AI Drafter 
TaxTMI 
TaxTMI 
2019 (11) TMI 128
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....y. This order is issued without prejudice to any other action that may be taken in respect of the goods in question and/ or against the person concerned under the provisions of the Customs Act, 196 and/ or any law for the time being in force in the Republic of India" 2.1 Appellants imported second hand/ used Casino Ship M V Majesty vide Bill of Entry 886357 dated 17.05.2009. The declared assessable value of the Ship was TRs. 7.99 crores and classification claimed was under 8901. The B?E was order for examination on first check basis. 2.2 The ship was examined on first check basis. As per the examination report the value of the vessel excluding game equipments was proposed in the range of US$ 1,125,000 to US$ 1,400,000 by the docks. The value of game equipment was proposed around US$ 117,500 and the value of chair and stool around US$ 15,430. It was also suggested vessel would more appropriately be classifiable under heading 8903 as against 8901 claimed by the importer. It was also stated that casino games/ chairs/ stools are old and used and fitted in the vessel may be classified separately under Chapter 94/95 and may also attract ITC violation. 2.3 B/E was assessed und....
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....asino vessel. Just by placing casino games on board the vessel will not cease to be cruise ship or an excursion vessel. • The terms used in the tariff should have been interpreted as per the definitions incorporated in other relevant statues and there judicial exposition. Certificate of survey dated 21.05.2009 granted by the Ship Survey cum Deputy DH (Tech) of the Mercantile Marine Department under Section 27 of the Merchant Shipping Act, 1958 also describes the vessel as a Passenger Vessel. It is therefore abundantly clear from the aforesaid provisions as well as the aforesaid certificates and the Final certificate of the Indian Registry that the vessel has to be considered as a passenger vessel. • Reliance placed by the Commissioner on the decision of tribunal in case of Waterways Shipyard Pvt Ltd is irrelevant as the said ship was built as casino ship. • The issue is squarely covered by the decision of tribunal in case of Ashok Khetrapal [2014 (304) ELT 408 (T-Ahd)] 3.3 Arguing for the revenue learned authorized representative while re-iterating the findings recorded in the impugned order submitted that- • It is clear that b....
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....articles to the customs for assessment and classification purpose. It is also a settled position in law that the goods would have to be assessed in the form in which they are imported and presented to the customs and not on the basis of the finished goods manufactured after subjecting them to some process after the import is made. In the reported decision in Vareli Weaves Pvt. Ltd. v. Union of India [1996 (83) E.L.T. 255 (S.C.)] the question was as to whether the countervailing duty was liable to be left on the imports made by the assessee at a stage they would reach subsequent to their import after undergoing a process. It was contended that such goods could be subjected to duty only in the State in which they were imported. It was held that the countervailing duty must be levied on goods in the State in which they are when they are imported. This was on the basis of Section 3 of the Customs Tariff Act. Though there is no reference to Rule 2(a), in our opinion, the same Rule should apply subject of course to the applicability of the Rule. We have already held that the Rule is not applicable. Similar view was taken in Dunlop India and Madras Rubber Factory Ltd. v. UOI [1983 (13) E.....
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....e old and used and fitted in the vessel, these are separately classifiable under respective Chapter 95/94. These attract ITC violation. The matter may be decided by the appropriate adjudicating authority." 4.4 From the examination report reproduced above it is quite evident that casino games have been fitted on all the three decks of the vessel, and the layout of the decks including those of chairs and stools on the deck was to facilitate the playing of those casino games. Once the vessel is fitted with such casino games across the entire three decks with no regular seating plan etc., the same cannot be called a passenger ship. It is also not case of appellant that there is a fare charged by the appellant for the voyages that can be undertaken on the vessel imported. In the above background we need to examine the decisions referred to by both the sides during the course of argument of appeal. 4.5 After taking the note of above entries in the HSN and also the definition of "Pleasure Vessel" in Merchant Shipping Act, Mumbai Bench of Tribunal has in case of Waterways Shipyards Pvt Ltd [2013 (297) ELT 77 (TMum)] held as follows: 12. In the show cause notice Revenue relying on ....
