No duty leviable over boats imported by appellants for tourism purpose: CESTAT

No duty leviable over boats imported by appellants for tourism purpose: CESTAT

M/s. E-Factor Adventure Tourism Ltd imported two used motor boats described and classified the same as “Excursion Boats” and have availed exemption in terms. the boat was classified as a yacht as per the registration in the country of origin i.e. Britain and there was no registration by Mercantile Marine Department (MMD). The Bill of Entry was selected for the first check examination and on the basis of the examination of the report, the department sought to impose a differential duty of Rs. 1,71,39,839 on the goods. The order passed by the original authority was upheld. Hence, this appeal. As per the definition of "Pleasure vessel" under Merchant Shipping Act, 1998, it can be seen that for the boat to be considered as a pleasure vessel or boat is to be owned and used by an individual or a body corporate for themselves or a group of people who are duly authorized or permitted. Whereas in the instant case, the boat is used for tourism purposes. It can be seen that the Government of Andhra Pradesh, Port Department, Kakinada has issued a provisional certificate of registration to the boats imported by the appellants. The Department of Tourism, Government of Andhra Pradesh, Visakhapatnam has certified that the boats are imported by the appellants for the purpose of creating excursions and itineraries in Vizag to facilitate the development of promotion of tourism in adventure. Thus, it is not open for the department to consider the boats to be pleasure yachts to be used by a person or group of persons. The tribunal held as the boats are more than 20-25 years old and less than 20 tonnages and the area of operation is in Vizag, they are to be registered locally so, that the boats are registered by the Port Authority at Kakinada and there is no report given by MMD that the boats are yachts. The tribunal held that the order had erred in concluding that the imported boats are yachts classifiable under CTH 8903, and cannot be sustained. They are classifiable under CTH 8903. Hence, the order was set aside and the appeal was allowed with consequential relief as per law.