TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1403
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.... No. 50/2017-Customs for the same product. 2. Submission by the Applicant: 2.1 The Applicant is a private limited company and has been granted a valid Importer-Exporter Code ("IEC") Number under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. Therefore, the applicant is covered under the definition of the Applicant under Section 28E(c)(i) of the Customs Act, 1962. 2.2 The Applicant submitted that Sun Petrochemicals Private Limited ("Sun Petro") has been awarded a Revenue Sharing Contract (Block Name CB-OSHP-2021/1, CB-OSHP-2021/2, CB- OSHP-2021/3 and CB/OSDSF/GULFA/2021) and petroleum exploration license from Government of India and been duly appointed as 'Licensee' authorized to prospect for petroleum, mineral and natural gas in the Cambay Basin, Gujarat. Pursuant to this License, Sun Petro has engaged with M/s Atakumul Al Dahiya Oil & Natural Gas India Pvt. Ltd. ("AAOG") and Mir Projects and Consultants Pvt. Ltd. ("Applicant") for offshore seismic survey. Accordingly, the Applicant in co-ordination with Sun Petro and AAOG is engaged as a 'sub-contractor' by Sun Petro for import and supply of certain equipment to be used for the off-....
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....ion: In the oil and gas industry, seismic surveys are used to locate and estimate offshore oil and gas reserves. Seismic surveys result in detailed images of and can provide crucial information on subsurface rock layers. This process involves emitting acoustic waves, recording their reflections and measuring their characteristics. Through this technology, oil and gas companies gain valuable insights into potential reserves. Seismic surveys can be conducted on land and in the ocean. The oil and gas industry uses both types of surveys - to determine where oil and gas reserves are on land and in the sea. Both surveys use the same process to complete seismic imaging of earth's subsurface layers. For offshore testing, a vessel with long floating cables, or streamers, and specialized microphones, called hydrophones, attached to the cables sits on the water's surface. Air guns located behind the vessel and in front of the streamers, shoot blasts of air into the water at regular intervals, which creates acoustic wavelets. These wavelets travel through subsurface layers of rock then travel back through the water to the hydrophones. Data is recorded based on distance the wavelets had....
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....environment. Upon completion of work, the stations are lifted on board, and the recorded seismic material is retrieved for further processing. 2.7 Classification of PICKET: The applicant submitted that the PICKET equipment, is a geophysical hydroacoustic seismic exploration equipment for conducting marine seismic exploration. 2.7.1 Structural Characteristics: It is designed for determining the location of bottom equipment during marine seismic exploration by installing removable beacons (transponders) on seismic streamers and bottom stations and positioning slow-moving elements of underwater engineering structures, production complexes, pipeline facilities, etc. The PICKET instrument includes: - a set of removable beacons-responders (transponders); - an interrogating device (pinger) lowered on a rod from the vessel with a connecting cable to the surface station (positioning stations); - complex operator console (industrial computer) for processing the received data with a tablet displaying the processing results. 2.7.2 Functional Characteristics: The applicant submitted that functionally, the PICKET instrument is a hydroacoustic geophysical seism....
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....the surface and are detected by the hydrophones. The acoustic characteristics, particularly strength and timing, of the reflected signals can be analyzed by computer software to provide information on and imagery of geological features below the seafloor, including oil and gas deposits. 2.8.2 BigShot Seismic Source Controller: The applicant submitted that the BigShot is also a geophysical precision survey instrument. It is a Seismic Source Controller instrument which provides in-water firing control and sensor timing monitoring of the seismic airguns and is capable of receiving hydrophone data from the field hydrophones. 2.8.2.1 Structural Characteristics: The applicant submitted that the BigShot will synchronize 2 to 96 (128 optional) marine seismic sources, with 0.1 msec resolution. It features automatic Continuity/Leakage testing of Solenoid/Sensor lines, as well as monitoring of source Depth and string Pressure. It The BigShot also monitors Manifold Pressure over 2 channels, offers Summed Sensor Timebreak detection, and allows configuration for Hydrophone, Shuttle, or PCB sensors. BigShot can handle Near Field hydrophone acquisition at 1 kHz with 16-bit data. 2.8.3 Big....
