TMI Blog2022 (10) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... ombine Wire Rope to them. Further, as per the use of Combine Wire Rope it is amply clear from the above that it has no use in the fishing vessel but it is used to tie the fishing net. The application has submitted that, it is crystal clear that without Rope, fishing net cannot be used for fishing purpose with the Fishing Vessels . The applicant above submission itself explain that fishing net cannot be used without the Rope, it means that Wire Rope is essential for the fishing net which is used for fishing and without wire rope fishing net will not be of any use. Hence Combined Wire Rope is not the essential/integral part of fishing vessel but it is must for the fishing net - Thus, the applicant goods Combined wire Rope is not a Part of the fishing Vessel. Combined Wire Rope is not used as a part of fishing vessel and the impugned goods does not cover under entry No.252 of Schedule-I of Notification No. 1/2017-CT(Rate) dated 28-06-2017 as amended and is not eligible to GST @ 5%. - GUJ/GAAR/R/2022/45, - - - Dated:- 28-9-2022 - MILIND KAVATKAR AND AMIT KUMAR MISHRA, MEMBER Present for the applicant : R. S. Parmar (Advocate) Present for the Revenue : Shri Nira ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following documents against which it has supplied Combined Wire Rope to one of its customer viz Lodhari Ranchod harmat Veraval, who owns Fishing Vessels. It is submitted that it is evident that the Combined Wire Rope is used as parts in Fishing Vessels owned by them.- i. Invoice No.20GJM 1806/21-22 dated 21.03.2022; ii. Application addressed to the Assistant Director of Fisheries, Gir Somnath, for availing subsidy; iii. Certificate of Registry of a Fishing Boat; iv. Certificate of Licence of a Fishing Boat. 7.1 The applicant further has attached the another sets of the similar documents in respect of the applicant's other Customer viz. Smt Laxmi Jethalal Gohel. Veraval are also enclosed as under:- i. Invoice No.20GJM 1361/21-22 dated 25.12.2021; ii. Application addressed to the Assistant Director of Fisheries, Gir Somnath, for availing subsidy; iii. Certificate of Registry of a Fishing Boat; iv. Certificate of Licence of a Fishing Boat. 7.2 The applicant has submits that the Combined Wire Rope supplied are undisputedly used as parts of Fishing Vessels by the customer who are owning Fishing Vessels. 8. The applicant submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if so, you are already one step ahead Let s go over some of the common parts of a fishing boat mentioned below Bow: The front of a boat Beam: The width of the vessel Stern: The back of a boat Freeboard: The distance from the waterline to the lowest point of the boat s deck Hull: The structural shell the part that sits on the water Draft: The depth of water in which your vessel can navigate Helm: The wheel used to steer Port: The left side of the boat (looking towards the bow) Deck: The flat part of the boat on which you can walk Starboard: The right side of the boat (looking towards the bow) Transom: A flat platform at the stern used to support the engine Forward: at or toward the front of a boat Gunwale: An upper edge of the side of the boat Aft: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 93 attracts 5% GST. 10.4 Though the aforesaid circular is clarification for Marine Engine used for Fishing Vessels, the ratio of the said circular is applicable in the applicant's case as the Wire Rope supplied by the applicant is used as part of Fishing Vessels. 11. The applicant has relied upon the judgment of The Hon'ble Supreme Court of India wherein it have laid down the test to ascertain what is parts in case of Saraswati Sugar-Mills v. Commissioner of Central Excise Civil Appeal No. 5295 of 2003, decided on 2nd August, 2011 [2011 (270) E.L.T. 465 (S.C.)] Hon'ble Supreme Court of India observed:- 11. The meaning of the expression 'components' as defined in the dictionary is accepted and adopted by this Court in the case of Star Paper Mills v. Collector of Central Excise - (1989) 4 SCC 724 = 1989 (43) E.L.T. 178 (S.C.); and the same is quoted with approval in CCE v. Allied Air Conditioning Corporation - 2006 (202) E.L.T. 209 (S.C.). 12. In order to determine whether a particular article is a component part of another article, the correct test would he to look both at the article which is said to be component part and the completed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for Fishing activities in other words without which Fishing Vessels cannot be manufactured and is an integral part of the Fishing Vessels. 13. The applicant has placed reliance on the various Ruling delivered by Authority of Advance Ruling across the country where in it was categorically held that goods of any chapter heading when used as a parts of heading 8901, 8902. 