Per V.K. Agrawal :The issue involved in this appeal, filed by M/s. Priya Holding Pvt. Ltd., is whether the customs duty is separately leviable on stores and bunkers on these goods are to be included in LDT of the ship brought for breaking.

2. Shri A.D. Maru, learned Advocate, submitted that the appellants imported one old ship M.V. BORROVICHI; that they paid the customs duty of Rs. 50,52,210/-; that subsequently the Assistant Commissioner, under Adjudication Order No. 4/99 dated 30.3.99, dropped the demand on movable gears but confirmed the demand on bunker and food stuff in terms of Board's Circular No. 37/96/Cus dated 3.7.1996; that on appeal, the Commissioner (Appeals), under the impugned order dated 14.12.2001, rejected their appeal holding that the fuel kept in the engine room could not be treated as a part of engine and machinery and ship stores were classifiable separately in their own appropriate Heading of the Customs Tariff and not to be classified along with the ship. The learned Advocate, further, submitted that as per definition of LDT of ship, oil stored in double bottom tanks, deep tanks, storage or reserve supply tanks, barrels, drums or tins is not included in LDT and the duty is leviable; that, however, oil in Engine room tanks connected and associated with machinery and engines of the ship is included in the LDT and duty is not leviable. He referred to the Book titled "Ship Design and Construction", Published by the Society of Naval Architects and Marine Engineers, New York. He also mentioned that while sending the ships for breaking, the seller provides sufficient fuel oil and water so that ship can be beached properly at their own power; that such oil is always in engine Department tanks only which are associated and connected with the machinery and engine of ship; that such oil is called "fuel and oil contained in vessel's machinery and engines" regarded as forming integral part of the vessel and no separate duty is leviable. He emphasised that in the present case, the oil was in Engine room tanks and hence no separate duty is leviable. He, further mentioned that the food stuff is consumed by the crew members on particular vessel during their compulsory and necessitated stay period till beaching and no customs duty is payable on the food stuff in view of the provisions of Section 86 and 87 of the Customs Act. Finally the learned Advocate submitted that the Appellants have filed a Miscellaneous Application for raising an additional ground to the effect that the assessment of Bill of Entry was made on the M.T. of the ship whereas under Notification No. 87/90-Cus dated 20.3.1990, the duty was to be assessed on LDT; that as such the assessment was wrong; that further the benefit of Notification No. 118/89-Cus dated 1.3.89 and Notification No. 169/89-Cus dated 12.5.89 was not given which may be allowed.

3. Countering the arguments, Shri Atul Dixit, learned SDR, submitted that the Appellants have never challenged the assessment of Bill of Entry and as such at this stage of their appeal before the Appellate Tribunal, they cannot challenge the assessment by claiming benefit of Notifications; that the present matter pertains to the assessment of oil and food stuff only; that as per para 2 (b) of the Board's Circular No. 37/96 dated 3.7.96 only fuel and oil contained in the vessels machinery and engines is to be regarded as forming integral part of the vessel and it is to be classified under Heading 89.08; that as per para 2 (d) remaining fuel and oil and other ship stores, including drinks and food stuff are classifiable separately in their own appropriate Headings; that the Commissioner (Appeals) has given the specific findings in the impugned order that the Appellants are treating oil and fuel contained in vessel's machinery and engines as the same as the fuel and oil contained in the engine room; that the fuel kept in the engine room cannot be treated as part of the engine and machinery; that accordingly fue