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....d high precision. Most of them are used mainly for scientific purposes (laboratory research work, analysis, astronomy, etc.), for specialized technical or industrial purposes (measuring or checking, observation, etc.) or for medical purposes. The Chapter includes in particular: (A) ... (B) Instruments and apparatus designed for certain specifically defined uses (surveying, meteorology, drawing, calculating, etc.). Some of these instruments are specified in certain headings, for example, ...., other instruments and apparatus are covered by more general descriptions in headings which refer to a particular science, industry, etc. (e.g., astronomical instruments of heading 90.05, surveying instruments and appliances of heading 90.15, ... ) ... 3.4 The applicant further submitted that HSN Explanatory Note (VI) to Heading 9015 of HSN discusses various geophysical equipment and though several geophysical equipment are excluded specifically identifies that Seismic survey instruments remain covered in this heading. Further, it specifically states as under: "Seismometers and seismographs, for recording the time, duration and intensity of moveme....
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....ipole Shear Sonic Imager Applications, Schlumberger at www.slb.com/pdf. Likewise, the ENs to heading 9015, HTSUS, also provide for, (5) [a]pparatus for measuring the inclination of a borehole. Essentially, evaluating the tendencies of a given borehole is one of the primary functions of the DSST. According to the literature provided, the DSST receives and transmits sonic waveforms to evaluate and analyze the strength, porosity and permeability of subsurface rock formations. ... 'By application of GRI 1, the DSST is classified under heading 9015, HTSUS. Specifically, the complete DSST is classified in subheading 9015.80.8040, HTSUS, which provides for: "Surveying (including photogrammetrical surveying), hydrographic, oceanographic,, hydrological, meterological or geophysical instruments and appliances, excluding compasses; rangefinders; parts and accessories thereof: Other: Other, Geophysical instruments and appliances." The 2006 column one, general rate of duty is free. ' 3.6 The applicant submitted that the Geophysical Seismic Survey Equipment proposed to be imported by the Applicant is equipment that is structurally and functionally designed and used f....
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....The instrument is characterized by its high finish and high precision characteristics and is used mainly for scientific purposes and for specialized technical or industrial purposes i.e. seismic survey. It is an instruments or apparatus designed for a certain specifically defined uses i.e. seismic survey particularly for prospecting for minerals. In these instruments the seismic waves by the firing of an explosive charge, are converted into electric impulses. Hence, it is liable to be classified under HS Code 90158030. 3.9 Eligibility of Benefit Under Sr.404 Of Notification No 50/2017-Cus: The applicant submitted that Notification No. 50/2017-Cus. provides exemption to specified goods listed in the Annexure thereto, from so much of the Customs duty leviable thereon as is in excess of the amount calculated at the rate specified in Column (4) of the said Table, when it fulfils the condition prescribed under Column (6) of the Notification. The relevant Sr. No in question is Sr. No. 404 and is extracted below: Sr CTH Description Std. Rate IGST Condition No. 404 27, 29, 31, 38, 39, 73, 82, 84, 85, 87, 89 or 90 Goods specified in column (3) of List 33 when i....
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.... to Sr. 404 provides as under: "For the purposes of this notification, a specified person is a licensee, lessee, contractor or sub-contractor, as defined below :- (i) 'licensee' means a person authorised to prospect for mineral oils (which include petroleum and natural gas) in pursuance of a petroleum exploration license granted under the Petroleum and Natural Gas Rules, 1959 made under the provisions of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) (ii) 'lessee' means a person authorised to mine oils (which include petroleum and natural gas) in pursuance of a petroleum mining lease granted under the Petroleum and Natural Gas Rules, 1959 made under the provisions of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) (iii) 'contractor' means a company (Indian or foreign) or a consortium of companies with which the Central Government has entered into an agreement in connection with petroleum operations (consisting of prospecting for or extraction or production of mineral oils) to be undertaken by such company or consortium (iv) 'sub-contractor' means a person engaged by lic....