8904. 8905. 8906, 8907 are eligible for 5% Rate of GST in terms of Sr.No.252 ibid. The applicant would like to rely on following Rulings.- (i) In the case of Excide Industries Ltd. the applicant's question was Whether the supply of batteries by the required applicant for the use in warships such as submarines of the Indian Navy falls under Entry 252 of Schedule I to Notification No. 1/2017-Integrated Tax (Rate), dated 28-6-2017 and hence is taxable @ 5% GST? The Authority of Advance Ruling, Maharashtra Answered in affirmative in their Order No. GST-ARA-39/2020-21/B-58, dated 99-2021 in Application No. 39 reported at 2021 (55) G.S.T.L. 195 (A.A.R. - GST-Mah.) Here it is pertinent to note that Batteries does not having exclusive use in the Warships. however when it use as a part of warships ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the Fishing Vessels, however when it use as a part of warships, it was ruled by he Authority that the applicability ofSr.No.252 of the notification ibid comes in to play. (iv) In the case of Techno Tradings and Services (P) Ltd reported at 2019 (24) G.S.T.L. 105 (A.A.R. - GST) following questions were before the Authority for Advance Ruling, Kerala were raised. Applicant is an authorized dealer of Marine Engines and Marine Gear Box used for fishing boats. The question raised by the applicant and Rulings passed by the authority in their order No. KER/34/2019. dated 1-3-2019 as under.- (a) As per the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 Marine Diesel Engine falling under TSH 8408 of Customs Tariff Act. 1975, as adopted to GST, attracts 28% IGST (14% CGST + 14% SGST) as per Serial No. 115 of Schedule IV is correct or not? The Diesel Engines supplied for use in goods falling under Headings 8901. 8902. 8904, 8905, 8906, 8907 will be deemed to be parts of vessels/goods falling under the above headings and thereby taxable @ 5% GST as per SI. No. 252 of Schedule I of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. If it is used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed general purpose parts - Hence, these are covered under Entry No. 252 of Schedule I of Notification No. 1/2018-C.T. (Rate), and taxable @ 5% - Had these parts been used for some other purpose, these would have been taxable @ 18% as per description - Ruled accordingly - Section 9 of Central Goods and Services Tax Act, 2017. [paras 4, 5, 6, 8] In this case authority observed that goods for which ruling was sought for, it is categorically ruled that if the said goods is used for Fishing Vessels it will attract GST @ 5%, however if it is used elsewhere it will attract GST @ of 18% 14. The applicant has submitted that the trajectory of all these ruling suggests that it is the usage of goods of any chapter when used as a parts of Fishing Vessels that determines GST rate stipulated in Sr.No.252 of the Schedule-I of the notification ibid. 15. Thus in terms of aforesaid submission, though the Combined Wire Rope having chapter heading 7312 is a parts of general use having many applications, however, it is also used as a part of Fishing Vessels, the applicant is of the view that in such a case in terms of Sr.No.252 of Schedule-I of Notification 1/2017-CTR, corresponding notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule I - 2.5% S.No. Chapter / Heading / Sub-heading / Tariff item Description of Goods 1 2 3 252. Any chapter Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 From the above it is clear that on supply of parts of goods falling under HSN 8902 shall attract CGST @2.5%. HSN Code 8902 is for Fishing vessels; factory ships and other vessels for processing or preserving fishery products (excluding fishing boats for sport). Further, it is a fact that the Combine Wire Ropes are general uses items, having various uses. The said applicant has submitted various documents in support of their claim and at para 4 of Annexure-B to their application they argued that the fishing net is tied and hooked with Fishing Vessels with the help of Combined Wire Rope and at para 5 of Annexure-B they submitted the Chapter-4 ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is to decide whether the Combined Wire Ropes is a part of fishing vessel or otherwise. 