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TMI Blog2025 (3) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... hips etc., are therefore classified in other chapter in their respective headings. Whether the product 'Fish finder' can be considered as a part of the vessels falling under Chapter heading 8901, 8902, 8904, 8905, 8906 or 8907? - HELD THAT:- The items that are discussed as essential parts of a ship/vessel are such essential components of a vessel/ship without which the vessel would not be complete and would not exist. These are very integral for the functioning of the ship and can also be separated from the ship for repair/replacement. Refering to the definition of the word 'part', it is found that 'part' is a separate piece of something or a piece that combines with other pieces to form the whole of something. Similarly, the second definition of 'part' also defines 'part' as one of the pieces that together form a machine or some type of equipment. It is a fact that Fish Finders are manufactured for use on fishing vessels, yachts and other vessels. However, the vessels are complete, even without the Fish Finders affixed on them. The case laws cited by the applicant in the case of GS Auto International Vs. CCE [2003 (1) TMI 700 - SUPREME COURT], Hallmark Industries Vs. CCE [2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ology. It works by sending sound waves in water. These waves then strike an object and return to the device and relay important information like shape and size of the fish and so on. Copy of brochure further explaining the function of fish finders is attached with the application. 1.4. On perusal of the Entry 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017 (as amended from time to time) (hereinafter referred to as 'goods rate notification'), applicant is inclined to believe that fish finders form an important part of fishing vessels and hence merits classification under the said rate entry. Applicant's customers have orally informed applicant that other vendors are supplying fish finders at 5% GST rate. Applicant will become non-competitive in the market if it does not classify fish finders under entry no. 252 of Notification No. 1/2017 Central Tax which specifically covers parts of goods of various types of the ships and vessels covered under headings 8901, 8902, 8904, 8905, 8906, 8907. 1.5. To obtain clarity on the applicable GST rate on supply of fish finders, applicant has made present application to seek advance ruling as to whether fis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act it may be permissible to refer to dictionary to find out the meaning of that word as it is understood in the common parlance'. Dictionary meanings of the word 'part' are as under: Dictionary Meaning Black's Law Dictionary An integral portion, something essential belonging to a larger whole, that which together with another or other makes up a whole. Collins Dictionary A part for a machine or vehicle is one of the smaller pieces that is used to make it. Dictionary.com An essential or integral attribute or quality Oxford Dictionary One of the pieces, areas, periods, things, etc. that together with others forms the whole of something From perusal of above dictionary meanings, part is an essential component of the whole (i.e. a ship or a vessel) without which the whole (i.e. such ship or vessel) cannot function. As per of guidelines issued by the Ministry of Agriculture and Farmers Welfare in respect of Centrally Sponsored Scheme (CSS) on Blue Revolution: Integrated Development and Management of Fisheries (No. 27035-19/2015-Fy (IV) Vol. II), fish finder is a mandatory requirement in the safety kit used by fishermen at sea. 2.5. Maharashtra Advance Ruling Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose only i.e. to be fitted on a fishing vessel to assist fishermen in finding fishes in deep sea. They do not have any application other than to be fitted on a fishing vessel. Hence, fish finders merit classification under the rate entry for parts of the ships. Applicant relies on decision in case of Eureka Forbes v. CCE [2001 773 (CEGAT - New Delhi)], wherein, it was held that a hose specifically designed for a particular product and not capable of general use will be classified as part of that machine and not as a 'hose'. Applicant further relies on decision of Hon'ble Supreme Court in case of GS Auto International v. CCE [2003 2113 (SC)], wherein, it was held that if a part solely or primarily suitable for automobiles will be classified as automobile part (under heading 87.08) and not under general heading. The said ruling was followed in CCE v. Basmark Components [2007 (213) ELT 533 (Trib. - Channai)], where it was held that plastic goods designed specifically for automobile with high precision are to be classified as automobile parts. Applicant further relies on decision in case of Hallmark Industries v. CCE [2000 (122) ELT 540 (CEGAT)], Elgi Ultra Appliances v. CCE [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Hon'ble Tribunal in the case of High Energy Batteries (I) Limited vs. Commissioner of Central Excise, Trichy [2002 (142) E.L.T. 266 (Tribunal)] pertaining to parts of an aircraft or a helicopter. 2.11 in light of above submissions, applicant humbly submits that fish finder are an essential art of fishing vessels and hence classifiable under Entry 252 of schedule I to the goods rate notification and taxable 5% 3. CONTENTION - AS PER THE JURISDICTIONAL OFFICER DATED 22.01.2025. "Applicant seeks to advance ruling as to whether fish finders merit classification as 'Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907' falling entry 252 of schedule I to Notification No. 1/2017-Central Tax (Rate) Dt. 28/06/2017 (as amended from time to time) and taxable at 5%?" As per application of applicant, it is observed that he is engaged in the business of sale and distribution of fish finders. Applicant either domestically procures fish finders or imports the same from overseas vendors. This is further supplied to Indian as well as foreign flagships or vessels. A fish finder is a device boatman use to locate fish in the water. It works by sending waves in water. Theses waves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Fishing Vessels * Integral Part: A fishing vessel can function without a Fish Finder, as its primary purpose is to provide a platform for fishing operations. Essential components for manufacturing fishing vessels include hulls, engines, navigation systems, and safety equipment. * Auxiliary Equipment: A Fish Finder enhances the vessel's functionality by helping detect fish underwater, improving fishing efficiency. However, it is not mandatory for the vessel's basic operation or construction. 