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.... the petroleum exploration License granted by the Government of India. Further, Sun Petro has engaged the Applicant as a 'sub-contractor' for the purpose of conducting petroleum operations i.e. marine seismic surveys on its behalf. The Applicant submitted that they are engaged as a 'sub-contractor' by Sun Petro vide letter dated 26.03.2024 and Memorandum of Understanding (MOU) dated 14.02.2024 with respect to import of geophysical seismic survey equipment and provision of 3D Seismic Survey, Data Acquisition and processing Services in Block CB-OSHP-2021/1, CB-OSHP-2021/2, CB-OSHP-2021/3 & CB-OSDSF-GULF- A/2021 in Gujarat Gulf of Khambhat in Cambay Basin West Coast of India under Contract No. Sun Petro-AADOG/Gujarat/3D Seismic A&P/2023-24/MISC-670 Dated 29.02.2024 by M/s Sun Petro. 3.12.2.1 The applicant further submitted that the exemption provided in Sr. 404 was earlier provided under Sr. 214 of Notification No. 21/2002-Cus. In the context of the earlier notification, it was clarified by C.B.E. & C. in a Circular dated 16-5-2013 in Para 2.4 which reads as under :- "2.4 Whether each sub-contractor (of a contractor) is required to enter into a contract wit....
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....fil the condition as mentioned at Condition No. 29. It is undisputed that ONGC are licensee for petroleum operations undertaken under petroleum exploration licences or mining lease post-1-4-1999 granted by the Government of India. The condition as reproduced above, of the notification, clearly indicates that the goods can be imported by ONGC or a sub-contractor which are used in connection with the petroleum operations to be undertaken. In the case in hand, it is undisputed that vessel LTS 3000 is used in the petroleum operations as can be ascertained from the Essentiality Certificate issued by the DGH. ... 13.4 A plain reading of the Essentiality Certificate as reproduced hereinabove would indicate that the vessel LTS 3000 is required for the petroleum operations undertaken by the ONGC. This Essentiality Certificate is affirmed as correct Essentiality Certificate by the High Court of Bombay in the case of L&T Ltd. in a writ petition in favour of petitioner, - reported at 2013 (298) E.L.T. 217 (Bom.). The issue of Essentiality Certificate now stands decided in favour of the main appellant as there is no dispute that the Essentiality Certificate as required under n....
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....iolated by the main appellant. Assuming that there is nothing on record to indicate, as such, even if there is a violation of condition of notification, the customs duty liability gets fastened on ONGC and not the main appellant. 13.7 Be that as it may, there is no dispute as to the fact that the vessel LTS 3000 was used only for the petroleum operations as per the contract awarded to L&T. The exemption granted by the notification is to be extended to the goods to be used in connection with petroleum operations under petroleum exploration licence which is undisputedly complied with by the imported vessel LTS 3000. We find strong force in the submission made by the counsel that the terms contractor and sub-contractor have not been defined under Customs Act, nor in the notification or any other statute, in such a situation the meaning needs to be looked into the various dictionaries. On reading the definition of 'sub-contractor' in Black's Law Dictionary, which reads as "a sub-contractor is one who is awarded a portion of an existing contract by a contractor" in the case in hand the appellant is sub-contractor as per the agreement entered by ONGC with L& T." 3....
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.... Gujarat Gulf of Khambhat in Cambay Basin West Coast of India. Further, requisite Undertaking from M/s Sun Petro, the Licensee and the Applicant as the sub-contractor is also issued, specifically undertaking that it will be liable to pay duty, fine or penalty that becomes payable, if any of the Conditions of Sr. 404 of Notification No. 50/2017-Customs are not complied with by the Applicant. Hence, in the present facts, the Applicant fulfils the requirements of Condition No. 48 of Sr. 404 of Notification No. 50/2017-Customs and eligible to claim benefit of "NIL" Customs duties on imports of goods under List 33. 3.13 Conclusion on Eligibility Under Sr 404 of Notification No. 50/2017-Customs: The applicant submitted that the requirements of Sr. 404 for availment of "NIL" Customs duty is satisfied by the Application, i.e .: (a) The Goods proposed to be imported are classified under heading 9015 and specified in row 11 of List 33 of Notification No. 50/2017-Cus (b) The Applicant is a "sub-contractor" engaged by a Licensee/Lessee or Contractor and is a "specified person". (c) The Applicant satisfies the Conditions prescribed under Condition No. 48 of the Not....