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.... or excursion boats. After going through the advertising material published, we find that vessel is shown as advertised cruise ship which forms the India first gaming casino . Cruise is defined in New Shorter Oxford Dictionary as : "Cruise - A voyage in which a ship sails to and fro over a particular region, esp. for the protection of shipping or for pleasure; a sail for pleasure making for no particular place or calling at a series of place." The vessel as a cruise ship is classifiable under Heading 8901 of Central Excise Tariff. 13. It is also noticed from the explanation below the subheading 8901 as HSN Explanatory Notes states that "this Heading covers all vessels for the transport of persons or goods, other than vessels of Heading 89.03......" From this explanation it is also inferred that some vessels of transport of persons or goods are also classifiable under Heading 8903 because of the use of the words "other than vessels of Heading 8903" in this explanation. Entry 8903 of the HSN reads as under :- 8903 Yatch and Other Vessels for Pleasure or Sports; Rowing Boats and Canoes 8031 Inflatable Other 890391 Sailboats, with or without auxi....
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....passenger ship has been specifically defined as to mean a mechanically propelled ship carrying more than thirty special trade passengers. This is a fact that of the vessel M/s. M. V. Caravela carries more than thirty passengers and this vessel can go to a limited area in the sea. Therefore, this special trade passenger ship is defined under Section 3(47C) is different from the normal passenger ship as defined under Section 3(25). 15. Now we have to see whether this special trade passenger ship can be classified under Heading 8901 in the category of the vessel used for transport of passengers. The passenger and special trade passenger have been separately defined under the Merchant Shipping Act. The special trade passenger ship can be taken a vessel meant for transport of the passenger as the special trade ship are meant for special trade as defined under Section 3(47A) of the Act and by virtue of words 'other than the vessels under Heading 8903' in HSN Explanatory Notes of Heading 8901 [this Heading covers all vessels for transport of persons or goods other than vessels of Heading 8903] it is classifiable under Heading 8903. 16. The contention of the respondent is that their ....
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....uipment indicated that it was usable not for carrying cargoes or passengers for commercial purposes but was for vacation, enjoyment etc. The items for survey which were not part of the basic design of the vessel could not change the character and classification of the vessel." In the instant case the vessel M/s. M.V. Caravela is designed for the purpose of casino games therefore by applying the ratio of the said decision it should more appropriately be classifiable under Heading 8903 as vessel for pleasure or sports. 19. It is seen from the above that the vessel in question on one hand Is classifiable as a cruise ship under Heading 8901 and on the other hand it is classifiable as a vessel for pleasure under Heading 8903. In such a situation the Rules for interpretation of the classification come into play Rule 1, 2 & 3 of the Rule for Interpretation of the Schedule are reproduced as under : 1. The titles of Sections and Chapters are provided for case of reference only; for legal purposes, classification shall be determined according to the terms of the Headings and any relative Section or Chapter Notes and provided such Headings or Notes do not otherwise require, according....
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....the numerical order among those which equally merit consideration. Therefore, following this Rule of Interpretation the vessel in question is more appropriately classifiable under Heading 8903 of the Central Excise Tariff. We hold accordingly." 4.6 Appellants have relied upon the decision of Tribunal Ahmedabad bench in the case of Ashok Khetrapal [2014 (304) ELT 408 (T-Ahd)] wherein it has been held as follows: "5.1 On the issue of classification of the vessel POG, the adjudicating authority has mainly relied upon the fact that the vessel is a Casino vessel and is intended to be made stationary for use as a casino even if it is capable of making voyages in the open sea. On the other hand, importer has come out with the argument that the end use of the vessel should not be made as the basis for classifying a vessel under the Customs Tariff Act. This issue, whether end use of imported goods should be made the basis of classification was decided by Hon'ble Apex Court in the case of UOI v. V.M. Salegaoncar a Brs (P) Ltd. (supra). In that case, appellants imported transhippers which were vessels used for carrying cargo loaded from the harbour and carry the same for unloading cargo....
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.... pilgrim or a person accompanying a pilgrim; (47C) "Special trade passenger ship" means a mechanically propelled ship carrying more than thirty special trade passengers." From the above definitions, it is not necessary, as contended by the Revenue that a passenger has to be carried from one place to another in a ship in order to hold that a vessel is a "passenger ship". A person taken on board a vessel will also be considered as a passenger as per the above definitions. Various certificates issued by the competent authorities in favour of POG, as per Section 3(38) of the Merchant Shipping Act, 1958, also convey that POG is a passenger ship. It is observed from Para 3 of the order passed by CESTAT Mumbai in the case of CGU Logistics Ltd v. CC (I), Mumbai [2011 (274) E.L.T. 75 (Tri- Mum)] that similar certificates were considered for classifying a vessel as cargo ship of CTH 8901 when special equipments were fitting on it for doing special tasks and Revenue was claiming the classification under CTH 8905. 5.3 It is further observed from the HSN explanatory notes under Heading 89.03 that the notes talk of all vessels for pleasure or sport. However, while specifying the inclusi....
