Oil in Bunker Tanks Inside/Outside Engine Room to be Considered Integral to the Ship: SC upholds CESTAT ruling [Read Judgement]
![Oil in Bunker Tanks Inside/Outside Engine Room to be Considered Integral to the Ship: SC upholds CESTAT ruling [Read Judgement]](https://www.taxscan.in/wp-content/uploads/2023/09/Oil-in-Bunker-Tanks-Bunker-Tanks-Oil-Outside-Engine-Room-Integral-to-the-Ship-SC-upholds-CESTAT-ruling-CESTAT-ruling-CESTAT-SC-Supreme-Court-taxscan-.jpg "Oil in Bunker Tanks Inside/Outside Engine Room to be Considered Integral to the Ship: SC upholds CESTAT ruling [Read Judgement]")
The Supreme Court while upholding the decision of the same court and Customs Excise & Service Tax appellate tribunal (CESTAT) observed that Oil in the Bunker Tanks of the Engine Room/outside the Engine Room of the vessels should be considered as part of the vessel/ship. The bench of Justice Arvind Kumar and Justice S.V.N. Bhatti noted the issue involved that whether the Oil contained...
The Supreme Court while upholding the decision of the same court and Customs Excise & Service Tax appellate tribunal (CESTAT) observed that Oil in the Bunker Tanks of the Engine Room/outside the Engine Room of the vessels should be considered as part of the vessel/ship.
The bench of Justice Arvind Kumar and Justice S.V.N. Bhatti noted the issue involved that whether the Oil contained in the Bunker Tanks in the Engine Room/Outside Engine Room of the Vessel imported for breaking up is to be assessed independently of the vessel or with the Vessel imported for breaking up.
The Revenue filed appeal(s) against two orders passed by CESTAT i.e. orders dated 16.02.2022 and 01.12.2022. In the appeals preferred by the Revenue, which are directed, the CESTAT ruled that the oil is to be assessed as part of the Ship.
The co-ordinate bench of the same court in the same case disposed of by order dated 05. 04. 2023, stated that in an earlier appeal Mahalaxmi Ship Breaking Corp. ETC. Vs. Commissioner of Customs, Bhavnagar, the CESTAT ruled otherwise vide order dated 29.05.2009, stating that both the articles are to be separately assessed. Having considered both the orders as well as the submissions of the parties, held that the later view expressed in the orders dated 16.02.2022 and 01.12.2022 by the CESTAT is correct. Thus, the appeal of the revenue was dismissed.
In the instant case, the Supreme Court, observing the decision taken by the co-ordinate bench before, stated that “we are of the considered view that present appeal which arises out of same common order would not survive for consideration.” Thus, the bench disposed the appeal filed by the Revenue.
In the case M/s. Navyug Ship Breaking Co., having similar facts to the case, the CESTAT ruled that “the impugned Orders holding that Oil inside the Bunker Tanks in engine rooms are to be assessed to duty under CTH 27.10 are liable to be set aside and Oil contained in Bunker Tanks in Engine Room of Vessel imported for breaking up is classifiable under CTH 8908 along with the such vessel.”
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
