TaxTMI 
TaxTMI 
2025 (3) TMI 728
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....isions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any 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, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT: 1.1. Applicant is engaged in the business of sale and distribution of fish finders. 1.2. Applicant either domestically procures fish finders or imports the same from overseas vendors. This is further supplied to Indian as well as foreign flag ships or vessels. 1.3. A fish finder is a device boatman use to locate fish in the water. They work on the Sound Navigation and Ranging (SONAR) technology. It works by sending sound waves in water. These waves then strike an object and return to the device and relay important information like shape and size of the fish and so on. Copy of brochure further explaining the function of fish finders is attached with the application. 1.4. On perusal of the Entry 252 of Schedule I to Notification....
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....le, rafts, tanks, coffer-dams, landing-stages, buoys and beacons) 2.3. Fish finders are an important part of a fishing vessel and hence should be considered as parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907. 2.4. Term 'part' is neither defined under GST legislation (including rules and rate notification) nor defined under the Customs Tariff Act (including schedule, section notes and chapter notes). It is settled legal principle that in absence of the definition of a particular term in the statute or a statutory document, it must be given same meaning which it receives in the ordinary parlance. This was held by Hon'ble Apex Court in case of MSCO Private Limited vs. Union of India and Others [1985 (19) E.L.T. 15 (S.C.)]. Further, Hon'ble Supreme Court in case of CIT, Bangalore v. Venkateswara Hatcheries (P.) Ltd. [(1999) 3 SCC 632] held that 'when the word is not so defined in the Act it may be permissible to refer to dictionary to find out the meaning of that word as it is understood in the common parlance'. Dictionary meanings of the word 'part' are as under: Dictionary Meaning Black's Law Dictionary An integral portion, something essential belon....
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....o of said judgement squarely applies to the present case and hence any article or product that is fitted to the ship or vessel can be construed to be a part of such ship or vessel. Fish finders are fitted on fishing vessels for the convenience of finding fishes in deep sea. Hence, fish finders should be considered as an essential part of the fishing vessel which is classifiable under Entry 252 of Schedule I to goods rate notification. Karnataka AAR in case of Bharat Electronics Limited [2019-TIOL-289-AAR-GST] took cognizance of the above judgement and ruled that various systems, sub-systems and onboard spares fitted on the ship are integral part of the ship or vessel and hence shall be classifiable under Entry 252 of Schedule I to the goods rate notification and taxable at 5%. 2.7. Further, if any equipment, spares or parts are designed for a particular product, it shall be classified along with such product only. Fish finders are designed for marine purpose only i.e. to be fitted on a fishing vessel to assist fishermen in finding fishes in deep sea. They do not have any application other than to be fitted on a fishing vessel. Hence, fish finders merit classification under the r....
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....plicant submits that, on a plain and literal reading of the rate entry for parts of the ships, all goods used as part of goods which fall under tariff headings 8901, 8902, 8903, 8904, 8905, 8906, 8907, even though classifiable under any chapter of the GST Tariff, deserve to get covered under the said entry. In support of this proposition, the Applicant relies upon Judgment of the Hon'ble Supreme Court in Oswal Agro Mills Ltd. vs. CCE, a position which was reiterated in Tata Consultancy Services vs. State of Andhra Pradesh. 2.10. In support of the contention that fish finders will merit the rate of 5%, so long as they satisfy the description mentioned in rate entry for parts of the ships, Applicant refers to the judgment in the case of Mahindra and Mahindra Limited vs. Commissioner of Central Excise, Nagpur [2007 (210) E.L.T. 579 (Tribunal)], wherein, the Hon'ble Tribunal evaluated availability of exemption to goods falling under "any Chapter", when used as parts of goods Heading 8701. Similar view was taken by the Hon'ble Tribunal in the case of High Energy Batteries (I) Limited vs. Commissioner of Central Excise, Trichy [2002 (142) E.L.T. 266 (Tribunal)] pertaining to parts of ....
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....r goods 247. 8902 Fishing vessels; factory ships and other vessels for processing or preserving fishery products 248. 8904 Tugs and pusher craft 249. 8905 Light-vessels, fire-floats, dredgers, floating cranes and other vessels the navigability of which is subsidiary to their main function; floating docks; floating or submersible drilling or production platforms 250. 8906 Other vessels, including warships and lifeboats other than rowing boats 251. 8907 Other floating structures (for example, rafts, tanks, coffer-dams, landing stages, buoys and beacons) 252. Any chapter Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 The applicant asked question, whether the Fish finder is falls under the entry No. 252 of the above notification and tax rate is 2.5%. The answer of the above question is as per below discussion: A Fish Finder is not typically considered a necessary part for the manufacturing of fishing vessels but rather an optional accessory or auxiliary equipment. Here's a detailed explanation: 1. Relevance of Fish Finder in Fishing Vessels • Integral Part: A fishing vessel can function ....
