The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the import of spares and other specific items for repair of the vessel by the Ocean-Going Vessel was eligible for exemption from customs duty under exemption notification.
Centre for Marine Living Resources & Ecology, the appellant assessee was an organization established by the Government of India under the Ministry of Earth Sciences for organizing, coordinating, and promoting development activities.
The Master of the vessel Fishery Oceanographic Research Vessel (FORV) Sagar Sampada owned by the assessee had imported ship spares in large quantity onboard the vessel after filing reshipment application instead of Bill of Entry and without paying any customs duty.
The assessee appealed against the order passed by the Commissioner of Customs for confirming the demand of customs duty and for nonpayers of customs duty and for imposing the penalty.
Hari Kumar G. Nair, the counsel for the assessee contended that the Central Board of Excise and Customs (CBEC) declared the assessee as a foreign going vessel and permitted duty-free supply of diesel oil and lubricating oil subject to the condition that other items of stores like liquor, cigarettes and foodstuff will not be permitted free of duty.
Further submitted that in the permission given by CBEC, nowhere the words ‘spares’ had been categorically mentioned and all are eligible for exemptions under exemption notification.
K. Vishwanath, the counsel for the department relied on the decisions made by the lower authorities and contended that it was right in denying the benefit of the exemption Notification as per CBEC and the Notification was eligible only for the Cochin Shipyard and not for the assessee.
The Bench observed that the Ocean-Going Vessel which was eligible for import duty exemption in respect of spares, parts, and other specific items for repair of the vessel under exemption notification.
A single-member bench comprising P. A Augustian (Judicial) quashed the demand of the Customs duty made by the department while allowing the appeal filed by the assessee.
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