2025(04)LCX0127(AAR)

SM Marains Advances Gear Boxes India Private Limited

decided on 21-04-2025

Customs Authority for Advance Rulings 

New Custom House, Ballard Estate, Mumbai - 400 001

E-MAIL: cus-advrulings.mum@gov.in

N.B.:

1. A copy of this order made under sub-section (2) of Section 28-1 of the Customs Act, 1962 is granted to the concerned free of charge.

2. Any appeal against this Advance Ruling order shall lie before the High Court of concerned jurisdiction, within 60 days from the date of the communication of such ruling or order.

3. The advance ruling pronounced by the Authority under Section 28 -1 shall remain valid for three years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier.

4. Where the Authority finds that the advance ruling was obtained by the applicant by fraud or misrepresentation of facts, the same shall be declared void ab initio.

5. The advance ruling pronounced by the Authority under Section 28 -1 shall remain valid for three years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier.
 

Advance Ruling

M/s. SM MARAINS ADVANCES GEAR BOXES INDIA PRIVATE LIMITED having IEC No. 3510003012 and hereinafter referred to as ‘the applicant’, in short) filed an application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 16.12.2024 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also). The applicant is seeking advance ruling on the applicability of IGST 5% for Marine engine and its spares & Marine Gear as per notification No.01/ IGST(Rate) dated 28/06/2017, Sr.252 of schedule I for imports through the port of JNCH, Nhava Sheva.

2. Applicant has submitted as follows with the CAAR-1 application:

2.1 M/s SM MARAINS ADVANCES GEAR BOXES INDIA PRIVATE LIMITED having head office at El Block, Door No.1, Appta Market, Ozhuginasery, Nagercoil, Tamilnadu-629001 started in the year 2010 and is incorporated under companies act 1956 on 14-05-2010 and is in trading activity of Buying and selling of Marine engine and its spares and Marine Gear box and, which (Marine engine & Gear) is imported from 1) SHANDONG WEICHAI IMPORT AND EXPORT CORPORATION, CHINA, 2)YIWU JIAQI IMPORT AND EXPORT CO.,LIMITED, CHINA, 3)HANGZHOU SINO UNION IMPORT AND EXPORT CO., LTD, CHINA, 4) YIWU JIAQI IMPORT AND EXPORT CO.,LIMITED, CHINA ,5) MITSUBISHI HEAVY INDUSTRIES ENGINE SYSTEM ASIA PTE.LTD, SINGAPORE and selling these goods to fisher man community and boat builders through various branches situated in and around India 11 states 22 Branches. Beside this they provide Repair and maintenance services of boat engine and Gear and parts of boat.

Nature of Business activities

2.2 The Applicant importing Marine engine and Gear boxes and domestically /Locally purchased Marine engine spares and the same sold to fisher man or boat builders as part of fishing boat & they are providing Service of Boat engine and Gear and other parts of fishing boat to the Fisherman community /Boat Builders (Inter an intrastate supply) Products and service we are dealing as given in the below table

Question of Law or fact on which Advance Ruling required

2.3 The applicant seeking the advance ruling for the following

• Whether the Marine engine (HSN:84081093) and its spares-(HSN:8409), (84- Chapter of customs Tariff act 1975), Can be treated as parts of heading of 8902, 8904, 8905, 8906, and 8907 and applicability of 5% of IGST, while importing of marine engine and its spares, for fishing boat, as per serial No.252 “Any chapter” of Schedule —I of the Notification .No.01/2017, IGST Tax dated 28.06.2017, on the basis of its ultimate use as part of fishing vessel of heading 8902
   

• Whether the Marine Gear Boxes can be classifiable under heading -84834000, of customs Tariff act 1975, and can be treated as parts of heading of 8902, 8904, 8905, 8906, and 8907 and applicability of 5% of IGST, while importing of Marine Gear as per serial No.252 of Schedule —I of the Notification No.01/2017 IGST Tax dated 28.06.2017, on the basis of its ultimate use as part of fishing vessel of heading 8902.
   

• During the time of making supply of fishermen we are receiving the Fisherman ID or Boat RC as end use proof.
   

• We proposed to import marine engine and its parts and Marine Gear through Nhava Sheva Port —Maharashtra for selling the same to fisherman, through Maharashtra branch & Gujarat & Goa branch in order to mitigate/ reduce the Transport cost to the company.

Submissions regarding interpretation of law and Facts for afore said question.

2.4 The applicant is dealing with the product Marine engine and its spares and Marine Gear box. As per notification No.1/2017-IGST (Rate) specifies the General Rate for classification of subject goods under different Scheduled which are as under.

Similarly, the said Notification No.01/2017-IGST Rate dated 28/06/2017, for the classification of above mentioned goods under different schedules, such Schedule entries/Goods, used as parts to applicable to ships, boat, falling under below schedule

2.5 The applicant refers to Sr.No.252 of Schedule 1 of Notification No.01/2017-IGST Rat dated 28th June 2017 which states as follows.

Above notification said that, Goods falls under “any chapter “when it becomes part of 8901, 8902(Fishing boat), 8904,8905,8906, 8907, IGST Rate will be 5%.

2.6 As per customs updated Tariff list & Section Notes for part of goods 8901,8902,8904, 8905, 8906,8907, having no provision under same chapter or any chapter only by the way of advance ruling or notification issued by GST & Customs Authority and came to know that, these are (Marine engine and it spares and Marine Gear) the parts of fishing boat, hence they are seeking customs authority, whether these are parts of fishing boat and can be availed 5% IGST.

