AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1314
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....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) Equipment and also providing Life Saving services: such as....
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....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 Advance Ruling ('AAR') is whether supply of such goods (as listed in Annexure III) is classifiable as "Parts of goods of....
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....gs, 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. 3115-3117 OF 2015, where the Honorable Court declined to interfere with the order passed by the Tribunal, wherein it was held that these imports of equipment and spares s....
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....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, communication equipment and spares, lifesaving/firefighting equipment and spares, etc. which are listed in their application as Annexure 1-A (504 Items). For brevity, the said items under....
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....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 that the goods were not covered by any of the category of item specified in the entry to the exemption. It further alleged that the goods were not used for repair because the ships were fully functional and would not be par....
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....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 27 (SC) (c) Parle Biscuits - 2005 (192) ELT 23 (SC) (d) Bombay Oil Industries - 1997 (91) ELT 538 (SC) 7.0 Section/Chapter Notes and/or Explanatory Notes to HSN are for classification and not for interpreting exemption Notn.: 7.1 HSN....
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....(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 also providing lifesaving services such as life raft, lifeboat and firefighting services, including Pyrotechnic Disposal, Electronic services and training services related to the marine industry. Dealer has requested In Annexure I that a ruling be pronounced under section 97(2) a of the CGST Act 2017 on the follo....
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....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 applicant there is no any case of violation of central excise or service tax has been booked against the applicant in last five years. Applicant is dealing in import of various goods which are supplied on ships. Goods are imported by applicant on payment of IGST. As per the Bill of Entry submitted by applicant it is observed that wile importing he has paid the IGST @ rate of 18 and 28%. In GST there is separate e....
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....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, and makes the ship sea worthy. The only issue that is raised before us by the applicant is whether the said parts/spares/equipments which are used on a ship are forming parts of the ship and therefore chargeable to reduced tax @ 5% under Sr.No.252 of Notification No.1/2017 Central Tax (Rate) dated 28.06.2017. To deal with the limited issue before us i.e. to find out whether the goods/spares used by the applicant are parts of a ship first of all we need to examine as to what are "Parts". W....
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....s 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 find that 'part' is a separate piece of something or a piece that combines with other pieces to form the whole of something. Similarly the second definition of part also defines 'part' as one of the pieces that together form a machine or some type of equipment. While interpreting the issues like the one at hand, we may refer to certain judgements which throw light on the disputed issue. In case of Saraswati Sugar Mills Vs Commissioner of Central Excise Civil Appeal No.5295 of 2003 decided on 2nd Aug 2011....
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....elhi, 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 into since the notification itself does not contain any definition of the expression. In the State of Uttar Pradesh vs M/S. Kores (India) Ltd on 18 October, 1976, Equivalent citations: 1977 AIR 132,1977 SCR (1) 837. In this case the appellant contended before the Hon SC that carbon paper does not lose its character as paper in spite of being subjected to chemical processes, and that ribbon is not an accessory but an essential part of the typewriter. While dismissing the appeal Court held that "A word which is not defined in an enactment has t....
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....r 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 would not be performing its essential function and therefore would be parts of a ship as per above discussions C RADAR Radio Detecting and Ranging Used to detect objects at sea 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 D ECDIS Electronic Charts Display & Information System Used to show locations for navigation 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 a....
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....ussions 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 Navigation and Ranging Used for searching underwater fishing Would be in the nature of an additional equipment and therefore cannot be considered as parts of a ship as per above discussions R LSA/FF Life saving/ Fire Fighting Appliances Used for safety of crew, vessel and passengers Would be in the nature of an additional equipment and therefore cannot be considered as parts of a ship as per above discussions S BANWAS Bridge Navigation Watch Alarm System The bridge is manned at sea during voyage, else alarm is issued by the unit for safety of ship 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 T SART Sear....