TaxTMI 
TaxTMI 
2026 (10) TMI 20
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....lowing question in respect of goods proposed to be imported: "Whether the goods proposed to be imported by the applicant are eligible for the duty exemption provided at SI. No. 60 of Table II of the Notification No. 45/2025-Customs dated 24.10.2025." 2. The applicant, M/s. Pinaka Aerospace Solutions Pvt. Ltd., vide its application dated 09.02.2026, received in this office on 17.02.2026 and additional submission received in this office on 04.08.2026, has submitted as follows: 2.1 The applicant is a services and solutions provider in the field of avionics, electronic- warfare and communication systems established in 2007. The applicant proposes to be imported goods namely "Key Components of MILDS Block 2" from HENSOLDT, Germany and to carry out the sub-assembly and final assembly, at its facility at Bengaluru, of the HENSOLDT MILDS AN/AAR-60 Block 2 Missile Warning System ("MILDS Block 2 Missile Warning System"). 2.2 'MILDS Block 2 Missile Warning System' is described as a UV-based Missile Warning System developed by HENSOLDT, a German aerospace and defence electronics company. It is stated to be a passive, true-imaging sensor system optimised to detect the ....
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...." inside each individual sensor head, performing real-time high speed data processing to detect and classify the UV signatures of incoming missiles. It detects small arms or RPGs and triggers automatic countermeasures (flares/DIRCM) within millisecond. MILDS Block 2 3. MILDS F SUII Coupled V2.5 series 8543 90 00 The primary digital bridge between the individual Front End (M2FE) sensor modules and the aircraft's Mission Management System / Countermeasure Signal Processor. The terms "Coupled" refers to its ability to synchronize data streams from multiple sensor heads (usually 4 to 6) to provide a unified. 360° spherical protection picture without data lag. MILDS Block 2 2.6 The applicant further submits that the licensor, HENSOLDT, will not transfer the production process or technology relating to the key components. The said components will be supplied in fully finished form and accompanied by a Certificate of Conformity (CoC). The applicant further states that, pursuant to the Statement of Work (SoW), it will establish a sub- assembly and final-assembly production line for 'MILDS Block 2' at its production and manufacturing facility. Thereafter....
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....Parts, sub-assemblies, spares, accessories, tools, testing equipment, literature for goods like artillery weapons, rifles, aircrafts, etc. except for 12.7mm SRCG, 155mm/45 Cal. Dhanush, L-70 Gun, 84mm RL Mk-III, AK- 630 Naval Guns, Light Machine Gun, MAG Gun: Provided that nothing contained in this S. No. shall have effect on or after the 1 st July, 2029. Nil Nil 17 The relevant Condition No. 17 of the Annexure to Table II reads: "17. If imported into India by the Ministry of Defence, or the Defence forces, or the Defence Public Sector Units, or other Public Sector Units, or any other entity, for the Defence forces, subject to the following conditions, namely :- (i) an officer not below the rank of Joint Secretary to the Government of India in the Ministry of Defence certifies. (a) the quantity, description and technical specifications of the imported goods; and (b) that the said goods are intended for the purpose of and use by the defence forces only and recommends the grant of exemption to the imported goods; (ii) the importer shall, at the time of import, furnish the said certificate to the Deputy Commissioner of Custom....
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.... essential for missile detection and aircraft protection. In support of this contention, the applicant relies upon the definition of "subassembly" in the McGraw-Hill Dictionary of Engineering, which describes a subassembly as a "structural unit, which, though manufactured separately, was designed for incorporation with other parts in the final assembly of a finished product." The applicant submits that, in the present case, the subject goods are not standalone items but are specifically engineered for integration into the aircraft's missile-warning and defence system. 3.9. Without prejudice to the above contention, the applicant submits that, even if the subject goods are not considered essential components or sub-assemblies of the aircraft, they would nevertheless qualify as "accessories" to the aircraft. 3.10 In Black's Law Dictionary (5th Edition) 'accessory' is defined as, "anything which is joined to another thing as an ornament or to render it more perfect, or which accompanies it. er is connected with it as an incident, or as subordinate to it, or which belongs to or with it, adjunct or accompaniment. A thing to subordinate importance. Aiding or contrib....
