Case Law Details
Commissioner of Central Excise Vs Vijai Marine Services (CESTAT Mumbai)
Classification of casino vessels would be under heading 8901 9000 as ‘passenger ship’ and not under heading 8903 9990 as‘pleasure boats’
Conclusion: ‘Casino vessels’ could not be classified as ‘pleasure boats’ as the vessel was a supply vessel used for transport of persons and goods, the correct classification would be heading no. 8901 90 00 which covers’ Other vessels for transport of the goods and other vessels for transport of both persons and goods’ and not under heading No. 8903 9990. More so, the goods falling under heading no. 8901 were exempted under Not. 21/2002 read with Notification No. 20/2006.
Held: Department issued show cause notice for recovery of undischarged duty liability on the ground that the vessel was intended for deployment as an ‘offshore casino’ to be operated on the Mandovi river in Goa and that, under the pretext of clearing the same as a ‘conveyance’, the true intent of use and actual design of the impugned goods had been concealed to avail the consequences of the claimed classification. The dispute in classification of ‘MV Royale Floatal’, a vessel manufactured by M/s Vijai Marine Services in which Department was aggrieved by order-in-original no. GOA-EXCUS-000-COM-021-15-16 dated 31st March 2016 of Commissioner of Central Excise & Service Tax, Goa and sought re-classification of the goods under heading no. 8903 9990, instead of heading no. 8901 9000 accepted by the adjudicating authority, of the First Schedule to Central Excise Tariff Act, 1985. It was concluded by the adjudicating authority, that floating casinos were not ‘vessels for pleasure or sports’. It was alleged that the ‘dumb barge’, converted as a ‘self-propelled floating hotel’ as per contract with M/s Highstreet Cruises and Entertainment Pvt Ltd was, thereafter, handed over to M/s Delta Pleasure Cruise Company Pvt Ltd on ‘bare boat charter’ and that the latter was a known operator of floating casinos, including MV Casino Royale, at the same location in Goa. The clearance, at a declared value of ₹ 11.89 crores, had been effected at ‘nil’ rate of duty applicable to heading no. 8905 with an exemption under notification no. 12/2013-CE dated 1st March 2013. In the present instance, assessee had sought classification under heading 8905 of the First Schedule to the Central Excise Tarif Act, 1985 and, against the proposal in the show cause notice to classify it under heading no. 8903, the adjudicating authority found it appropriate that heading no. 8901 should be adopted. In the present case, the vessel was designed as a supply vessel for transport of persons as per the Certificate of Indian Registry. As the vessel in question was a supply vessel used for transport of persons and goods, the correct classification would be heading no. 8901 90 00 which covers “Other vessels for transport of the goods and other vessels for transport of both persons and goods.” And the goods falling under heading no. 8901 were exempted under Not. 21/2002 read with Notification No. 20/2006.’
FULL TEXT OF THE CESTAT JUDGEMENT
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