TMI Blog2019 (3) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... tress Safety System). GMDSS is an international system which uses terrestrial and satellite technology and ship board radio system to ensure rapid alerting of shore based rescue and communication operations in the event of an emergency - SART, NAVTEX are essential components of the GMDSS and as per SOLAS Convention of IMO, ships are required to carry the above equipment. SART -A search and rescue transponder is a self-contained, waterproof transponder intended for emergency use at sea. These devices may be either a radar-SART, or a GPS-based AIS-SART. The radar-SART is used to locate a survival craft or distressed vessel by creating a series of dots on a rescuing ship s radar display. It is used to ease the search of a ship in distress. The National Maritime Search and Rescue Manual (for the Indian Coast Guard) makes SART mandatory for all ships. It is also an essential part of the GMDSS - EPIRB on SART are a part of the positioning and localization system and NAVTEX is a part of maritime and safety information. The Two Way RT does not find the place in the GMDSS. It is used for internal communication for the staff of the ship. A walkie-talkie has general application and ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of goods of headings 8901, 8902, 8904, 8905, 8906, 8907.Charging tax at higher rate of 18% was making appellant noncompetitive in the market. D. Based on the information from customers and market trend, appellant also felt that GST rate should be 5% on the goods supplied by them as same are essential part of ship which makes the ship seaworthy as it is legally obligatory for ships to have fitment/installation of all such spares and equipment to qualify as seaworthy. Such parts/equipment should be classified under the tariff heading of Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907. Heading 8901 is for cruise ships, excursion boats, ferry boats, cargo ships, barges and similar vessels for transport of persons or goods. Heading 8902 applies to fishing vessels, factory ships, other vessels, etc. Heading 8904 is for tugs and pusher crafts. Heading 8905 covers Light vessels, fire floats, dredgers and other vessels. Heading 8906 and 8907 is for other vessels and floating structures. E. In view of the above, the appellant filed an application before the Advance Ruling Authority (Maharashtra) seeking a ruling on the question as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIS Automatic Identification System Used for identifying other ships details J SAT-C/FBB Satellite Communication / Fleet broad Band Used for communication between ship and shore L V NAVTEX 2 way RT Navigational telex and Walkie Talkie Used for receiving navigational weather and other warnings throughout globe and internal communication. N VDR Voyage Data Recorder Used for recording and analyzing data of own ship like aircraft black box p FCV Fish Finder Used for higher level of accuracy and clear fish shoal images Q SONAR Sound Navigation and Ranging Used for searching under water fishing T SART Search and Rescue Transponder Used in emergency to assist the coastguard in search and rescue operations if the ship is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analyzing data of own ship like aircraft black box p FCV Fish Finder Used for higher level of accuracy and clear fish shoal images Q SONAR Sound Navigation and Ranging Used for searching under water fishing T SART Search and Rescue Transponder Used in emergency to assist the coastguard in search and rescue operations if the ship is in distress ** ARA concluded that said part is an essential part of ship in their observation paragraph no. 05 of their order. However, while pronouncing final ruling, item listed in Sr. No. J has been excluded from final list of essential part of ship which are entitled to concessional rate of tax at 5%. 1. Appellant appreciates and agree to the principle laid down by the Advance Ruling Authority that parts of the ship without which the ship would not be performing its essential function is a part of the ship classifiable under entry no. 252 of Notification no. 1/2017-Central tax (rate) dated 28.06.2017 and is entitled to concessiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponents to ensure compliance with GMDSS which is an internationally agreed upon system. All the parts / components collectively ensure compliance of GMDSS.GMDSS cannot be complied with if any of the above parts or components are missing. 6. The Physical fitment of both SART, NAVTEX and 2 way RT is done when the ship is being built and it requires hot work etc; which makes the SART, NAVTEX and 2 way RT physically, a part of a Ship. In view of above we humbly submit that SART, NAVTEX and 2 way RT [item no. (e) (f) and (g)] should be treated at par with item (a) to (d) [which ARA has held to be essential part of ship liable to tax at 5%) for classification and applicable tax rate. 7. The Automatic Identification System (AIS) is an Automatic Tacking System that uses transponders on ships and is used by vessel traffic services (VTS). AIS information supplements marine radar, which continues to be the primary method of collision avoidance for water transport. AIS is intended to assist a vessel s watch standing officers and allow maritime authorities to track and monitor vessel movements. AIS integrates a standardized VHF transceiver with a positioning system such as a GPS rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hot works for installation during the construction stage of the ship itself as the sensors are part of the Hull. The display unit of the Fish Finder is fixed on the bridge of the ship to enable the Captain to locate the fish in the sea. The appellant have also referred to photographs of FCV and SONAR which are enclosed as part of the submissions. 