Customs Tariff Act, 1975 – Note 2 to Section XVII – Inapplicability of – Items excluded and denied the benefit of exemption notification, if integral parts of “Cutter Suction Dredger” – Appellant imported a Cutter Suction Dredger along with other accessories and equipments including Pipes, Anchor Boats, Multicats, Dredging pumping units, Engines and other spares and accessories classified under the Chapter Heading 8905 10 00 of the 1975 Act – Claimed benefit of nil rate of duty under the notification – Assistant Commissioner held that the multicats, pipes, imported dredging pumping units and other goods were classifiable under different tariff headings and thus, were not entitled to exemption under the notification as Dredgers – Appellate Commissioner dealt with each item separately and held that nine items were entitled to exemption – CESTAT restored the order of the Assistant Commissioner – On appeal, held: As per Note 2 of the Section XVII, parts and parts of accessories cannot apply to specified articles, including items classifiable under 8401-79, 848182, and to some extent, 8483 – The error committed by the CESTAT is that each of the excluded items was treated as a separate part and not integral to the functioning of a Cutter Dredger – Each of the units excluded by CESTAT are integral for the functioning of a Cutter Dredger – Without the compressors and the pipes necessary to pump the dredged material, the cutter dredger would cease to function as such – Other items are also integral parts of the Cutter Dredger, even though independently utilized for other purposes – The test is not whether multiple uses are possible but whether these parts are essential for the purpose of dredging in a Cutter Dredger – Thus, the revenue’s reliance on Note 2 of the Section XVII is insubstantial – Impugned order set aside – Order of Appellate Commissioner restored.
Steel Authority of India Ltd. vs. Commissioner, Central Excise & Customs, Bhubaneshwar 2022 SCC Online (SC) 1232 – held inapplicable.
Commissioner of Customs Vs. Boskalis Dredging India Pvt. Ltd. [2002 (139) ELT A 313 (SC); Saraswati Sugar Mills vs. Commissioner of Central Excise (2014) 15 SCC
625 : [2011] 13 SCR 579 – referred to.
Boskalis Dredging India Pvt. Ltd. Vs Commissioner of Customs, Bhubaneshwar, [2001 (135) E.L.T. 1396 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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