TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 998
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....9; earlier known as 'Salwa" from Kuwaiti oil Tanker company, Kuwait in the year 2008. The vessel was registered with Kuwaiti Registry on 02/05/1994 as a supply vessel. The vessel was brought to India and registered with the Mercantile Marine Department which is the Registrar of Indian Ships under the Merchant Shipping Act, 1958 on 2.9.2008 as on 'offshore supply vessel'. After physical first check examination by the Customs, the vessel was cleared under CTH 8901 1010 attracting nil duty under customs notification 21/2002 (serial number 352) and nil SAD under notification 20/2006 (serial number 1). After four years, on the basis of intelligence and investigations, the Department viewed that the classification of the vessel had been mis-declared and the correct classification should be CTH 8904 0000 as a tug. Since the vessel was engaged abroad, the appellant could not present the vessel for scrutiny and paid customs duty of Rs. 1,19,27,707/- under protest. Thereafter the vessel was seized under section 110 (1) of the Customs Act on 3.7.2012 and released on provisional basis on furnishing of bank guarantee for Rs. 63,74,363/- and a bond of Rs. 12,74,87,250. After issue of....
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....ct dated 13.7.2011 with the consortium of Valentine Marine and Valentine Maritime (Mauritius) Ltd clearly states that it was engaged for offshore duties / services. 4.2. According to the appellant the Commissioner relied on Rule 3 (c) of the Rules for Interpretation of Classification to hold that the vessel is classifiable as a tug. While reaching this conclusion the Commissioner stated that Rules 1, 2 and 3 (a) or (b) are not applicable. However, according to ld counsel, the classification can be decided in terms of Rule 3 (a) itself since the heading 8901 being more specific is to be preferred over a general description. 4. Lastly the contention is that there was no misrepresentation to the Customs at the time of clearance of the vessel because it was subjected to first check examination under the supervision of DC Docks and a detailed examination report was prepared stating that the vessel has a winch. Therefore there was no misdeclaration and consequently the question of confiscation under section 111 (m) of the Customs Act does not arise. 5. The Ld AR appearing on behalf of Revenue reiterated the findings of the Commissioner. He stated that the Certificate of Kuwaiti Regist....
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....stry which indicates the type of ship as 'supply vessel'. Revenue does not attach any importance to this certificate because it dates back to 1994. But at the same time Revenue has not been able to question the genuineness of this certificate or to produce any evidence that the certificate does not describe the vessel as it was in 1994. The Certificate of Indian Registry dt 2-9-2008 in which the Registrar of Indian Ships certifies the particulars of a ship under the Merchant Shipping Act 1958 describes the vessel 'offshore hunter' as an OSV i.e. Offshore Supply Vessel. This certificate is dated 2 nd September 2008. The certificate also gives the earlier name of the vessel that is 'Salwa' which name is used to describe the vessel in the Certificate of Kuwaiti Registry. During investigations the Department raised this issue with the Mercantile Marine Department under Ministry of Shipping, Government of India who clarified on 29/6/12 that 'There is no restriction for an offshore supply vessel to undertake towing operations if duly certified so by the class. Indian register of shipping, a 'recognized organization' under M.S. Act, is the authorized pr....
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....plained how the vessel in question is designed for transport of goods and cargo. For example, the arrival report dated 8.11.2011 of Custom house Mundhra which is referred to by the learner AR, under S No 9: Cargo mentions the description as 'loading coastal export', Another example is the daily working report dated 10.11.2011 of Mundra port which indicates that the vessel in question was carrying export cargo namely Steel CWC pipes. Therefore it is clear that the vessel was used for carrying persons and cargo although at times it was also used for towing operations. 6.5 The question which arises is that if the vessel is used for carrying persons and cargo as well as for towing operations, what is the primary purpose for which the vessel is designed. Merely having a winch does not lead to conclusion that the vessel is a tug. Supply and passenger ships can also have a winch. To decide the issue at hand, in the absence of any technical document of the design of the vessel, we have to rely on the Certificate of Indian Registry issued under the Merchant Shipping Act 1958. The description retrieved from the web-site QUASIS by Revenue cannot be preferred over the certificate give....