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....t supplementary systems that improve overall performance 3.10.3 It is also to be noted that the tools, accessories, parts etc. of an aircraft are all included in this entry. Further, the description is a very broad and inclusive one which can encompass most of the goods related to defence purposes with only seven specific exceptions listed. This broad nature can be inferred by the usage of the term "etc." in the description and the inclusion of "Any Chapter" in this entry. 3.11 The Supreme Court's decision in Siddeshwari Cotton Mills (P) Ltd vs Union Of India & Anr (1989 AIR 1019, 1989 (2) SCC 458) explains the principle of "ejusdem generis" as follows; 7. The expression ejusdem generis, 'of the same kind or nature' -- signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the test with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding. If a list or string or family of genus-describing terms are followed by wider or residuary or sweeping-up words, then the verbal context and the linguistic implications of the prece....
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....at the goods are eligible for exempted duty if imported into India by any entity for use by defence forces. It is submitted that the usage of the term "any other entity" shows that imports by the private entities like the Applicant are also eligible for benefit under this notification, if they fulfil the other conditions. The availability of exemption is further subjected to the certification of officer in the prescribed rank regarding the quantity, description, technical specifications of the imported goods, and that the said goods are intended for the purpose of and use by the defence forces only and recommends the grant of exemption to the imported goods. 4. Additional submissions by the applicant 4.1. Pursuant to the direction of this Authority at the hearing, the applicant placed on record documents said to establish its capacity to manufacture defence-related equipment in India: a Registration Certificate of the Directorate General of Aeronautical Quality Assurance (DGAQA), Ministry of Defence, for "Design, Development & Production and MRO" of specified defence aviation stores (valid to 31.12.2028); vendor-renewal letters of 9 Base Repair Depot (Pune) and 12 Base Rep....
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....ional Commissionerate 5.1 The applicant, in Form CAAR-1, has indicated that the subject goods are proposed to be imported within the jurisdiction of the Office of the Commissioner of Customs, Bengaluru, C.R. Building, Bengaluru - 560 001. Accordingly, the application, along with the covering letter and relevant documents, was forwarded to the jurisdictional Commissionerate on 19.02.2026, requesting their comments and views on the issues raised in the said application. 5.2 In view of the foregoing facts and circumstances of the matter, the jurisdictional Commissionerate, i.e. Bengaluru City Customs Commissionerate, vide its letter dated 05.03.2026, has examined the matter and furnished its detailed comments/views thereon. The comments furnished by the jurisdictional Commissionerate, which are relevant for consideration of the issue under examination, are reproduced below for ready reference :. (i) Eligibility of the applicant under Section 28E(c): The applicant fulfils the eligibility criteria prescribed under Section 28E(c)(i) of the Customs Act, 1962, which requires the applicant to be an importer or exporter holding a valid Importer Exporter Code (IEC). In the pres....
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....on of the requisite certificate before the proper officer at the time of importation, as stipulated therein. (iii) Verification under Proviso 1 to Section 28I(2) of the Customs Act: As per the records available with the jurisdictional Commissionerate, there are no pending proceedings or cases in respect of the question raised in the present application involving the applicant before any Officer of Customs, the Appellate Tribunal, or any Court of Law. It has further been stated that the issue raised in the present application has neither been previously decided nor is presently pending adjudication before the Appellate Tribunal or any Court of Law in the applicant's own case. 6. DETAILS OF PERSONAL HEARING: 6.1 A personal hearing was held on 06.08.2026, wherein the authorised representative appeared on behalf of the applicant and reiterated the submissions made in the application and the additional written submissions. During the personal hearing, the Authority sought documents evidencing the applicant's eligibility to manufacture defence-related equipment in India. The applicant subsequently furnished the said documents, which have been duly taken on record a....
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.... 1992. Accordingly, the Applicant is duly recognised as an importer under the applicable provisions of the foreign trade and customs laws and therefore. fulfils the requisite eligibility criteria to seek an Advance Ruling in respect of the proposed import transactions and the goods intended to be imported into India. 7.4 Sub-section (1) of Section 25 of the Customs Act, 1962, is reproduced below: "(2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon." The applicant seeks an Advance Ruling as to whether the goods proposed to be imported are eligible for the benefit of exemption from duty under Notification No.45/2025-Customs dated 24.10.2025. In this regard, sub-section (1) of Section 25 of the Customs Act, 1962 empowers the Central Government, in the public interest, to exempt, by notification, goods of the specified description from....
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.... is, -- (a) already pending in the applicant's case before any officer of customs, the Appellate Tribunal, or any Court; (b) the same as in a matter already decided by the Appellate Tribunal or any Court: PROVIDED FURTHER that no application shall be rejected under this sub- section unless an opportunity has been given to the applicant of being heard: PROVIDED ALSO that where the application is rejected, reasons for such rejection shall be given in the order." On examination of the records and submissions available on record, it is observed that the present application is not hit by any of the restrictions or exclusions prescribed under Section 28-I of the Customs Act, 1962. In particular, the question raised in the present application is neither pending in the applicant's case before any officer of Customs, the Appellate Tribunal or any Court, nor is it the same question as has already been decided by the Appellate Tribunal or any Court in the applicant's case. Accordingly, the present application is not barred by the provisions of Section 28-I of the Customs Act, 1962 and is, therefore, liable to be admitted for consideration on ....
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.... to six; to generate a unified and continuous 360° spherical protection picture. This facilitates seamless and real-time transfer of threat information without significant data latency. thereby enabling timely detection, assessment and response to incoming threats. 7.8.1 After assembly, these three keys are used for the assembly of the MILDS Block 2 Missile Warning System, a UV-based missile warning system designed for installation on a wide range of helicopters and aircraft. The system is a passive, true-imaging sensor optimized to detect the radiation signature of the exhaust plume of an approaching hostile missile in the UV solar-blind spectral band. It is designed to detect incoming missile threats and indicate their direction of arrival, thereby providing maximum warning time to the host platform. 7.8.2 Passive, Infrared-Red Surface to Air Missiles (IR SAMs) pose an increasing threat to tactical aircraft and their crews. It is further submitted that a significant number of aircraft lost in current and recent conflicts have been brought down by ground-based infrared-guided Infrared-Red Surface to Air Missiles (IR SAMs) (IR SAMs). 'MILDS Block 2 Missile Warning Sys....
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....) the quantity, description and technical specifications of the imported goods; and. (b) that the said goods are intended for the purpose of and use by the defence forces only and recommends the grant of exemption to the imported goods; (ii) the importer shall, at the time of import, furnish the said certificate to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be. 7.9.2 It is pertinent to mention that the import goods conform to the description specified in Column (3) of the relevant entry of the said Notification, namely, "Parts, sub-assemblies, spares, accessories, tools, testing equipment, literature for goods like artillery weapons, rifles, aircrafts, etc., except for 12.7mm SRCG, 155mm/45 Cal. Dhanush, L-70 Gun, 84mm RL Mk-III, AK-630 Naval Guns, Light Machine Gun, MAG Gun", such goods are eligible for exemption from the customs duty and integrated tax specified in Columns (4) and (5), respectively, subject to fulfilment of the conditions prescribed under Condition No. 17 of Table II to the said Notification. Also, the exemption is contingent upon the imported goods falling within the scope of the specified....
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....and that the prescribed documentary requirements under Condition No. 17 have been duly fulfilled. 7.9.5 The components have been declared under headings as disparate as 9031 (measuring/checking instruments), 7610 (aluminium structures) and 8543 (electrical machines having individual functions). Because the claim under SI. No. 60 spans "Any Chapter" and turns on function and end-use product rather than heading, the appropriate classification of each item is a matter for assessment at the time of import and does not, by itself, determine entitlement to the exemption. 7.10 The applicant relied on Siddeshwari Cotton Mills (P) Ltd. v. Union of India & Anr., 1989 AIR 1019; 1989 (2) SCC 458, to contend that a missile-warning system fails within the scope of the entry by virtue of the residuary expression "etc." Two points are material. First, the expression "goods like ... aircrafts, etc." identifies the end-use products for which the parts, sub- assemblies and accessories are imported; it does not describe the imported goods themselves. Second, in the present case, the relevant end-use product is the aircraft, and not the missile- warning system. Since "aircrafts" is expressly spec....
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.... each of a part, sub-assembly and accessory, but whether they answer to at least one of these descriptions. On a consideration of the material placed on record, and for the reasons set out below, I am satisfied that the subject goods meet this requirement. 7.13.1 On the applicant's own technical description, the three components are prefabricated units - an imaging-optics lens, a sensor front-end, and an interface/coupling unit - manufactured separately but engineered to be combined into the 'MII.DS Block 2 Missile Warning Systems'. That accords with the ordinary engineering meaning of a "sub- assembly" as a unit "which, though manufactured separately, was designed for incorporation with other parts in the final assembly of a finished product." The finished product into which they are incorporated - the 'MILDS Block 2 Missile Warning Systems' - is in turn fitted to the aircraft as an element of its electronic-warfare suite. The components are therefore sub-assemblies destined, through the 'MILDS Block 2 Missile Warning Systems', for the aircraft and answer the description of "sub-assemblies ... for goods like ... aircrafts". 7.13.2 Even if the sub-....
