TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1202
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.... the Applicant can claim exemption from IGST for import of cable laying Vessel as per SI. No. 557C of the Notification No. 50/2017 dated June 30, 2017, in case where the Applicant is the importer on record (IoR) for the cable laying Vessel and Purchaser are the Importer on Record (IoR) for the cables, other goods used in cable laying service. 2. The Applicant vide their application has submitted as follows: 2.1 SubCom Projects India Private Limited (hereinafter referred to as 'Applicant' or 'SubCom India') is a company incorporated in India under the provisions of the Companies Act, 2013 and having its registered head office located at Mumbai. 2.2 SubCom India is a 99.99% owned subsidiary of SubCom, LLC, USA. SubCom, LLC is a company engaged in the business of laying submarine cables under the seabed, which are used for telecommunication/internet connectivity. 2.3 SubCom, LLC is engaged by telecom companies in India for laying submarine cables under the seabed in India. SubCom, LLC has subcontracted the task of laying telecommunication cables under the seabed in India to SubCom India. 2.4 Pursuant to the said contract, SubCom India imports cable layin....
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....roviding cable laying or repairing services in Indian Customs waters -- Nil 105 Condition 105. The importer, by the execution of bond, in such form and for such sum as may be specified by the Commissioner of Customs, binds himself to, - 1. pay duty on goods used in cable laying or repairing services, leviable under the Customs Act, 1962 and integrated tax leviable under Section 3 (7) of the Customs Tariff Act, 1975; 2. pay applicable integrated tax leviable under section 5(1) of the Integrated Goods and Services Tax Act, 2017 on cable laying or repair service; 3. to furnish an undertaking to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, to the effect that the imported goods shall not be cleared for home consumption, and shall be used only for the intended purpose; 4. to re-export the ship/ Vessel immediately after completion of the said cable laying or repairing service; 5. to pay on demand an amount equal to the integrated tax payable on the said goods but for the exemption under this notification in the event of violation of any of the above conditions."; 2.8 SI. No 5....
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.... that the applicant is eligible to claim benefits under Sr. No 555 and 557C of the Notification No.50/2017 dated 30.06.2017 for import of cable laying vessel, subject to the fulfillment of the above conditions, as discussed above." 2.13 As per sub section (2) of Section 28J of the Customs Act, 1962, an advance ruling pronounced shall be valid for three years or till there is a change in law or facts basis of which the advance ruling has been pronounced. The Applicant submits that there is no change in facts of the case basis which the advance ruling was obtained in the past and therefore, given the time frame of 3 years, the above referred ruling is valid till 3 August 2025. Therefore, the present application is being preferred before the Honourable Customs Authority for Advance Ruling to seek the following clarification: A. Whether the Applicant is eligible to claim exemption from BCD on import of cable laying vessel as per sl.no 555 of the Notification. B. Can the Applicant claim exemption from IGST for import of cable laying Vessel as per sl.no. 557C of the Notification in case where the Applicant is the importer on record ('IoR') for the cable layin....
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.... from BCD, unconditionally. 3.8 Therefore, the cable laying Vessel classified under the heading 8906 fits under sl.no.555 of the Notification, hence eligible for exemption from BCD. Cable laying Vessel is eligible for exemption from IGST as per sl.no. 557C of the Notification as long as the Customs Duty is paid on goods used in cable laying: 3.9 The conditions to be fulfilled by the Applicant in order to be eligible to claim the exemption from IGST on the cable laying Vessel are as follows: i. Undertake to pay Customs Duty on goods used in cable laying or repairing services ii. Undertake to pay GST on cable laying or repair service provided in India iii. Provide an undertaking to the Customs Authorities in India to the effect that the imported goods shall not be cleared for home consumption, and shall be used only for the intended purpose iv. Re-export the ship/ Vessel immediately after completion of the said cable laying or repairing service v. Undertake to pay IGST on the cable laying Vessel but for the exemption in the event of violation of any of the above conditions. 3.10 As the Applicant undertakes/concurs to fulfill th....
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....case of District Mining Officer vs. Tata Iron and Steel Co., (2001) 7 SCC 358 "...A statute is an edict of the Legislature and in construing a statute, it is necessary, to seek the intention of its maker. A statute has to be construed according to the intent of them that make it and the duty of the Court is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature. This task very often raises the difficulties because of various reasons, inasmuch as the words used may not be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to convey one's thought or that the assembly of Legislatures consisting of persons of various shades of opinion purport to convey a meaning which may be obscure. It is impossible even for the most imaginative Legislature to forestall exhaustively situations and circumstances that may emerge after enacting a statute where its application may be called for. Nonetheless, the function of the Courts is only to expound and not to legislate. Legislatio....
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....omotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances." CST v. Industrial Coal Enterprises (1999) 2 SCC 607 "11. In CIT v. Straw Board Mfg. Co. Ltd. 1989 Supp (2) SCC 523 this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also, in Bajaj Tempo Ltd. v. CIT (1992) 3 SCC 78 it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. 12. We find that the object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State. If the test laid down in Bajaj Tempo Ltd. case (1992) 3 SCC 78 is applied, there is no doubt whatever that the exemption granted to the respondent from 9-8-1985 when it fulfilled all the pr....
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....ne has to look into the ordinary meaning of the expression 'rags' and on that basis construe the Notification in question, the assessee would not be entitled to the concessional rate of excise duty inasmuch as the waste of gunny bags or jute bags would be called 'rags' in ordinary sense of the term. However, whether case can be decided with such simplistic overtones, is the question. We are of the view that the expression 'rags' appearing in the Notification has to be construed having regard to the attendant circumstances, the context in which the same is used in the said Notification as well as the purpose for which this term has appeared in the Notification. At the same time, it is also necessary to go behind the objective for which Notification itself is issued thereby giving it a purposive interpretation, which has become cardinal rule of interpretation. In our opinion, it is only after examining all these factors that the final decision should be arrived at." Tamil Nadu Small Indus. Coprn. Ltd. v. Collr. of C. Ex., Chennai 2009 (234) E.L.T. 413 (Mad.) "9. It is no doubt true that the learned single Judge has relied upon the decision of the S....