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....pon an US CROSS Ruling NO. HQ W968458. On specifically asked to provide literature about the subject goods, they sought some time which was permitted. Noone appeared for the hearing from the departments side. 6. Additional Submissions: 6.1 The applicant vide their email dated 30.04.2025 submitted a copy of the document bearing No. SunPetro/SONG/Modhera(MU)/E&P/MoEF&CC/2019/623 dated 14.02.2019 which was addressed to The Member Secretary, Industry 2, IA Division, Indira Prayavaran Bhawan, Ministry of Environment, Forest and Climate Change, Jor Bagh, Aliganj, New Delhi - 110 003 from Shri Padam Singh, President, Sun Petrochemmicals Private Limited regarding a query raised for the Proposal No. IA/GJ/IND2/81587/2009; J-11011/730/2009-IA II(I) for onshore development and production of Oil & Gas from wells in the existing PML area of 12.7 Sq. km of Modhera Field at Village Matrasan, Tehsil Becharaji, District Mehsana (Gujarat) by Sun Petrochemicals Private Limited - Environmental Clearance. 6.2 Further, the applicant vide its letter dated 9.06.2025 (received in the office of CAAR on 09.07.2025) submitted that Sun Petrochemicals Private Limited ("Sun Petro") has been gra....
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.... ('CTH') 90158030? Question 2: Whether the said 'Geophysical seismic Survey Equipment' which is proposed to be imported by the Applicant would be eligible for the benefit of Sr. 404 of Notification No. 50/2017- Customs, on fulfilment of the criteria and conditions prescribed thereunder? 7.3 At the outset, I find that the issue raised at the Sr. No. 08 in the CAAR-1 form is squarely covered under Section 28H(2) of the Customs Act, 1962, being a matter related to the classification of goods and eligibility to avail exemption under a notification issued under Section 25(1) of the Customs Act, 1962. Further, I find that Section 28E (c) defines the 'Applicant' as any person holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; or exporting any goods to India; or with a justifiable cause to the satisfaction of the Authority, who makes an application for advance ruling under Section 28H. In this matter, the applicant holds a valid Importer-exporter Code Number, thereby satisfying one of the criteria mentioned under the definition of the Applicant under Section 28E and therefore....
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....rce Controller System & Bolt Long-Life Airgun 7.7 I observe on the basis of the literature provided by the applicant that the CORAL system includes bottom nodes, geophones, hydrophones, and seismic data acquisition systems intended for marine geophysical survey; the PICKET system is a hydroacoustic positioning system to locate and manage the placement of seismic instruments on the seabed; & the BigShot Controller and Bolt Airguns are seismic energy sources and trigger systems forming part of an integrated marine seismic acquisition system. These items are Special-purpose, high-precision, scientific instruments and designed and used exclusively for geophysical surveys, specifically for oil and gas prospecting. 7.8 Since the product under consideration here is a special purpose, high-precision, scientific instrument used for Geophysical seismic surveys, the CTH 9015 appears to be the most probable one for the classification of these instruments as it covers "Surveying (including photogrammetrical surveying), hydrographic, oceanographic, hydrological, meteorological or geophysical instruments and appliances, excluding compasses; rangefinders". The relevant excerpts of the Headin....
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....mission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function." 7.11 On going through Note 3 and Note 4 to Section XVI, I find Note 4 to be more relevant here in deciding the classification of the subject goods as in this case, there are three complex system of instruments connected together to perform the function of Geophysical Seismic Survey, which is clearly covered under Tariff Item 9015 80 30 "Geophysical Instruments". 7.12 Further, I have also gone through the relevant HSN explanatory Notes for Heading 9015. The relevant excerpts regarding the Geophysical Instrument are reproduced as under: "(VI) GEOPHYSICAL INSTRUMENTS Many geophysical instruments are excluded, for example, gas, sludge or soil analysis apparatus, photoelectric fluorometers and fluoroscopes (instruments using ultra-violet light to detect or identify numerous substances) (heading 90.27); electric or electronic measuring instruments (e.g., instruments for measuring resistivity, radioactivity....
