LexM/S DHARTI DREDGING AND INFRASTRUCTURE LTD. versus COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, GUNTUR
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A B C D E F G H 739 [2023] 4 S.C.R. 739 739 M/S DHARTI DREDGING AND INFRASTRUCTURE LTD. v. COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, GUNTUR (Civil Appeal No. 3005 of 2010) MARCH 01, 2023 [S. RAVINDRA BHAT AND DIPANKAR DATTA, JJ.] 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, 8481- 82, 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. A B C D E F G H 740 SUPREME COURT REPORTS [2023] 4 S.C.R. 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. Case Law Reference [2011] 13 SCR 579 referred to Para 6 CIVIL APPELLATE JURISDICTION : Civil Appeal No.3005 of 2010. From the Judgment and Order dated 28.05.2009 of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore in Appeal No.C/690/2008. Kumar Visalaksh, Udit Jain, Ajitesh Dayal Singh, Abhay Chattopadhyay, Praveen Kumar, Advs. for the Appellant. N. Venkataraman, A.S.G., Mukesh Kumar Maroria, V. C. Bharathi, S. A. Haseeb, Ms. Alka Agarwal, Ms. Ruchi Gour Narula, Syed Abdul Haseeb, Advs. for the Respondent. The Judgment of the Court was delivered by S. RAVINDRA BHAT, J. 1. The appellant had 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. These were classified under the Chapter Heading 8905 10 00 of the Customs Tariff Act, 1975 (hereinafter “the Act”). The appellant claimed the benefit of Nil rate of duty, in terms of Notification No. 21/ 2002- CUS dated 01.03.2002. The appellant had relied upon a certificate dated 27.02.2008 issued by the Chartered Engineer, based on the inspection of the goods. After verification of the Bill of Entry, the Assistant Commissioner was of the opinion that the multicats, M.S. pipes, imported A B C D E F G H 741 dredging pumping units and other goods were classifiable under different tariff headings and were not entitled toexemption under the notification as “DREDGERS”. 2. Feeling aggrieved, the assessee appellant preferred an appeal to the Commissioner of Customs (Appeals), Guntur (hereinafter “the Appellate Commissioner”). The Appellate Commissioner, by an order dated 30.06.2008, after elaborately analysing the functions of each individual part, granted relief and held that nine items were entitled to exemption. These were set out in pa
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