ORDER
Gowri Shankar, Member (T)
1. The application is by the Commissioner for stay of the operation of the order of the Commissioner (Appeals). The appeal before the Commissioner (Appeals) was against the order of the Superintendent assessing to duty a ship MV Vishwa-Yash purchased by the respondent before us for breaking up into scrap. The Superintendent has said in the letter that ship would assessable to Customs duty under Heading 8908.00 of the Tariff and to special Customs duty and additional duty under Heading 8908.00 of the Central Excise Tariff. In the appeal before the Commissioner (Appeals) it was contended that the ship was built in 1973 at Vishakhapatnam by M/s Hindustan Shipyard Ltd. and is exempted by Notification 118/59, dated 13th June, 1959 from Customs duty and that there is no provision for levy of Customs duty on goods manufactured in India. The Commissioner (Appeals) had accepted the contention that the liability to duty of the ship arose when it was manufactured in Customs bond and cleared thereafter, and that thereafter, merely because the ship would ply between Indian port and foreign port, it could not be considered to be exported or said to have been imported into India when it came back for scrap. He relied upon the decision of the Bombay High Court in Union of India v. Jalyan Udyog -1987 (32) E.L.T. 697 (Bom.) and the Tribunal decision in Salim Abbasbhai (citation not given).
2. It is contended for the Department that the order is not proper and correct for various reasons. The stay of the operation of the order is requested on the ground that if the ship is broken down into scrap, it will be difficult to recover the duty, if the issue is finally decided in favour of the Department. The Departmental Representative contends that the vessel ceased to be an ocean vessel when it was sold for scrapping and therefore ceased to be eligible for exemption in the notification. Since it was brought from outside India, it has become imported goods; the definition of goods in Section 2 of the Act includes these goods. He contends that the decision of the Bombay High Court has been overruled by the Supreme Court in Union of India v. Jalyan Udyog -1993 (68) E.L.T 9 (S.C.) and the Supreme Court, not accepting the contention that the ship can only be imported into India once. He therefore says that the reliance on the High Court’s order is therefore misplaced.
3. Advocate for the respondent says that once a vessel gets the benefit of Notification 163/65, it cannot once again be subjected to duty. He further says that about 3/4th of the vessel had already been broken into scrap, which has been cleared. Therefore, the application for stay of the operation of the order will be infructuous. He makes a distinction between Notification 163/65 and 118/59. He says that both exempt ocean going vessel the first when imported and the second when manufactured in India and the first exemption is subject to the proviso that any such vessel subsequently broken up shall be chargeable to duty payable as if she was imported to be broken up, there is no such condition in the second notification.
4. Prima facie we are not able to accept the contention that the vessel looses its character as an oceangoing vessel merely because it is imported for breaking up. The judgment of the Supreme Court was not concerned with Notification 118/59 but another Notification 262/65, which contains a specific proviso that an oceangoing vessel if subsequently broken up is chargeable to duty payable if she was imported to be broken up. Notification 118/59 does not contain any such provision. We cannot assume that the omission of the provision in this notification is unintentional. We also note that, by the time we heard the application, most part of the vessel had already been cleared and therefore the stated objective of the stay application of safeguarding the duty will not be achieved. We therefore decline to stay the operation of the impugned order of the Commissioner (Appeals).
5. Application dismissed.