2008(04)LCX0365

IN THE CESTAT, WEST ZONAL BENCH, AHMEDABAD [COURT NO. II]

Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Murthy, Member (T)

Commissioner of Customs (Prev.), Jamnagar

Versus

Mercury Marine Indus. P. Ltd.

Final Order Nos. A/919-925/2008-WZB/AHD, dated 29-4-2008 in Appeal Nos. C/21-27/2008

Cases Quoted -

Bhikkamal Chotelal v. Commissioner - 2006(11)LCX0323 Eq 2007 (211) ELT 0303 (Tribunal) - Followed [Para 2]

Commissioner v. Saibaba Ship Breaking Corporation - 2001(10)LCX0162 Eq 2002 (140) ELT 0135 (Tribunal)
-Followed [Para 2]

Ghaziabad Ship Breakers v. Commissioner - 2002(11)LCX0105 Eq 2003 (151) ELT 0636 (Tribunal) - Referred.[Paras 1, 2]

Shiv Marine Industries Pvt. Ltd. v. Commissioner - 2003(11)LCX0045 Eq 2004 (178) ELT 1048 (Tribunal)- Followed [Para 2]

Priya Blue Industries Ltd. v. Commissioner - 2008 (221) ELT A152 (Guj.) - Relied on [Para 2]

Advocated By -

Smt. A. Vasudev, JCDR, for the Appellant.
Shri S.S. Mehta, CA.,for the Respondent.

[Order per : Archana Wadhwa, Member (J)]. -

The short issue involved in all the present appeals by the Revenue is as to whether the fuel and oil stored in the engine room as well as outside the engine room are to be assessed along with the ship falling under heading 89.08 or the same have to be classified under heading 27.10. From the order of the Assistant Commissioner of Customs, we find that he has held that the fuel and oil contained in the vessel's machinery and engines has to be held as forming integral part of the vessel and have to be classified under heading No.89.08, whereas the remaining fuel and oil have to be classified under appropriate heading. However, the said order of the Assistant Commissioner was reversed by the Commissioner (Appeals), by following the Tribunal decision in the case of Ghaziabad Ship Breakers - 2002(11)LCX0105 Eq 2003 (151) ELT 0636 (Tri- Del.). The said orders of the Commissioner (Appeals) are appealed against before us.


2. After hearing both sides, we find that the Commissioner (Appeals) has followed the earlier decision of the Ghaziabad Ship Breakers and by observing that reference application filed by the Revenue before the Hon'ble High Court of Gujarat is pending without stay of operation. However, we find that though the said reference application is still pending, the Hon'ble High Court in another reference application in Priya Blue Industries filed against the Tribunal decision wherein the Ghaziabad Ship Breakers judgment was not followed, has held that law declared by the Tribunal in the case of Priya Blue Industries Ltd. is the correct law and no interference is required. For better appreciation, we reproduce the Hon'ble High Court judgment dated 29-1-2007 [2008 (221) ELT A152 (Guj.)]:

"Heard learned counsel for the appellant.

The following substantial questions of law are proposed for admission in this appeal.

"(A) Whether the Tribunal was correct in ignoring the decisions of coordinate benches, inter alia, in Ghaziabad Ship Breakers v. Commissioner of Customs [2002(11)LCX0105 Eq 2003 (151) ELT 0636 (Tri.)] and the Circular of the CBEC bearing No. 37/96-Cus. dated 3-7-1996, in holding the oil in a vessel's engine room as not forming part of the vessel for the purpose of classification, without setting out any reasons for taking a different view ?

(B) Whether the Tribunal has arrived at a factually incorrect finding that the oil was not in the Engine Room of the vessel imported by the Appellants, without any basis ?"

The finding of the Tribunal was that fuel was not in the engine or machinery. The Tribunal has considered the issue as under:

"We have heard both sides. As per CBE & C Circular cited supra issued on the basis of the opinion of the World Customs Organisation at Brussels, only that fuel and oil, which is contained in the vessel's machinery and engines can be regarded as forming integral part of vessels and, hence, classifiable under CETA Heading 89.08 and remaining fuel and oil other than the above, are classifiable separately in thereon appropriate heading. Therefore, the classification is depended upon the location of the fuel and oil. In this case there is no dispute that fuel and lubricating oil was confined in a tank kept in the engine room. Therefore, it cannot be considered as being contained in the vessel's machinery and engine. Hence, the lower authorities have correctly classified the goods in question on merits in their respective headings."

The Tribunal as well as Commissioner (Appeals), Central Excise and Customs, Ahmedabad have rejected the claim of the assessee. When there is concurrent finding of the Tribunal and Commissioner (Appeals), Central Excise and Customs, Ahmedabad that the fuel was neither in the engine, nor in the machinery, no case is made out for admission of this appeal.

We see no justification to interfere with the impugned order.

The appeal stands dismissed at admission stage"

Inasmuch as, the issue now stands answered by the Hon'ble High Court, we I do not find any justification to await the outcome of another reference application filed in the case of Ghaziabad Ship Breaker. In any case, the Tribunal in subsequent decision has held that fuel and oil, apart from the quantity which is contained in engine and machinery, are required to be assessed separately under their respective headings, Reference in this regard is made to Tribunal decision in the Shiv Marine Industries P. Ltd. v. C.C.E., Bhavnagar - 2003(11)LCX0045 Eq 2004 (178) ELT 1048 (Tri.-Mumbai) and Bhikkamal Chotelal v. C. Cus. & C.Ex., Ahmedabad - 2007 (211) ELT 303 (Tri.-Ahmd.) and in the case of C.C.E., Rajkot v. Saibaba Ship Breaking Corporation - 2002 (140) ELT 135 (Tri.). In view of the above, we set aside the impugned orders and allow the appeals filed by the revenue.

(Dictated and pronounced in the open Court)

Equivalent 2009 (236) ELT 0679 (Tri. - Ahmd.)