 25 lakhs - 6 Rajendra Devadiga, Manager Operations of Arya Offshore Services P Ltd - 10 lakhs - 7 Hemant Kumar Joshi, Surveyor of the Indian Register of Shipping - 2 lakhs - Aggrieved of the same, the appellants are before us. 2. The submissions made by the Ld. Counsel for the appellant can be summarised as below:- (a) Dispute pertains to classification of the vessel "Geo Hind Sagar" imported by the appellant, which according to them is classifiable under CTH 8906 of the Customs Tariff whereas the department's content....
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....nd these are, - Navigational Equipment, Seismic Survey/Research Equipment comprising of air guns, streamers, Seismic Data recording and processing equipment, facility for the personnel such as geo-physicists, etc., required for processing of seismic data and analysis. The details of various equipment are given in the technical specifications for the vessel which consists of Safety equipment, Seismic recording instrument, Deck machinery, Navigation Aids, Streamers, Energy source communication and Onboard processing. (e) In particular the valuation report given by Sugao Shipping Japan while classifying the vessel as a 'seismic survey vessel' against Sr. No. 10 gives the details of the navigation equipment which consist of GMDDS, GPS, Radars, Gyro, Wind sensor, Navigatgion Echo Sounder, Electronic Chart, Sonar, Tow system and so on. (f) The Charted Engineer's Certificate dated 7/10/2012 in respect of vessel also gives the vessel particulars and concludes that "Geo Hind Sagar" has to perform her task of conducting the research of sea bed by navigating a vast survey area running into hundreds of kilometres. The navigation of vessel is an important requirement for the activ....
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.... is subsidiary to their main function". As per HSN Explanatory Notes, vessels falling under Heading 8905 normally perform their main function in a stationary position and they include light vessels, drill ships, fire floats, dredgers of all kinds, salvage ships for the recovery of sunken vessels, permanently moored air/sea rescue floats, bathyscaphes, pontoons fitted with lifting or handling machinery and so on. The vessel in question does not perform its main function of survey/research in a stationary position and the navigational ability of the vessel can not be considered to be subsidiary to its main function. On the other hand CTH 8906 is the residuary entry covering all other vessel not covered by heading 8901 to 8905. In particular, it covers scientific research vessels as is evident from the HSN Explanatory Notes. Therefore, the vessel merits classification under CTH 8906 attracting 'nil' rate of duty. Accordingly he pleads for allowing the appeals. 2.1 The Ld. Counsel for the CHA, J.M. Baxi & Co., their agent, M/s. Arya Offshore Service P. Ltd. and Shri Rajendra Devadiga, Manager (Operations) submits that they had filed the bill of entry and connected import docum....
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....involves a ship towing a seismic source and is therefore akin to a tug. The seismic survey work undertaken is designed to identify oil exploration targets and therefore, such a vessel can not be considered as a research vessel. Further notification no. 21/2002-Cus dated 1/3/2002 grants exemption to seismic survey vessels subject to obtaining certificate from the Directorate General of Hydrocarbon, if used for oil exploration work. This would also imply that the goods are otherwise dutiable. It is also submitted that in the memorandum of agreement for sale the vessel and the bill of sale dated 10/12/2009, the vessel has been described as a seismic survey vessel. In the application made by the appellant to the Government of India, Ministry of Shipping for the purpose of registration, the appellant has declared the vessel as a seismic survey vessel and even in the technical information pertaining to the vessel, it has been described as a seismic survey vessel. It is accordingly contended that being seismic survey vessel, it can not be equated with a research vessel and therefore, the vessel would merit classification under CTH 8905. Consequently the duty demand confirmed in the impugn....
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.... Central Excise, Shillong vs. Wood Craft Products Ltd 1995 (77) E.L.T. 23 (SC) that for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN. 4.3 From the various certificates given by the authorities (both in India and abroad) including Indian Registry of Shipping and the professional surveyors who have undertaken the examination and classification of the vessel, the vessel in question is a "seismic research vessel". Seismic research is scientific research and therefore, the vessel is a scientific research vessel. There is no evidence produced by the Revenue to the contrary by way of any expert opinion and therefore, the contention of the Revenue that the vessel merits classification under CTH 8905 does not have any sound basis and accordingly, we reject this contention. An argument has been advanced by the Revenue to the effect that a survey vessel cannot be equated with a research vessel. We do not find any rational basis for this argument. The purpose of any scientific survey is to gather reliable data and from the analysis of the data, scientifically valid conclusions can be drawn. Thus collec....