TaxTMI 
TaxTMI 
2021 (10) TMI 151
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....cant first filed the application for Adavance Ruling with Gujarat Authority of Advance Ruling where in stated that they are engaged in the manufacture and supply of various goods such as: (a) Transformer oils, white oil, industrial lubricating oils and specialties oils falling under the Customs/GST Tariff No.2710. (b) Aluminium conductors falling under Chapter Heading No.7614 of the Customs/GST Tariff Act. (c) Various grades of cables, including power/electric cables, house wire cables, marine/pressure tight cables and non-pressure tight cables and other cables, etc. falling under Chapter Heading No.8544 of the Customs Tariff Act. 4. The applicant has submitted that they have received orders and are expecting future orders from the Defence Machinery Design Establishment (DMDE), Department of Defence Research and Development under the Ministry of Defence, Government of India for the supply of Marine-pressure tight and Non-Pressure tight cables, specially made and designed for use in the warship as 'parts' of warship; that these cables are though universally classified under Tariff Heading No.8544, but made and designed for use in Warship as it's integra....
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....en supplied to Indian Navy or Ministry of Defence, GOI based on a certificate of intended use issued by the Rear Admiral of Indian Navy or an officer not in below Joint Secretary to the GOI. Whereas in the GST regime there is no requirement of issuing such a certificate, the Ministry of Defence has issued such certificate confirming that intended use of the goods is for Warship Submarine Application and therefore GST rate @5% is applicable in terms of Sr. No. 252 of Not. No. 11/2017-CT (Rate) dated 28.06.2017. 9. The Gujarat Authority for Advance Ruling (herein after referred to as 'the GAAR'), vide Advance Ruling No. GUJ/GAAR/R/91/2020 dated 17.09.2020 inter-alia observed that the term 'Part/Parts' has not been defined in GST therefore it is required to understand the general meaning or dictionary meaning of the said terms. Cambridge dictionary meaning of the part means, 'a separate piece of something or a piece that combines with other pieces to form the whole of something' and second definition of part defines 'as one of the pieces that together forms a machine or some type of equipment'. Also refer the judgment of Saraswati Sugar Mills Vs. Commissioner of Central Excise Civi....
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....ship would not come into existence or would not be complete. 10. Accordingly, Gujarat Authority of Advance Ruling vide Advance Ruling No. GUJ/GAAR/R/91/2020 dated 17.09.2020 has ruled that: Q. Whether the applicability or determination of liability to pay Tax on our said goods at 5% GST rate is legally correct and in order in terms of Schedule-I of Notification No.1/2017-Integrated Tax (Rate) or not?" Ans. The applicant M/s. Apar Industries limited, Valsad is not eligible to avail the benefit of GST @5% applicable as per Entries 250 and 252 of Schedule-I of Notification No.01/2017-Integrated Tax (Rate) dated 28th June, 2017 for the reasons discussed hereinabove. 11. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal on 03.11.2020. 12. During the course of personal hearing held on 15.04.2021, the appellant reiterated the submissions made in the appeal. 13. The appellant in the ground of appeal has submitted as under: (i) The GAAR had relied upon the extracted data available on the 'online' internet and it is simple logic that how fully automatic ship can function or work without having used therein Power or elect....
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....cial characteristics, specification, properties, technical requirements and various testing Parameters to be compiled with for the reason that the water is excellent conductor of electricity where general purpose or multipurpose Cables cannot be used in water and these cables are specially designed for used in Submarine warship. (b) It can be say that Kerosene and Aviation Turbine Fuel are essentially same, except that for use in Aircraft it has to pass 70+ stringent tests, otherwise the life of 100 plus will be in danger. Similarly, Warship which has to move for combat operations is in 'do or die' situation, highly, sophisticated designed and special characteristic and effectiveness of cables used in the Warship must meet international standards. (c) The submission and diagram of submarine warship showing therein how the goods i.e. Marine- Pressure Tight and Non Pressure Tight Cables are used is strictly confidential for the Govt. of India. (vii) The Ministry of Defence/ Indian Navy in view of the GAAR order has submitted clarification/ reply vide their letter dated 29.10.2020 wherein they have explained how these cables are used in the warship Applicati....
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....orm the whole of something. One of the pieces that together form a machine or some type of equipment' From the above it could be understood that anything which is an integral element and is also essential to an object, could be considered as part of the article. Now, it is necessary to know about the technical characteristic and use of the goods in question viz. Marine-Pressure & Non-Pressure Tight Cables in submarine warship so that it can be decided that goods in question is an essential and integral part of the warship. Therefore, we refer the technical write up, End-User Certificate and clarification issued by Rear Admiral of Indian Navy. 16.1. The appellant in his technical write up has stated that Marine-Pressure & Non-Pressure Tight Cables are manufactured as per the size, design and specification provided by Indian Navy and are intended for use in the Warship Application only and has no other intended use. Since these cables are used under the sea they requires very special characteristics, technical requirements and various testing parameters to be compiled with for the reason that water is the excellent conductor of electricity where general purpose or multipurpose ....
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....sively for Indian Navy and do not have any commercial application/utility. 4. These cables are utilized for powering the essential equipment listed at Para 15 (Page6) of the Advance Ruling issued by the Gujarat Authority for Advance Ruling and also weapon launchers thereby attracting GST of only 5%. 5. Without these marine cables the essential equipment would be rendered nonoperational thereby rendering warships ineffective during war operations. 17. On going through the technical write up we have observed that Marine-Pressure & Non-Pressure Tight Cables are customized and manufactured as per the design and specification provided by Indian Navy. These cables are used in Submarine warship under the sea which requires highly sophisticated design with very special characteristics, specification, properties, technical requirements and various testing Parameters to be compiled with for the reason that the water is excellent conductor of electricity where general purpose or multipurpose Cables cannot be used in water. These cables are designed and develop to possess requisite level of electrical, mechanical, chemical, environmental and thermal properties to carry out....