TaxTMI 
TaxTMI 
2018 (10) TMI 1314
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.... and SGST-2.5%) or IGST @ 5% or not. At the outset, we would like to make it clear that the provisions of both the CGST Act and the GST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submission (Brief facts of the case), as reproduced verbatim, could be seen thus - STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTION(S) ON WHICH THE ADVANCE RULING IS SOUGHT 1. This Application is being filed by A. S. Moloobhoy Private Limited ('the Applicant'/'the Company'). The Applicant, having Good and Service Tax ('GST') Registration No. 27AAMCA4160E1ZT is inter alia engaged in the business of sale and distribution of Marine Distress Signals, EPIRB and SART, SSAS, Marine Chemicals, Navigation and Communication (NAVCOM) Equipme....
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.... • Heading 8902 applies to fishing vessels, factory' ships, other vessels, etc. • Heading 8904 is for tugs and pusher crafts. • Heading 8905 covers Light vessels, fire floats, dredgers and other vessels. • Heading 8906 and 8907 is for other vessels and floating structures. Applicant reiterates that goods supplied by it, are of critical nature, without which the ship would not be permitted to sail and therefore such equipment or parts thereof should be classified as "Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907" and should be taxed at the rate of 5%, as such individual goods are supplied as a part of the ship or vessel, to ensure that the ship is sea worthy. Such goods cannot be classified as spares separately in their own right. 7. Applicant is becoming non-competitive in the market if it does not classify the spares/equipment/parts under entry no. 252 of Notification No.1/2017 Central Tax which specifically covers Parts of goods of various types of the ships and vessels covered under headings 8901,8902, 8904, 8905, 8906, 8907. 8. In view of the above the issue for determination before the Authority for Adva....
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....ation rules reads as under: "When by application of rule 2(b) or for any other reason, goods are prima facie, classifiable under two or more headings, classification shall be effected as follows: The heading which provides the most specific description shall be preferred to headings providing a more general description." 2.5. As stated above, the goods being imported are necessarily parts of the ship, in view of their compulsory requirement as per IMO; to establish the ship as sea worthy, and not spares per se. The meaning of the term "spares" referred above, incorporates a wide ambit of products and therefore would lesd to a generic classification of goods. 2.6. On the other hand the classification of the same; as parts of the ship, would be more specific and could be attributed as the products relevant to a particular industry; namely the shipping industry and would therefore provide clarity in identifying the same. SUBMISSION 3 2.7. The appellant strongly relies on the decision of the Honorable Supreme Court in its own case i.e. Commissioner of Customs, Mumbai Appellant(s) VERSUS M/s. A.S. Moloobhoy & Sons & Ors. Respondent(s) WITH CIVIL APPEAL NOS. 3115-311....
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....quirement of the Global Maritime Distress and Safety System, 1999 (GMDSS). Accordingly, the Central Government in exercise of its power in Section 296 of the Merchant Shipping Act, 1958 and the Merchant Shipping (Distress and Safety Radio Communication) Rules, 1995 has made these Rules which would apply to all sea going passenger, cargo and fishing boats of 20 mtrs. or more than length and all ships other than Indian ships more than 300 tons while they are in any port or place in sea. The Rules require all existing ships comply part I of the Rules on or before 1st February, 1995. Various dates on which these Rules will come into force in parts are mentioned, and but compliance is required on or before 1-2-99 in all cases. The said rules requires inter alia that every ship or fishing boat should carry two satellite EPIRB, Navtex receiver radio facility of Maritime safety information by the INMARSAT, enhanced group calling (EGC) system of HF Direct printing telegraphy, etc 3.4 For undertaking the repair of the ship, over and above rendering of repair service, the Applicants also are required to supply various parts of various equipment in ship viz. Navigation equipment and spares,....
