Page 224 - ELT_1st September 2020_Vol 373_Part 5

662 EXCISE LAW TIMES [ Vol. 373

2020 (373) E.L.T. 662 (Kar.)
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Aravind Kumar and Hemant Chandangoudar, JJ.
STATE OF KARNATAKA
Versus
DREDGING CORPORATION OF INDIA LTD.
Civil Revision Petition No. 248 of 2011, decided on 4-3-2020
1
Dredger - Ocean going vessels/ship or machinery - On taking into con-
sideration common parlance definition and definition of ship as defined in
Merchant Shipping Act, 1958, dredges to be construed as ship - Dredges regis-
tered as a ship under said Act recognized by Income Tax Department as a ship
- Statutory authorities under different enactments have consistently held that
‘dredger’ are to be considered as “ocean going vessels” - Dredges are ocean
going vessels i.e., ship and not machinery - Entry 52 of 1st Schedule to Karna-
taka Tax on Entry of Goods Act, 1979. [paras 7, 8]
Petition dismissed
CASES CITED
Atul Glass Industries Ltd. v. Collector — 1986 (25) E.L.T. 473 (S.C.) — Relied on ........................... [Para 7]
Collector v. Dredging Corporation — 1991 (55) E.L.T. A33 (S.C.) — Relied on ............................... [Para 7]
REPRESENTED BY : Shri Vikram Huilgol, HCGP, for the Petitioner.
S/Shri G. Rabhinathan and N. Thirumalesh, Advo-
cates, for the Respondent.
[Order per : Aravind Kumar, J.]. - This revision petition came to be ad-
mitted on 7-6-2012 to consider the following substantial questions of law :
(i) Whether in the facts and circumstances of the case, the Karnataka
Appellate Tribunal was right in law in holding that the dredgers are
ocean going vessels i.e., ships and it cannot be called as machinery?
(ii) Whether in the facts and circumstances of the case, the Hon’ble
Karnataka Appellate Tribunal was right in law in holding that the
dredgers is a ship or vessel based on the registration under the Mer-
chant Shipping Act, 1958 and also described under Chapter 89 of
the Central Excise Act?
2. The respondent herein is a Government of India undertaking consti-
tuted for providing services at all sea ports in India to carry out dredging opera-
tions for removal of sand, silt and other debris accumulated at the sea bed so as
to facilitate unimpeded and unhampered ingress and egress of ships into and out
of the ports. Respondent owns dredgers and deploys the same at the ports to car-
ry out dredging operations. The Assessing Authority under Section 5(4) of the
Karnataka Tax on Entry of Goods Act, 1979 (for short ‘KTEG Act’) levied entry
tax of Rs. 1,06,00,000/- @ 2% on dredges by construing the same as machinery
and similar penalty under Section 5(5) of the KTEG Act, which was rectified un-
der Section 17(1) of the KTEG Act on 29-6-2006 determining the tax at
Rs. 22,91,164/- and also levied same amount of penalty for the assessment year
________________________________________________________________________
1 On appeal from STA No. 379/2009, dated 30-6-2010 by Karnataka Appellate Tribunal, Banga-
lore.
EXCISE LAW TIMES  1st September 2020  224