10. NAVTEX, SART, AIS and VDR are of critical nature and are mandated by IMO (International Maritime Organization) to establish the sea worthiness of a ship. Ship cannot function as a ship unless it is sea worthy. Without above referred parts, ship cannot be certified as sea worthy. 11. In the case of SONAR and FISH FINDER, the very purpose of Fishing Vessel, is to locate fish and therefore in the case of fishing vessels, these items are extremely necessary and physically installed in the hull of the ship. This can only be done during the construction stage of a ship or when the vessel is in drydock. This, itself, validates that FISH FINDER and SONAR are intrinsic part of fishing vessel. 12. Hence, all these equipment/parts/spares are essential part of the ship without which ship would not be performing its essential functi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly relies on the decision of the Honorable Supreme Court in its own case i.e. Commissioner of Customs, Mumbai Appellant(s) VERSUS M/s. A.S. Moloobhoy sons Ors. Respondent(s) WITH CIVIL APPEAL NOS. 3115-3117 OF 2015 = 2015 (5) TMI 803 - SUPREME COURT OF INDIA , where the Honorable Court declined to interfere with the order passed by the Tribunal, wherein it was held that these imports of equipment and spares should be treated as one for the purpose of ship repair. 20. Shri Ravi Krishnamurthy, Chartered Engineer, vide his certificate dated 10.06.2018, has certified that Navigation Equipment and their associated spares, Communication Equipment and their associated spares, lifesaving/firefighting equipment and their associated spares, etc., detailed therein, are integral part of a ship without which ship cannot sail and would not be considered seaworthy as per the IMO/SOLAS/guidelines. It is further certified that every ship being built at any shipyard must include these equipment and its associated spares to construct a sea worthy vessel. This itself proves that during the construction of a ship these items are indivisibly part of ship and therefore incorporated fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 1/2017 as they are not essential parts of the ship and are in the nature of additional equipment. F Automatic Identification System L Navtex N Voyage Data Recorder P Fish Finder Q SONAR T SART Search and Rescue Transponder N Two way RT walkie-Talkie In the order passed by the AAR, it was held that certain parts as essential parts of the ship and this includes Radar Ship Security Alert System, EPIRB amongst others. 28. It is seen from the grounds of appeal that NAVTEX, SART and Two Way RT Walkie Talkie, AIS and Voyage Data Recorder along with other equipment constitute the list of equipment comprising GMDSS (Global Maritime Distress Safety System). GMDSS is an international system which uses terrestrial and satellite technology and ship board radio system to ensure rapid alerting of shore based rescue and communication operations in the event of an emergency. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the search of a ship in distress. NAVTEX is an international service for receipt and broadcast of weather and other warnings. It can broadcast different classes of mishaps like navigation warnings, meteorological warnings, Ice reports, search and rescue warnings, weather forecast, navigation messages etc. ln an advisory of the Directorate of Lighthouses and Lightships (DGLL) under the Ministry of Shipping and under the title of Establishment of NAVTEX Chain , the following is given: NAVTEX (Navigational text messages) is a system to deliver local weather reports and navigational warnings to ships operating in coastal areas. It is an international automated direct printing service for promulgation of navigational and meteorological warnings and urgent information to ships. It has been developed to provide low cost, simple and automated means of receiving maritime safety information on board ships at sea in coastal waters. The NAVTEX system automatically broadcasts localised Maritime Safety Information (MSI) using Radio Telex (also known as Narrow Band Direct Printing, or NBDP). The information transmitted may be relevant to all sizes and types of vessel and the selective m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functional requirement of the AIS and abide by the same. Any violations in this regard may attract appropriate punitive action, including non-issuance of appropriate statutory inspection/certificate. 35. We agree with the contention of the appellant that if EPIRB which is a critical element of GMDSS is classified as part of the ship under Sr.No.252 then there is no reason to exclude SART, NAVTEX and AIS from it. GMDSS includes the following systems:- a) Communication equipment. b) Positioning and localization system. c) Maritime safety information. EPIRB on SART are a part of the positioning and localization system and NAVTEX is a part of maritime and safety information. 36. Voyage Data Recorder , or VDR, is a data recording system designed for all vessels required to in order to collect data from various sensors on board the vessel. It then digitizes, compresses and stores this information in an externally mounted protective storage unit. Like the black boxes carried on aircraft, VDRs enable accident investigators to review procedures and instructions in the moments before an incident and help to identify the cause of any accident. However, they are n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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