The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has allowed customs exemption for the import of motorboats to be used for tourism purpose.
The assessee, M/s. E-Factor Adventure Tourism (P) Ltd, imported two used motorboats describing the same as “Excursion Boats” and filed Bill of Entry No.4913901 dated 23.01.2018 and classified the same under CTH 89011030 and have availed exemption in terms of Sl. No.551 of Notification No.50/2017–Cus. dated 30.06.2017. The Bill of Entry was selected for first check examination and on the basis of the examination of the report dated 31.01.2018 the department sought to classify the goods under CTH 89039200 and the provisional assessment was ordered to be finalized; the differential duty of Rs.1,71,39,839/-, was confirmed, vide OIO dated 23.03.2019.
The department observed that boats or vessel are not registered with MMD and classified the boat as pressure yacht.
A bench of Ms. Sulekha Beevi, Member (Judicial) and Mr. P. Anjani Kumar, Member (Technical) has observed that in terms of Merchant Shipping Act, 1958, the boats cannot be registered as they are more than 20-25 years old and are of less than 20 tonnage and as the area of operation is in Vizag, MMD Chennai cannot register them and they are to be registered locally only.
After analysing the facts deeply, the ebnch observed that 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 Government of Andhra Pradesh, Port Department, Kakinada have issued a provisional certificate of registration to the boats imported by the appellants. The Department of Tourism, Government of Andhra Pradesh, Visakhapatnam have certified that the boats are imported by the appellants for the purpose of creating excursions and itineraries in Vizag to facilitate development of promotion of tourism in adventure. This being the case, we find that 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.”
“In view of the above, we are of the considered opinion that the impugned order, has erred in concluding that the imported boats are yachts classifiable under CTH 8903, cannot be sustained. In view of the discussion above, we hold that the same are classifiable under CTH 8901,” the Tribunal concluded.
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