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....cant would merit classification in terms of Chapter Note 1 and 2 to Chapter 90 of the Import Tariff i.e. part of general use would be classified according to their constituent material; parts and accessories which are goods included in any of the headings of this Chapter or of Chapter 84, 85 or 91 (other than heading 8487, 8548 or 9033) would be classified in their respective headings; and other parts and accessories, if suitable for use solely or principally with Geophysical Seismic Survey Equipment would be classified under Tariff Entry 9015 90 00. 7.15 Eligibility of Benefit under Sr. No. 404 of Notification No. 50/2017-Cus dated 30.06.2017: The applicant is seeking an exemption benefit for the product under Sr. No. 404 of Notification No. 50/2017-Cus dated 30.06.2017. The relevant excerpts of the exemption notification are as under: Sr. No. Chapter or Heading or Sub- Heading or Tariff Item Description of Goods Standard Rate Integrated Goods and Services Tax Condition No. 404 25, 27, 28, 29, 31, 34, 35, 36, 38, 39, 40, 56, 69, 73, 74, 82, 84, 85, 87, 89 or 90 Goods specified in column (3) of List 33 when imported by a specified person, in relation w....
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.... Sub-Heading or Tariff Item" at Sr. No. 404 of Notification No. 50/2017-Cus. dated 30.06.2017, thereby it satisfies the first condition to claim the notification benefit. I further find that for the purpose of this notification, a specified person is either a licensee authorized to prospect for mineral oils (which include petroleum and natural gas) in pursuance of a petroleum exploration license granted under the Petroleum and Natural Gas Rules, 1959 made under the provisions of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) or a lessee authorised to mine oils (which include petroleum and natural gas) in pursuance of a petroleum mining lease granted under the Petroleum and Natural Gas Rules, 1959 made under the provisions of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) or a contractor with which the Central Government has entered into an agreement in connection with petroleum operations (consisting of prospecting for or extraction or production of mineral oils) to be undertaken by such company or consortium or a sub- contractor means a person engaged by licensee/lessee or contractor for the purpose of conducting petroleum operations on behalf....
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....tion No. 50/2017-cus dated 30.06.2017 and it is AAOG, Sub-contractor who has engaged the applicant and signed a memorandum of understanding, which the applicant claims to have the approval of the original Licensee i.e. SunPetro. However, no direct contract or Memorandum of Understanding (MoU) between the original Licensee and the Applicant has been placed on record and fundamentally, the Applicant is more akin to a Sub-Subcontractor. In the instant case, although there is no term as sub-subcontractor in the notification, but the applicant has submitted a copy of letter No. 1054 dated 26.03.2024 from SunPetro, where SunPetro i.e. original licensee has acknowledged and approved the inclusion of the applicant as subcontractor for the exclusive purpose of supplying of certain equipment to be used in connection with the seismic survey activity for the purpose of conducting specified petroleum operations strictly under the contract entered with AAOG. Furthermore, as previously discussed, Clause 3.16 of the contract between SunPetro and AAOG expressly permits subcontracting of portions of the contract, subject to SunPetro's approval. In this instance, such approval has been duly gr....
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....g that he falls in the category of a specified person and give an undertaking to pay duty, fine or penalty that becomes payable, if any of the Conditions of this notification are not complied with; (b) the importer is a sub-contractor, he produces to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, at the time of importation, a certificate issued by a senior official who is authorised by the Board of Directors to issue such a certificate, of the concerned licensee or lessee or contractor certifying that the goods are intended for specified purpose along with an undertaking from such licensee or lessee or contractor and the subcontractor, as the case may be, liable to pay duty, fine or penalty that becomes payable, if any of the Conditions of this notification are not complied with; (c) the importer or any specified person (transferor), seeks to transfer the goods to any other specified person (transferee),- (i) the transferor shall give an intimation to the concerned Assistant Commissioner of Customs or the Deputy Commissioner of Customs, as the case may be, about such transfer and get himself discharged in ....
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.... No. 50/2017-Cus dated 30.06.2017 is conditional in nature and to avail the benefits of the same, the applicant being a sub-contractor would need to prove their status as a sub-contractor to the satisfaction of the Deputy/Assistant Commissioner of Customs at the port of import. For this purpose, the following documents need to be submitted/produced at the time of importation to the Deputy Commissioner or Assistant Commissioner of Customs at Import Port: i. A document from the original licensee confirming/acknowledging that the applicant is engaged as a sub-contractor "for the purpose of supplying necessary equipment for petroleum operations on their behalf" ii. A Certificate from the original licensee certifying that the goods are for petroleum operations along with the list of goods being imported iii. A certificate by senior official of original Licensee certifying that the goods are intended for specified purpose i.e. for petroleum operations. iv. An undertaking from original licensee that they are liable to pay duty, fine or penalty that becomes payable, if any of the Conditions of this notification are not complied with v. An undert....