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....rted to only in the event the same give rise to anomaly or absurdity. The exemption notification must be construed having regard to the purpose and object it seeks to achieve. The Government sought for increase in industrial development in the State. Such a benevolent act on the part of the State, unless there exists any statutory interdict, should be given full effect. (See Vadilal Chemicals Ltd. v. State of A.P. (2005) 6 SCC 292)" 3.17 Further the Applicant would like to rely on the ruling of the Hon'ble Supreme Court in the case of Government of Kerala & Anr. Vs. Mother Superior Adoration Convent 2021 (3) TMI 93, wherein the Hon'ble Supreme Court has distinguished its own rulings which stated that the exemption notification has to be interpreted strictly: "22. A recent 5-Judge Bench judgment was cited by Shri Gupta in Commr. of Customs v. Dilip Kumar & Co. (2018) 9 SCC 1. The 5- Judge Bench was set up as a 3-Judge Bench in Sun Export Corporation v. Collector of Customs 1997 (6) SCC 564 was doubted, as the said judgment ruled that an ambiguity in a tax exemption provision must be interpreted so as to favour the assessee claiming the benefit of such exemption. ....
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.... vi. Visakhapatnam Customs. The applications were forwarded to the Office of the concerned Commissionerate's for their comments on 30.07.2025 & 22.08.2025. However, no responses/comments in this matter has been received from the office of the Commissioner of Customs, i. NS-V, JNCH, ii. Import-I, NCH, iii. Chennai Sea Customs, iv. Cochin Customs House, v. Kolkata Customs. 4.2 The Office of the Commissioner of Customs, Visakhapatnam vide their letter dated 08.09.2025 submitted the comments as under: I For the applicability of SI. No. 555 under Notification 50/2017 Para 3.2.2 As per the SI. No. 555 of the notification, ibid, the BCD is Nil subject to condition no. 84 which clearly states that, in case of breakup of the vessel the importer shall file a separate bill of entry if the vessel is taken for breakup post importation. Therefore, the SI. No. 555 exempts all imported vessels under heading 8906 from BCD Para 3.2.3 Going by the above SI. No. of the notification, the goods with description cable laying vessel under the heading 8906 is eligible for exemption from BCD. II For the applicability ....
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....ing was held on 13.08.2025 in the office of Customs Authority for Advance Ruling, Mumbai. Shri Shivrajan and Ms. Purva Juneja, Advocate / Representatives appeared for Personal Hearing on behalf of the applicant. The reiterated the contentions filed with the application that the cable laying vessel is being imported by the applicant on lease and the cables and other goods required for cable laying would be imported by the various customers of the applicant. They further contended that the import of cable laying vessel is exempted from BCD as per Sr. No. 555 of the Customs Notification No. 50/2017 dated 30.06.2017 and exemption of IGST is also available as per Sr. No. 557C of the said Notification subject to fulfilment of the condition of the Notification. They also relied upon an Advance ruling issued by this authority vide Ruling dated 08.08.2022 in their own case. They further submitted that there is no change made in the law in the last three years and that the ruling has been effective since then. They further submitted that they filed the application on similar line of facts and circumstances. No body appeared on behalf of the department in this matter. Discussion a....
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....4 Before proceeding to examine the eligibility to claim exemption from BCD under SI. No. 555 and from IGST under SI. No. 557C of Notification No. 50/2017 dated June 30, 2017, on import of a cable laying vessel, it is first necessary to determine the appropriate classification of the Cable lying vessel. A cable laying vessel is a special purpose ship designed and equipped to lay submarine cables under the seabed, and sometimes also to repair them. These vessels are not ordinary cargo or passenger ships, but specialized vessels with cable tanks, laying machinery, and positioning systems. The Chapter 89 of the Customs Tariff covers "Ships, boats and floating structures". The Chapter Heading 8906 covers "Other vessels, including warships and lifeboats other than rowing boats". The relevant tariff entries and HSN Explanatory Notes to Heading 8906 is reproduced below for ease of reference: Chapter/Heading/sub-heading/tariff item Description of goods 8906 OTHER VESSELS, INCLUDING WARSHIPS AND LIFEBOATS OTHER THAN ROWING BOATS 89061000 Warships 89069000 Other "This heading covers all vessels not included in the more specific headings 89.01 to 89.05. ....
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....is appropriately classifiable under Chapter Heading 8906. Further, it is imported for the purpose of laying submarine cables on the seabed and not for breaking up. Accordingly, the said vessel is eligible for exemption from BCD under SI. No. 555 of Notification No. 50/2017-Customs, dated 30.06.2017. Eligibility to claim exemption from IGST under SI. No. 557C of Notification No. 50/2017 dated June 30, 2017 on Cable lying vessel 6.5.3 The relevant extract of the Customs Notification No. 50/2017 dated June 30, 2017 is extracted as below for ease of reference: S. No Chapter/Heading/sub-heading/ tariff item Description of goods Standard rate (Basic Customs Duty) IGST Condition No. (1) (2) (3) (4) (5) (6) 557C 89 Ships/ Vessels for providing cable laying or repairing services in Indian Customs waters -- Nil 105 From the above, it is evident that SI. No. 557C of the said Notification grants full exemption from payment of IGST on ships/vessels falling under Chapter 89, when imported for the purpose of providing cable laying or repairing services in Indian Customs waters, subject to fulfillment of Condition No, 105. In the pr....