CC AND CE Vs. J.M. INDUSTRIES

JUDGEMENT

(1.) IN 1987 the Respondents purchased an old ship M.V. Satya Kailash which had been built in 1967. The original Light Displacement Tonnage of the ship was 13,759.34 MTs. as recorded in the Stability Book. M/s. Metcalfe and Hodkingson (P) Ltd. surveyed the ship at the time of its import in July, 1987 and estimated a loss of 80% on account of corrosion and depreciation, and suggested 70% of the weight shown in the Registration Book as Light Displacement Tonnage to be taken as the weight of the ship at the time of import. Bill of Entry was accordingly presented declaring the weight to be 8881.54 MTs. as Light Displacement Tonnage as appearing in the surveyor's report. The Tribunal, after examining the contentions of both sides, observed that the scrap after breaking of the ship was cleared on payment of excise duty. There is no dispute that the physical verification by the Excise Officers shows the weight of the scrap to be 10,274.82 MTs. The Tribunal also took into account the fact that some portions of the ship on breaking would be lost and would not be available as scrap. The Tribunal has given a finding of fact that Light Displacement Tonnage, as originally recorded, cannot be accepted for the purpose of clearance of the ship twenty years later. The weight recorded in the LDT less 20% should be accepted as LDT on the date of clearance. Adopting this formula, the weight would be 11007 MTs. These are the findings of the Tribunal.

(2.) THE relevant Tariff Entry, at the material time, was Entry 89.08 which dealt with vessels and other floating structures for breaking up. The duty was 40% plus Rs. 1400/ - per Light Displacement Tonnage. The Tribunal has taken the Light Displacement Tonnage to be as on the date of the import of the ship and not at the time when it was built, for the purpose of levy of duty under Entry 89.08. We do not see any reason to take a different view or set aside this finding of the Tribunal on the actual LDT of the ship at the date of import which is a finding of fact.

(3.) IT is, however, submitted on behalf of the Appellant that under Entry 89.08, Light Displacement Tonnage should be taken as originally recorded in the Builder's Register. Learned Counsel for the Appellant draws our attention to the Merchant Shipping Act: Part V of the said Act deals with Registration of Ships and measurement of ships before registering as well as entry of particulars in the Register. He has also relied on notes under the heading "Transportation" in the Encyclopaedia Britannica explaining Light Displacement Tonnage. We fail to see how these throw any light on the present case. Entry 89.08 has been subsequently amended w.e.f. 29.2.1988. As a result, Note 2 has been introduced in Chapter 89. Note 2 reads as under: