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TMI Blog2018 (12) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of warship? 3. What procedure is required to be followed with Vendors if rate of tax applicable is as per entry no. 252 of the Schedule I. 4. If the rate of tax applicable to all or any of these items is 5% and if the vendor has charged higher rate of tax, whether the Company would be eligible for input tax credit at 5% or the actual tax paid to the Vendors? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such 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, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submission (Brief facts of the case), as reproduced verbatim, could be seen thus - Statement A Statement of relevant facts having a bearing on the question(s) raised 1. Mazagon Dock Shipbuilders Limited (MDL), is the India's leading Defence public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow the rank of a Rear Admiral of the Indian Navy or Coast Guard or Director General of Coast Guard or any other officer of the Indian Navy or Coast Guard; equivalent to the Joint Secretary to the Government of India, to the effect that the said goods are intended for the said use, is produced to the proper Officer. 6. Simiilar exemption was there under sr. no. 306C of Notification No.12/2012-CE, Similar exemption was there under Customs Law also at sr. no. 469A of Notification No. 12/2012-Customs as amended by Notification 54/2015-Customs dated 24h November, 2015. Under Sr No 306 C of Notification No 12/2012-CE exemption was given for raw material & parts of goods. There was clear distinguish between raw material & parts of goods. 7. Attention is also invited to the issue of applicability of GST Rates as per Ministry of Defence communication NO. 1/W/011/Gen Policy dated 10th November, 2017 enclosing therewith Ministry of Defence Letter No. 1/A/074/416/POLICY/GST/ATVP/B&C dated 03rd November, 2017. Further MAT Procurement Advisory 04/ 2017 dated 19th September, 2017 from Defence officials is also available. These communications give indication that Sl. No. 252 of Schedule I to N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CEGAT, MUMBAI. f. A component of component of a machine is a component of machine. - Audio Vision Electronics v, CC - 1987 (31) ELT 796 (CEGAT) = 1987 (7) TMI 254 - CEGAT, NEW DELHI. g. Part of refill is also a part of ball point pen (as refill is part of ball point pen) - Naianda Manufacturing co. v. CCE 1998 (102) ELT 289 27 RLT 150 (CEGAT) = 1997 (12) TMI 381 - CEGAT, NEW DELHI - quoted and followed in B D Sanghvi v. CCE 1999(113) ELT 571 (CEGAT) = 1998 (8) TMI 363 - CEGAT, NEW DELHI, where it was held that brass tip used in refill is part of ball point pen, as refill is essential part of ball point pen. 9. Attention is also invited of the facts that there is no precise definition provided for "Parts of goods" & therefore going to the dictionary definition which say "a separate piece of something, or a piece that combines with other pieces to form the whole of something" or "One of the pieces that together form a machine or some type of equipment" 10. Attention is also invited in the para 13 of advance ruling in case of M/s. CS India steel Pvt ltd vs The Comm of Central Excise Mangalore & Comm of Custom & CE, Panaji (Goa) = 2009 (2) TMI 25 - AUTHORITY FOR ADVANCE RULINGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out to them that the questions that they have raised in application are too general in respect of 'Parts' and are not very specific and therefore the application needs to be reframed and they need to give details of claimed 'Parts' alongwith their essentiality and use in warship and then only application can be considered. They requested that they be given one month to reframe their application and their application be considered filed from that date. The request was granted. The jurisdictional officer, Sh. K.W. Thaware, Supdt., appeared and stated that they have made a written submissions on which be taken on record and be considered. The applicant has filed reframed application on 14.05.2018 and admitted. The final hearing in the matter is held on 27.06.2018, Sh. Viren Thakkar, C.A. along with Sh. A. B. Shetty, Manager Taxation, Sh. S. P. Shenoy, GM., Sh. Rajiv Rathare, DG, Design, Sh. Punam Chand, ET Finance, appeared and made written and oral contentions as per details in their ARA. They submitted detailed list of items for submarines and warships on which they have requested for classification with respect to whether these items would be treated as parts of submarines and wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Central Excise earlier. 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. ---------We find that as per Cambridge English Dictionary: Part as a noun - a separate piece of something or a piece that combines with other pieces to form the whole of something ---------------One of the pieces that together form a machine or some type of equipment. It has other meanings also in other context which are not of relevance in present context like: -----------a single broadcast of a series of television or radio programme or Division of a story. -----------one Of two or more equal or almost equal measures of something etc. --------------------Further, we also find the definition of 'Spare Part' as per Wikipedia A spare part, spare, service part, repair part or replacement part is an interchangeable part that is kept in an inventory and used for the repair or replacement of failed units. Spare parts are an important feature of Logistics Engineering and Supply Chain Management. Thus in view of the above meanings/definitions of part/ parts/ Spare Part, we will be required to examine as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to determine whether a particular article is a component part of another article, the correct test would be to look both at the article which is said to be component part and the completed article and then come to a conclusion whether the first article is a component part of the whole or not. One must first look at the article itself and consider what its uses are and whether its only use or its primary or ordinary use is as the component part of another article. There cannot possibly be any serious dispute that in common parlance, components are items or parts which are used in the manufacture of the final product and without which, final product cannot be conceived of. 13. The meaning of the expression 'component' in common parlance is that 'component part of an article is an integral part necessary to the constitution of the whole article and without it, the article will not be complete'. 14. This Court, in Star Paper Mills (1989 (8) TMI 78 - SUPREME COURT OF INDIA) 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 comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T OF INDIA. In this case the appellant contended before the Hon SC that carbon paper does not lose its character as paper in spite of being subjected to chemical processes, and that ribbon is not an accessory but an essential part of the typewriter. While dismissing the appeal Court held that "A word which is not defined in an enactment has to be understood in its popular and commercial sense with reference to the context in which it occurs. It has to be understood according to the well-established canon of construction in the sense in which persons dealing in and using the article understand it." The Hon.SC further observed that "Bearing in mind the ratio of the above mentioned decisions, it is quite clear that the mere fact that the word 'paper' forms part of the denomination of a specialized article is not decisive of the question whether the article is paper as generally understood. 'the word 'paper' in the common parlance or in the commercial sense means paper which is used for printing, writing or packing purposes. We are, therefore, clear of opinion that Carbon paper is not paper as envisaged by entry 2 of the aforesaid Notification. Regarding ribbon also to which the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered as parts of a warship/ submarine. We further take up the 35 items mentioned in Annexure B, P-15B Consumables List. We find that all the 35 items mentioned, (like welding electrodes, adhesives, compressed air, industrial cutting gases, etc.), therein cannot be considered as parts of a warship/ submarine. They are essentially in the form of consumables and for reasons mentioned above cannot be considered as parts of a ship. We also find that the applicant has filed four addendums to Annexure B submitted by them. The first addendum to Annexure B is a P-75 Equipment List consisting of 153 items. We find that except the equipments mentioned in Sr. Nos. 48, 49, 51, 52, 65, 91, 136, 137, 138, 139, 140, 145, 146, 147, all other equipments can be considered to be parts of a warship/ submarine., for reasons mentioned above. The second addendum to Annexure B is a P-75 Raw Material List consisting of 54 items. We find that except the equipments mentioned in Sr. Nos. 2, 3, 10, 14, 18, 19, 25 to 54, all other equipments, except the items mentioned in Sr. No. 24, can be considered to be parts of a warship/ submarine., for reasons mentioned above. In Sr. No. 24, the details subm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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