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....ganization (IMO), which are essential to establish the sea worthiness of a ship. 4.6 As stated above, the goods being imported are necessarily parts of the ship, in view of their compulsory requirement as per IMO, to establish the ship as sea worthy. 4.7 The Applicants further submit that Ship Repairing Unit (SRU) Registration No.DGS/ENGG/REG-0000174 dated 25.04.2014 endorses the fact that the said equipment/spares being imported by the Applicants is for the purpose of repair/replacement of goods on board a vessel, so as to ensure that the ship as a whole is sea worthy as per IMO Regulation. 5.0 Support of judgments in Applicants own case/other's case under Customs: 5.1 Notn.No.23/98-Cus dated 2.6.1998 and succeeding Notifications including 21/2002-Cus dated 1.3.2002 (Sr. No. 251) was prescribing Nil rate of duty (both standard rate and additional duty rate) to capital goods and spares thereof, raw-materials, parts, material handling equipment and consumable used for repair of ocean-going vessel by Ship Repair Unit registered with DGS. 5.2 The notice was issued to the importer-Applicants proposing to deny the exemption under the said Notification on the basis tha....
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....dated 28.06.2017 is as reproduced below: "S. No Chapter/Heading/Sub- heading/Tariff ltem Description of Goods (1) (2) (3) XXX XXXX xxxxxx 52. Any chapter Parts of goods of headings 8901, 8902,8904, 8905, 8906, 8907 XXX XXX XXXXXX" 6.2 From the above it is clear that parts of ships, vessels, tugs, floating structure, etc. mentioned in headings of chapter 89, except heading 8903, irrespective of their classification, would be eligible for concessional rate of GST of 5%. The Notification, like statute, has to be interpreted in terms of its language adopted and when language is plain and clear effect thereof has to be given. It is also settled position of law that plain terms of Exemption have to be given effect without calling in aid of any supposed intention, and a casus omissus cannot be provided by interpretation. 6.3 In support of the above contention that plain interpretation has to be adopted while interpreting an exemption Notification, reliance is placed on the ratio of following judgments:- (a) Malwa Industries - 2009 (235) ELT 214 (SC) (b) Mewar Bartan Nirman Udyog - 2008 (231) ELT....
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.... 8901, 8902, 8904, 8905, 8906 and 8907. 10.0 The provisions of Merchant Shipping (Distress & Safety Radio Communication) Rules, 1995 would support that the goods under consideration are parts of ship and hence, would be covered under Sr. No.252 of list 1 of Notn. 1/2017-Central Tax (Rate)/Integrated Tax (Rate) 11. With the above submissions and those made in their application and additional submissions, it is humbly prayed for holding that the disputed equipment would be covered under Entry No. 252 of Notn.No.l/2017Central Tax (Rate) and are entitled for concessional rate of tax. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- The notice under Advance ruling provision was issued to the this office as the dealer, M/s. A.S. MOLOOBHAY GSIN:- 27AAMCA4160E1ZT, Who is assigned to this office under case allocation, has applied for advance ruling under section 97 of CGST/MGST Act, 2017. The dealer has mentioned its nature of activity as factory/ manufacturing & in brief it says "Sale and distribution of marine Distress Signals, EPIRB and SART, SSAS, Marine Chemicals, Navigation and communication (NAVCOM) equipment and....
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.... Mafatlal Mills, N. M. Joshi Marg, Lower Parel, Mumbai, 400013. 3) Registered address of Service Tax Office: Mumbai Central-New, Division-Ill, Range I, Primal Chambers, Jijibhoy Lane, Lalbhaug, Parel, Mumbai-400012. 4) Classification of Services provided by the applicant under service tax is as under: Table-1 Sr. NO. Services provided by Applicant Accounting Code Service Tax Rate (Basic+SBC+KKC) Benefit of any notification claimed 1 Technical Inspection and certification Agency Services 00440249 15% N. A. 2 Maintenance & Repairs Services 00440245 15% Exemption was claimed under clause 25 (b) of Notification 25/2012 ST dated 20/06/2012 for services provided to Govt., a Local authority or a Govt. authority by way of repair or maintenance of vessel. 5) Assesse have not applied for any advance ruling under the provision of central excise, service tax or sales tax. 6) As per applicant there is no any case of violation of central excise or service tax. 7) As per applican....