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....trations with the India Air Force (IAF) Base Repair Depot and Hindustan Aeronautics Limited (HAL), and membership of Society of Indian Defence Manufacturers (SIDM) is consistent with, and lends support to, the stated end- use for the Defence forces only. 7.16 The End-Use Certificate (EUC) dated 16.06.2026 submitted by the applicant, is reproduced below: Upon perusal of the aforesaid End-Use Certificate (EUC) in respect of the goods proposed to be imported, it is observed that the key components of MILDS AN/AAR-60 Block 2, namely, (i) MILDS F SUOF Lens, (ii) MILDS F SUII Coupled, and (iii) Front End (M2FE), are intended to be used for the manufacture of "MILDS AN/AAR-60 Block 2 Sensors as a part of the EW Suite for MI-17 V5 and MLH Helicopters operated by the Indian Air Force, Ministry of Defence, Government of India." The End-Use Certificate (EUC) is conclusively establishes the defence nexus and intended end-use of the goods. The End-Use Certificate establishes that the imported goods are intended exclusively for use in MI-17 V5 and MLH Helicopters operated by the Defence Forces under the Ministry of Defence, Government of India. The contents....
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....ion, confirm that the goods are intended for the specified purpose and for use exclusively by the Defence Forces and recommend the grant of exemption in respect of the imported goods. The requisite certificate must have been required to be produced before the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, at the time of importation, for importation of the said goods and in order to avail the benefit of the exemption. The EUC is, therefore, relevant and persuasive evidence of the defence nexus and the identity of the intended end-use product, but it cannot substitute the certificate mandated by Condition No. 17. Accordingly, fulfilment of Condition No. 17 in respect of any particular consignment must be verified by the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, upon production of the requisite certificate at the time of importation. This Authority is concerned with the applicability of the notification to goods of the description under consideration; the actual availment of the duty exemption in respect of any consignment remains subject to fulfilment of Condition No.17 of the said notifi....
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....o. 60 of Table II of the Notification No.45/2025-Customs dated 24.10.2025, subject to the fulfilment of the applicable conditions and procedural requirements prescribed under Condition No. 17 of the Annexure to Table II of the said notification and verification by the jurisdictional Customs authorities at the time of importation, as set out in paragraph 8 above. 10. I rule accordingly. ============= Document 1 MILDS F SUOF Lens V2.1 83219848 (MILDSF SOUP Lens) MILDS F SUII Coupled V2.5 series 83198624. 3 (MILDS S SUII Coupled) Front End (M2FE) V2.1 50.2860.165.00 0 A 0 O O (Front End (M2FE)) Document 2 END-USE CERTIFICATE (EUC) FOR PRESENTATION TO THE EXPORT CONTROL AUTHORITIES OF THE FEDERAL REPUBLIC OF GERMANY This EUC is not applicable for sniper rifles, pump-guns, pistols and revolvers Section A - Parties Consignee (name, address and contact details) PINAKA AEROSPACE SOLUTIONS PRIVATE LIMITED KIADB Hi Tech Hardware Park, Plot 18, Rd Number 8, Mahadeva Kodigehalli, Bengaluru, Karnataka 562149 Mob- 9740022014 End-user (name, address and contact details) if different from consignee INDIAN AIR FORCE 12 BRD, AF, NAJAFGARH N....
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....er in whole or in part of integrated without the written approval of the Federal Office for Economic Affairs and Export Control (BAFA) of the Federal Republic of Germany New DELHI 16 7426 Place Dato Procuro inai Signature Original signature of the end-user &co inc.) /รหKS Somvansh Tu Jun / Gp Capt Comparly sti mp/Offic al seas H Name and tije ot signer : 15 HET* Section F- Decifration of commitment with regard to technology In accordance with the regulations of the Federal Republic of Germany that granting of an export license is dependent on the presentation of an EUC. we (1) certify that รยท we (I) are (am) the final end-user of the technology specified in section B รยท the technology will be treated strictly confidential . the technology will only be used for the end-use specified in section D - we (I) shall neither pass on the technology nor make knowledge available to parties other than specified in section A. We (I) further certify that the technology as well as derived goods of the technology specified in section B will - only be used for the end-use specified in section D. . remain in country REPUBLIC OF INDIA. or. cons....