22. We find that the applicant is Authorized wholesale dealer for supply of Combined Wire Rope manufactured by M/s Kadambari Steel Wire Rope Pvt. Ltd and M/s Usha Martin India Limited. We have referred the Manual for Wire Ropes DOC No. CMD-III/l 855/1 MANUAL issued by Bureau of Indian Standards wherein the technical specifications and usage of Wire Ropes have been given and are reproduced for the ready reference as under:- IS 1855: 2003 Stranded Steel Wire Ropes For Winding and man-riding Haulages Mines. IS 1856 : 2005 Steel Wire ropes for Haulage purposes IS 2266: 2002 Steel Wire ropes for General Engineering Purposes IS 2365: 1977 Specification for Steel wire Suspension ropes for lifts, escalators and hoists IS 2581: 2002 Round Strand galvanized steel wire ropes for shipping purposes IS 2762 : 1982 Specification for wire rope slings and sling legs IS 13156 : 1991 Sheave pulley blocks for wire ropes 22.1 We have observed from the above that Wire Rope is used in various fields such as Mines, Haulage, General Engineering, lift escalators and Shipping de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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' . The above judgement of Hon'ble Supreme Court of India has clearly defined what the Parts are. The Apex Court has held that Parts are used in the manufacture of the final product/article and is an integral part of the final product and it is must to complete the whole article without it the final product/article will not be complete. The applicant product Combine Wire Rope is not used in the manufacture of fishing vessel and also it is not an essential or integral part of the fishing vessel without which the fishing vessel will not be complete. Whereas the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g vessels; factory ships and other vessels for processing or preserving fishery products : 8902 00 10 --- Trawlers and other fishing vessels 8902 00 90 --- Other 26.1 The applicant has argued that Combine Wire Rope is a part of fishing vessel and therefore is eligible for the GST rate @ 5 % under entry at Sr. No. 252 of the Not. No. 1/2017-CT (Rate) dated 28-6-2017. We have already discussed in the above paras that Combine Wire Rope is not a part of fishing vessel but it is used to tie the fishing net with the vessel. Therefore, applicant argument does not hold good and Combine Wire Rope is not eligible for the GST Tax @ 5% under entry at Sr. No. 252 of Not. No. 1/2017-CT (Rate) dated 28-6-2017. 27. The applicant has placed reliance on the Circular No. 52/26/2018-GST, dated 9-82018 issued from F. No. 354/255/2018-TRU (Part-2), issued by Central Board of Indirect Taxes Customs, New' Delhi wherein at para 10.1 and 10.2 it is clarified that, 'the supplies of marine engine fishing vessel ( being a part of the fishing vessel ), falling under tariff item 8408 10 93 attr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tteries by the required applicant for the use in warships such as submarines of the Indian Navy falls under Entry 252 of Schedule I to Notification No. 1/2017-Integrated Tax (Rale), dated 28-6-2017 and hence is taxable @5% GST? (ii) The Authority for Advance Ruling, Karnataka in the case of SR Propellers Pvt. Ltd in their order KAR ADRG 78/2019. dated 24-9-2019 reported at 2019 (31) G.S.T.L. 382 (A.A.R. - GST) has ruled that The concessional rate of 5% GST in terms of Entry Number 252 of Schedule I to the Notification No. 01/2017-Central Tax (Rate), dated 28-6-2017 is applicable to the products marine propeller, rudder set, stern tube set. propeller shaft and MS couplings subject to the condition that the said parts form parts of goods falling under 8901, 8902, 8904, 8905, 8906 8907. (iii) The authority for Advance Ruling Kerala in the case of M/s Gurudev Metal Industries in their order Advance Ruling No. KER/50/2019, dated 15-7-21 reported at 2019 (28) G.S.T.L. 191 (A.A.R. - GST) has ruled that Propeller, shaft/SS road, Gun metal bush/bearing, Stuffing box, Brass Tube/SS Tube, Rudder Shafts and Blade, sea Cork/Water Strainer, GM Gate Valve. MS Pipe. Propeller Nut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (2.5% CGST + 2.5% SGST) as per Serial No. 252 of Schedule I of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 or not? The marine diesel engine and gear boxes supplied for use in vessels/goods falling under Headings 8901, 8902, 8904, 8905, 8906, 8907 will be deemed to be parts of such goods and thereby taxable @ 5% GST per Serial No. 252 of Schedule I of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. If it is used for some other purpose, the applicable tax rate would be as per their respective TSH 8408 and 8483 at the rate of 28% GST as per SL Nos. 115 and 135 of the said notification. (v) In the case of DHARSAK. V.P. reported al 2018 (13) G.S.T.L. 426 (A.A.R- GST) where in the Authority for Advance Ruling, Kerala has held that; Parts of Fishing/Floating Vessels - Classification and taxability under GST - Advance Ruling thereon - Various parts such as marine propellers, rudder set, stern tube set, propeller shaft and M.S. Shaft for couplings are supplied by applicant specific for use in said Vessels and cannot be called general purpose parts - Hence, these are covered under Entry No. 252 of Schedule I of Notification No. 1/2018-C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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