2. Impact on GST Rate * Fishing Vessel Components: Components or parts that are integral to the structure and operation of fishing vessels are often classified under a lower GST rate. For example, parts directly related to the propulsion system or hull construction may attract a reduced or exempt rate. * Fish Finder Classification: A Fish Finder is an electronic device, and its classification is independent of the vessel it is installed on. As per the GST framework: * It is typically taxed at 18% GST, under the classification of electronic devices and equipment. * The GST rate does not change even if it is purchased for use in fishing vessels, as it is not categorized as an int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ms. Nafeesa Adil Moloobhoy, Director Authorized Representative of the applicant, appeared and made oral and written submissions. Jurisdictional Officer, Mr. Eknath K. Said, Sales Tax Officer of SGST appeared. We heard both the sides. 5. OBSERVATIONS AND FINDINGS: We have perused the documents on record, facts of the case and the submissions made by both, the applicant as well as the department. 5.1 We find that the applicant is engaged in the activity of trading i.e. sale and distribution of 'fish finders. They have mentioned in their application that they either domestically procure or import the fish finders from overseas vendors and supply the same to Indian as well as foreign flag ships of vessels. The applicant has filed this application seeking an order as to whether the fish finders sold by them are parts of goods of Headings 8901, 8902, 8904, 8905, 8906, 8907 and whether the benefit of Entry No. 252 of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 would be available to the said product. It is seen that Entry no. 252 of Schedule 1 of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 is as under: - Entry No. HSN Description GST Rate 252 of Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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. ii) The Black's Law Dictionary, defined parts as an integral portion, something essentially belonging to a larger whole, that which together with another or others makes up a whole. iii) Sarkars Words, Phrases of Excise & Customs-Second Edition, defines 'Part' as 'Part is an element of a sub assembly, not normally useful by itself and not amenable to further dis-assembly for maintenance purpose. In common parlance, parts are used in the manufacture of the final product and without which the final product cannot be conceived of. iv) 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship. In order to form a part of a vessel, the product should be so integral to the main vessel that the vessel cannot be envisaged to function without the said part. A part of a vessel is that piece of equipment/apparatus without which the vessel would be incomplete and would not be able to function. 5.7 We find that the items that are discussed as essential parts of a ship/vessel are such essential components of a vessel/ship without which the vessel would not be complete and would not exist. These are very integral for the functioning of the ship and can also be separated from the ship for repair/replacement. When we refer to the definition of the word 'part' as discussed in detail above, we find that 'part' is a separate piece of something or a piece that combines with other pieces to form the whole of something. Similarly, the second definition of 'part' also defines 'part' as one of the pieces that together form a machine or some type of equipment. The issue has to be examined in the light of the following decisions of the Hon'ble Supreme Court of India. i) In case of Saraswati Sugar Mills Vs Commissioner of Central Excise Civil Appeal No.5295 of 2003 decided on 2nd Aug 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el. the Two Member Bench of the Tribunal referred the appeal before the larger bench on the following questions: (i) Whether the phrase "component parts" occurring in Notification 77/90 would cover "spare parts" for the purpose of granting of benefit thereunder? The larger Bench of the Tribunal having regards to dictionary meaning of 'part', and "Component" observed that in common parlance meaning of the expression "component" is also the same, that is, one of the parts or elements of which anything is made up or into which it may be resolved or a Constituent. The meaning in common parlance has to be looked into since the notification itself does not contain any definition of the expression. iii) In the State of Uttar Pradesh vs M/S. Kores (India) Ltd on 18 October, 1976, Equivalent citations: 1977 AIR 132, 1977 SCR (1) 837. 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 pop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to emphasize that the Fish Finders are mandatory requirement in the safety kit used by the fishermen at sea. We have gone through the said guidelines and we do not find anything to point out that Fish Finders are mandatory part of any safety kit used by fishermen. In fact, the guidelines mentions amongst many other things, fish finders as a part of safety kit and at the same time directs the concerned states to assess specific and essential requirement of items mentioned in the kit for a particular fishing vessel, which clearly indicates that it is not a mandatory part of the fishing vessel and can be provided as an additional equipment. Thus, it further reinforces the fact that fish finders are not part of fishing vessel. They are additional equipment which may be used by fishermen in their occupation. 5.9 We also find that the case laws cited by the applicant are not relevant to the facts of this case. Whether any equipment is a part or otherwise has to be determined on the basis of the facts of each case and the nature of the equipment. It is a fact that Fish Finders are manufactured for use on fishing vessels, yachts and other vessels. However, the vessels are complete, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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