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....ated that he does not have any objection to admission of application and would making submissions in due course. The application was admitted and final hearing was held on 17.07.2018 , Ms. Nafeesa Maloobhoy, M.D., along with Sh. Rajkumar Sarawagi, C.A,, G.M. appeared and made oral and written submissions in addition to the details as per their application. The Jurisdictional officer Deepak Gadhave, Dy. Commissioner of S.T.(MUM-VAT-E-827), Nodal - 4, Mumbai appeared and made written submissions. 05. OBSERVATIONS We have perused the records on file and gone through the facts of the case and the submissions made by the applicant and the department. 10. We find that the applicant has submitted that they are engaged in the business of sale and distribution of Marine Distress Signals, EPIRB and SART, SSAS, Marine Chemicals, Navigation and Communication (NAVCOM) Equipment, Life raft, Lifeboat and Fire-fighting services, including pyrotechnic Disposal, Electronic Services and Training Services related to the Marine Industry. They are importing the various goods/spares, which are supplied by them on ships. As per their submissions such equipments are an essential part of a ship,....
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....tence without these parts. However, in addition to the above there are some additional equipments that are required to be made available on a ship as a measure of statutory compliances under various marine acts such as Merchant Shipping Act or Additional Safety measures such as Walkie-talkie, Binoculars, Life Jackets, Lifeboats, etc. Though these are also to be compulsorily made available on a vessel and ship but cannot be taken to be parts of a ship as per general understanding but are rather additional equipments on a ship.. In addition to the above there are other essential items like furniture, fans, air-conditioners, television, etc which are very essential for comfort of officers and crew of the ship but do not come under essential parts or equipments of a vessel/ship. We find that the items that are discussed as essential parts of a ship/vessel are such essential components of a vessel/ship without which the ship would not be complete and would not exist. These are very integral for the functioning of the ship and can also be separated from the ship for repair/replacement. When we refer to the definition of the word 'part' as discussed in detail above, we fi....
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....chineries. While using the plants and machineries, PPLF (Polypropylene Liner Fabric) was used as a device in the form of liner components to various machinery units to protect the rubber-coated tyre fabric from atmospheric moisture and dust. This Court held that the PPLF was not a component of the machine itself. It was not a constituent part. It was used as a Liner Fabric not only in tyre production but also in similar other industrial processes. In case of Jindal Strips Vs Collector of Customs, Equivalent citations: 1997 ECR 98 Tri Delhi, 1997 (94) ELT 234 Tri Del. the Two Member Bench of the Tribunal referred the appeal before the larger bench on the following questions: (i) Whether the phrase "component parts" occurring in Notification 77/90 would cover "spare parts" for the purpose of granting of benefit thereunder? The larger Bench of the Tribunal having regards to dictionary meaning of "part", and "Component' observed that in common parlance meaning of the expression "component" is also the same, that is, one of the parts or elements of which anything is made up or into which it may be resolved or a Constituent. The meaning in common parlance has to be looked in....
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....e Sales Tax Act, 1957." In light of the above discussions, considering the meaning of an expression (Part) as given in the dictionary and also the ratio as adopted by the Hon'ble Courts as mentioned above besides common parlance test, we now take up each and every goods/spares, etc claimed by the applicant to be parts of a ship [as listed in Annexure I-A of this ARA application and as reproduced by them mentioning their uses in page no 24 of their compilation A made before this authority as an additional submission] and discuss and find out whether each of the subject goods/spares can be considered as parts of ship. They have broadly listed the equipments/parts of the equipments along with their usage which is as follows:- S. No. EQUIPM ENT FULL FORM DESCRIPTION REMARKS A GPS Global Positioning System Used for establishing ship's latitude and longitude Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be parts of a ship as per above discussions B ECHO SOUNDER Echo Sounder Used to find depth under the sea Is an essential part of ship and without it the ship w....
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....sed for receiving navigational weather and other warnings Would be in the nature of an additional equipment and therefore cannot be considered as parts of a ship as per above discussions M EPIRB Emergency Positioning Indicating radio Beacon Used to alert search and rescue services in case of distress/ emergencies Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be parts of a ship as per above discussions N VDR Voyage Data Recorder Used for recording and analysing data of the ship Would be in the nature of an additional equipment and therefore cannot be considered as parts of a ship as per above discussions O NDB Non Directional Beacon Used for choppers to determine landing location on board Would be in the nature of an additional equipment and therefore cannot be considered as parts of a ship as per above discussions P FCV Fish Finder Used for higher level accuracy and clear fish shoal images Would be in the nature of an additional equipment and therefore cannot be considered as parts of a ship as per above discussions Q SONAR Sound Navigati....