Sports boat - scope - Inflatable boat - Customs and Tariff Act - CESTAT - Taxscan

The Customs, Excise and Service Tax Appeals Tribunal ( CESTAT ) in Mumbai held that sports boats were within the meaning of inflatable craft corresponding to heading 8901 of the first schedule of the Customs Tariff of 1975. The bench was composed of Mr. Anil Choudhary, Member (Judicial) Mr. CJ Mathew, Member (Technical). The Appellant was represented by BB Mohite and the Respondent was represented by Ramesh Kumar, Assistant Commissioner. The appeal was filed to overturn the Assistant Commissioner’s order stating that there is no distinction between sports and excursion boats and therefore need not be classified as inflatable boats under the law.

The appellants argued that the sports boats fell under subheading 8901 10 of the First Schedule to the Act. The customs authorities have argued that the subheading covers all vessels for the carriage of persons or goods falling within heading 8903 of the First Schedule of the Customs Tariff Act 1975 which, after excluding rubber tyres, canoes, sailboats of all kinds and motor boats, other than outboard motor boats.

In ruling on the present case, the CESTAT relied on the aspect of the burden of classification proposed by the Supreme Court. The classification must be based on an appropriate description of the offending goods before being subjected to a comparison with the declared classification. Yachts and other pleasure or sports rowing boats and canoes correspond to inflatable boats at the level of the tariff heading. The lower authorities did not analyze the intention of the legislature under heading 8903 of the First Schedule of the Customs Tariff Act 1975 or the descriptions corresponding to the tariff numbers of heading 8903 of the First Schedule of the 1975 Act on the customs tariff. The CESTAT also came to the conclusion that the decision of the lower authorities was not based on the merits and, therefore, the appellant’s assertion stands. That said, the CESTAT quashed the order of the lower authorities and upheld the appeal.

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Shri Rajan Ran vs Commissioner of Customs

Counsel for the Appellant: Lawyers: Shri B. Satish Sundar and Shri Solomon P. Francis

Counsel for the Respondent: Shri R. Rajaraman