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.... "As regards Fish Finders and SONAR. They are not part of the GMDSS. Neither are the integral to the function of the ship. They only help certain vessels which are fish vessels to locate fish and increase the accuracy in finding fish shoal. Therefore, they would not be part of a ship as they are not integral to the functioning of the ship. Also, they are not attached to all ships but only to fishing vessels and therefore have specific application. They assist in the operation of the vehicle for the purpose to which they are dedicated to and they are not mandatorily required to be attached to all ships. A part of thing qualifies to be part only when is so essential and integral to the whole that the whole cannot function without it. The SONAR or Fish Finder do not confirm to the definition of a part given above. We therefore agree with the finding of the AAR that Fish Finder and SONAR are not part of the ship." 4. HEARING Preliminary e-hearing in the matter held on 27.11.2024. Ms. Nafeesa Adil Moloobhoy, Director and requested for admission of the application. Jurisdictional Officer Mr. Eknath K. Said, Sales Tax Officer of SGST, also appeared. The application was a....
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....04, 8905, 8906 or 8907 and therefore chargeable to reduced tax @ 5% under Sr.No.252 of Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017. 5.3 To deal with the limited issue before us, it is necessary to find out whether the 'Fish Finder' sold by the applicant are parts of a fishing vessel/vessels falling under HSN 8901 to 8907. It is necessary to examine as to what are "Parts" and then find out whether the product 'fish finder' sold by the applicant can be considered to be a 'part' of the goods specified under Chapter Headings 8901, 8902, 8904, 8905, 8906 or 8907. We find that the word "Part/Parts" has not been defined in GST law. The Hon'ble Supreme Court in the case of CIT, Bangalore Vs. Venkateswara Hatcheries OP) Ltd., reported in 1999 (3) SCC 632 has held that 'when the word is so defined in the Act, it may be permissible to refer to dictionary to find out the meaning of that word, as it is understood in common parlance'. In view of this, first we are required to understand the general meaning of the word 'Part/Parts' which is of relevance to us in the present case. i) We find that as per Cambridge English Dictionary: Part (noun) a separate piece....
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....water. Fishfinder instruments are used both by recreational and commercial fishermen, as well as by marine biologists. 5.6 We find that items like Anchor, Bow, Bowsprit, Fore and Aft, Hull, Keel, Mast, Rigging, Rudder, Sails, Shrouds, Engines, gearbox, Propeller, Bridge, etc. are very essential parts of a ship or vessel and are quite clearly parts of a vessel/ship and a ship/vessel cannot be imagined to be in existence without these parts. However, in addition to the above, there are some additional equipment 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. Some of such products are Walkie-talkie, Binoculars, Life Jackets, Lifeboats, etc. Though these are also to be compulsorily made available on a vessel and ship but these products cannot be taken to be parts of a ship as per general understanding but are rather additional equipment on a ship. Similarly, a fishing vessel may be equipped with fishing nets, fishing lines etc., but these equipment cannot be treated as part of the fishing vessel. In addition to the above there are other essential items like f....
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.... Mills (supra) has made a settled distinction while considering whether paper cores are components' in the manufacture of paper rolls and manufacture of paper sheets. It is stated that `paper cores' are component parts in so far as manufacture of roll is concerned, but it is not component part' in the manufacture of sheets. It is useful to quote the observations made by this Court: "Paper core would also be constituent part of paper and would thus fall within the term "component parts" used in the Notification in so far as manufacture of paper in rolls is concerned. Paper core, however, cannot be said to be used in the manufacture of paper in sheets as component part. 15. In Modi Rubber Ltd. v. Union of India, (1997) 7 SCC 13, the appellant had set up tyre and tube manufacturing plant and imported various plants and machineries. 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....
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....writer (unlike spool) though it may not be possible to use the latter without the former. Just as aviation petrol is not a part of the aero-plane nor diesel is a part of a bus in the same way, ribbon is not a part of the typewriter though it may not be possible to type out any matter without it. The very same question with which we are here confronted came up for decision before the High Court of Mysore in State of Mysore v. Kores (India) Ltd (26STC 87). (1) Where it was held: "Whether a typewriter ribbon is a part of a typewriter is to be considered in the light of what is meant by a typewriter in the commercial sense. Typewriters are being sold in the market without the typewriter ribbons and therefore typewriter ribbon is not an essential part of a typewriter so as to attract tax as per entry 18 of the Second Schedule to the Mysore 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 find that Fish Finders are not 'part' of fishing vessel or any of the goods of Chapter ....
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....AAAR/SS-RJ/20/2018-19 dated 1.2.2019 in the case of Ms. A. S. Moloobhoy Pvt. Ltd., had decided the issue whether Fish Finder is a part of the vessels falling under Chapter headings 8901, 8902, 8904, 8905, 8906 or 8907. The relevant part of the said order is as under: - "As regards Fish Finders and SONAR, they are not part of the GMDSS (Global Maritime Distress Safety System). Neither are they integral to the function of the ship. They only help certain vessels which are fish vessels to locate the fish and increase the accuracy in finding fish shoal. Therefore, they would not be part of a ship as they are not integral to the function of the ship. Also, they are not attached to all ships but only to fishing vessels and therefore have a specific application. They assist in the operation of the vehicle for the purpose to which they are dedicated to and they are not mandatorily required to be attached to all ships. A part of thing qualifies to be part only when it is so essential and integral to the whole that the whole cannot function without it. The SONAR or Fish finder do not confirm to the definition of a part given above" 5.11 We find that the above decision clearly emp....