Case Law Details
Centre for Marine Living Resources & Ecology Vs Commissioner of Customs (CESTAT Bangalore)
Introduction: The CESTAT Bangalore has delivered a verdict in favor of the Centre for Marine Living Resources and Ecology (CMLRE), allowing customs duty exemption on the import of spares and other specific items for vessel repair. The case involved the Master of the vessel Fishery Oceanographic Research Vessel (FORV) Sagar Sampada, owned by CMLRE, who imported ship spares without paying customs duty, leading to a show-cause notice.
Analysis: The Commissioner of Customs demanded customs duty based on Section 12 of the Customs Act, 1962, which makes all imported goods liable for duty, with exemptions granted by the Central Government. The Commissioner interpreted the vessel’s foreign-going status to permit duty-free supply of diesel oil and lubricating oil but excluded spares. CMLRE argued that the CBEC letter did not explicitly mention spares in the exclusion list.
Additionally, CMLRE claimed eligibility for exemption under Notification No.21/2002, meant for Ocean Going Vessels, which was applicable either way – as a foreign-going vessel or an ocean-going vessel.
The CESTAT Bangalore upheld CMLRE’s claims, citing the CBEC letter declaring FORV Sagar Sampada as a foreign-going vessel without explicitly excluding spares. Furthermore, they recognized the vessel as an ocean-going vessel under the exemption Notification No.21/2002, covering spares for repairs of ocean-going vessels.
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