Van Oord India Private Limited Vs Commissioner of Customs (CESTAT Ahmedabad)
CESTAT Ahmedabad held that imported tugboats are not machinery, equipment or tools. It is specifically covered under Chapter Heading 8904 and hence benefit of notification no. 72/2017-Cus. dated 16.08.2017 not admissible.
Facts- M/s Van Oord India Pvt Ltd and Ors. (Appellant) imported two old and used Tugs viz “Coaster Rambler” and “Coaster Voyager” with consumables on re-export basis, for execution of ONGC Dredging project at Hazira Port in terms of contract dated 15.06.2018. The appellant claimed concessional rate of customs duty as well as IGST under Notification No. 72/2017-Cus dated 16.08.2017.
The appellant were issued a show cause notice proposing to demand differential duty of Rs. 6,82,50,033/- u/s. 28(4) along with interest u/s. 28AA of the Customs Act, 1962 was also made in the SCN besides confiscation of the imported goods u/s. 111(o) along with penalties under Section 112(a),112(b), 114A, 114AA and 117 of the said Act.
Principal Commissioner disallowed benefit of Notification No.72/2017- Cus. dated 16.08.2017 confirmed customs duty of Rs.6,82,50,033/- u/s. 28(4) alongwith interest under Section 28AA of the Customs Act,1962. Hence, these appeals.
Conclusion- Held that Chennai Tribunal again took up this issue in the case of M/s. International Seaport Dredging Ltd. Vide Final Order No.40046/2019 dated 10.01.2019, they held that Chapter 89 which is vide enough, covers ships, boats and also floating structures and without the fear of contraction, it can safely be assumed that the workboats imported by the appellant in their case are covered under Chapter 89 and not as “Machinery, Equipment or Tools” etc. These work Boats may perhaps came with machinery, equipment like spare parts, accessories and consumable and not vice-versa. The fact of classification depends on the characteristics of the boat and not the items that came along with the boat. On the basis of above reasoning, they held that the work Boats which is termed as tugboat is classifiable under Chapter 89.
