Hariyana Ship Demolition Pvt Ltd Vs Commissioner of Custom-Jamnagar (PREV) (CESTAT Ahmedabad)
In the case of Hariyana Ship Demolition Pvt Ltd Vs Commissioner of Custom-Jamnagar (PREV), the CESTAT Ahmedabad ruled that oil contained in the bunker tanks of vessels imported for breaking is to be classified as part of the ship for customs duty purposes. The appellant, a registered shipbreaker at the Alang Ship Breaking Yard, imported the vessel M.V. CRASSIER for demolition. The customs authorities initially treated the oil in the bunker tanks as a separate item for customs assessment. However, the appellant contested this, citing prior rulings that classified such oil as part of the vessel under Customs Tariff Heading 8908. The CESTAT upheld the appellant’s position, referencing a similar decision involving other shipbreakers from the same yard, where the oil was deemed an integral part of the ship. Additionally, the Supreme Court had previously rejected an appeal by the Revenue in a similar case, affirming that oil in bunker tanks should not be separately assessed. Consequently, the CESTAT allowed the appeal, aligning with the Supreme Court’s ruling.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These are two appeals involving the same issue. Appellant is engaged in the business of importation of Old and used vessels for breaking up at the Ship Breaking Yard Alang /Sosiya at their designated plot which was allotted by the Gujarat Maritime Board Bhavnagar/ Gujarat Your Appellant is a Registered Ship Breaker at Ship Breaking Yard, Alang/Sosiya, Dist, Bhavnagar. Appellant is importing various types of old and used ships for breaking on payment of the due Customs duty leviable thereupon under the provisions of the Customs Act, 1962 read with the Customs Tariff Act, 1975.