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....vessel'. There is thus force in the argument of the importer that when the appropriate authorities under Section 3(38) of the Merchant Shipping Act, 1958, by issuing required certificates, have opined POG to be a passenger ship or Special Trade Passenger Ship then there is no ground for the adjudicating authority to hold that POG is not a passenger ship designed to carry passengers when no contrary opinion of another competent authority is brought on record saying that POG is a vessel for pleasure or sport. 5.6 Temporary use of POG in a stationary position will not change the classification of POG when the same is capable of moving across the seas/oceans but has to be mostly made stationary due to the restrictions imposed by the local laws. It will be a strange situation to classify a vessel under CTH 8901 if used for making trips to open sea, with a night halt arrangement in the sea, but classify the same vessel under CTH 8903 if used in a predominantly stationary position. In view of the above observations, we are of the opinion that Casino vessel POG imported by the importer is principally designed to carry passengers and has been correctly assessed under CTH 8901. 4.7 The....
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....icrowave, fridge, coffeemaker and solid surface counter tops; it also contains arrangement for shower, sleep and relaxation; it is no important as to the manner in which the impugned boat is used, it is rather important as to how the boat is built which should be a guideline for determining the classification of boat; in fact, we find that the catalogue describes the impugned boat as "Bayliner 325 Cruiser" and the Bayliner have claimed themselves to be manufacturers and marketers of recreation boats and Cruisers; there is a prima facie evidence that the boat is intended for the luxury uses; we find that the case of Urmila & Company Pvt. Ltd. cited supra is similar to the impugned case; we find that Heading 8901 covers the vessels for transport of persons or goods that vessels design primarily for the conveyance of persons or goods are covered by this Heading; it is not the case of the respondents that it was for the conveyance of persons or goods and looking into the fittings available in the boat and the amenities it offers, there is no doubt to believe that the boat is intended to a "pleasure boat". Therefore, whatever be the actual use of the said boat, it is required to classif....
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....to us that this circumstance can hardly advance the case of the Revenue, because the First Schedule to the Central Excises and Salt Act does not appear to have been modelled on the Brussels Tariff Nomenclature. There is nothing to show that the Tariff Items were classified in the Schedule on the basis of the Brussels Tariff Nomenclature. It was when the Customs Tariff Act, 1975 was enacted that the First Schedule to that Act was framed in accordance with the Brussels Tariff Nomenclature, evidently because the progress made in industrial growth and economic development, and the substantial changes in the composition and pattern of India's external trade called for the need to modernise and rationalise the nomenclature of India's Tariff in line with contemporary conditions (introductory comments on the Customs Tariff Act, 1975). The glass mirrors were still not specifically mentioned under the Customs Tariff Act, 1975. They are now being brought in as such by the Customs Tariff Bill, 1985." Thus the decision of Ahmedabad Bench which solely applied the meaning as assigned to "Pleasure Vessel" in The Merchant Shipping (Vessels in Commercial Use for Sports or Pleasure) Regulations, 1....
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.... to produce any evidence, document or otherwise that the product shampoo being sold by them is known as ayurvedic medicine in common parlance and not as a toilet preparation. In interpreting tariff hearing of a commodity, resort should not be made to the scientific and technical meaning of the terms and expression used but to their popular meaning in medical practitioner for a specific disease. Further, I find in his statement dated 16-9-96 recorded under sec. 14 of the Central Excise Act, 1944, Shri Ajay Kumar Gupta, Manager referred to their product as "shampoo" thereby indicating its actual identity as known in common trade parlance. Consequently, I find no reason to agree with views of the defence that their product is ayurvedic medicine and not shampoo as understood in common trade parlance."" 4.12 Further elaborating the above principle Hon'ble Apex Court has in case G S Auto International Ltd [2003 (152) ELT 3 (SC)] held as follows: "15. The question that needs to be adverted to is: whether the goods in question can appropriately be classified under Tariff Item 52 or not having been specified elsewhere, they fall under Tariff Item 68. In construing these items, what is....