2.7 CERTFICATION FROM CONCERNED DEPARTMENT

The applicant submit that, they have enclosed the certificate which is received from Charted accountant and State Tax officer of GST where we fall under their jurisdiction and Certificate from Asst. Director of Fisheries-Nagercoil who verify the KYC documents of customers like Boat Registration Certificate and Fisher man ID Card etc. and certify that they sold marine engine spares to fishing vessels only. Charted Engineer Mr. Shankar Ramalingam issued the certificate No. ER.PSR/CEC@SMM/1124 dated 01.09.2024 to the applicant where in it is certified that Marine engine & its spares and Marine Gear can be using only in Fishing or Transport or Cargo vessels, it will not be suitable for automobile vehicle or industries.

The Content of the certificate is as following:

2.7.1 Marine Diesel Engine and Marine Gear Box, Definition:

Marine diesel engine is type of internal combustion/compression-ignition engine that is designed to power boats and ships, it operated by burning diesel fuel, which creates a high-pressure gas that drives a piston or turbine and its mechanical energy is then used to power the ship’s/boat propeller which propels the vessel forward through the water and that is installed or intended to be installed on a vessel. Propulsion marine compression-ignition engines, which are those that move or are intended through water or direct the movement of a vessel.

Marine Gearbox is transmission system, its mechanical component that helps to transfer power from engine to the wheels by using different gear ratio and to control the power or propulsion in the case of Vessels

2.7.2 Functions of Marine Diesel Engine:

The marine engines are heat engines used for converting heat which is generated by burning fuel, into useful work, i.e developing thermal energy and transforming it into mechanical energy for moving fishing vessels (Boat). The engines used onboard vessels are internal combustion engines (a type), in which, the combustions of fuel takes place inside the engine cylinder and the heat is generated post the combustion process. It has major system of as a) Cooling system by Fuel system. ) Pump driver shaft system, d) Electrical system e) Air intake system, I) Exhaust system g) Intake and Exhaust Manifold system.

2.7.3 Functions of Marine Gear Box

The Marine gearbox of a boat or vessel, also called a marine gearbox, links the engine to its propeller shaft. The gear box converts the high speed rotation of the engine into lower speed suitable for the propeller, it increases the torque transmitted to the propeller allowing ship/boat to move more effectively, especially during starting of when manoeuvring, and gearboxes allow for reversing the direction of the Propller, its enabling the vessel to adapt to varying operational conditions. Its function to reduce the engine’s speed (Rpm) to the correct range of operational speed for the ship or vessel (Boat)

2.7.4 Part Definition:

A separate piece of something or a piece that combines with other pieces to form the whole of something – Cambridge English Dictionary.

A spare or spares, service part, repair part or replacement part is an interchangeable part that is kept is an inventory and used for the repair or replacement of failed unit-Wikipedia

Components/parts/spares are items or parts which are used in manufacture of the final product and without which final product cannot be conceived of and component part of article is an integral part necessary to the constitution of whole article and without it, the article will not be complete

Marine engine spares are part of Fishing vessels, due to if spares of Marine engine damaged, marine engine will not run which in turn Fishing boat will not moving in Sea of water, area, part is vital product of finished goods/ whole, if its damaged, whole function of main product will not be functioning. When Marine engine it means all the parts of Marine engine is fitted with boat/ vessels, they are called as Boat/ship spares. For example valve for cycle tubes is part of cycle not a part of cycle tubes. when it fitted with cycle they are called as cycle parts not a cycle tubes parts Components of components is also component of main machines part of parts is also a part of main product.

2.7.5 Conclusion:

Marine Diesel Engines and its spares and Marine Gearbox’s are the very essential parts of a fishing vessel without marine engine and its spares and Marine Gear sailing of vessel or fishing vessel (boat) is not possible, A Vessel cannot be run without Marine Diesel Engines and its spares and Marine Gearbox because they are essential for the main propulsion or turning the propellers of the fishing vessels and also for providing auxiliary power

2.7.8 Certification

Marine diesel engine and is parts and marine gearbox is a part of vessels or fishing vessels (boat/ships), without which fishing vessels cannot sail in sea water/water and further certify that it cannot be used/suitable functioning in automobile Industries or other sectors.

2.8 END USE PROOF- MARINE ENGINE SPARES SOLD B2C

They are selling Marine engine spares which was purchased other GST Dealers 5%, through branches situated in and around coastal area of 11 States in India to fisher man and Boat construction and repair works., we are receiving the ID Proof for goods sold to them. GST Sales invoice and Boat RC/Fisher Man ID Enclosed for your kind perusal.

2.9 Marine engine and its parts and Marine Gears are parts of fishing boat without which boat will not be sailing sea or water or will not run.

2.10 They submit the extract para of Circular issued by TRU-GST for applicability of Marine engine, Circular No.52/26/2018-GST- F.No.354/255/2018-TRU (Part-2) (Tax Research Unit) & Dated, 9th August, 2018, Para.10.1 i.e Applicability of GST on marine engine: Reference has been received seeking clarification regarding GST rates on Marine Engine. The fishing vessels are classifiable under heading 8902, and attract GST @ 5%, as per S. No. 247 of Schedule I of the notification No.01/2017-Central Tax (rate) dated 28.06.2017. Further, parts of goods of heading 8902, falling under any chapter also attracts GST rate of 5%, vide S. No. 252 of Schedule I of the said notification. The Marine engine for fishing vessel falling under Tariff item 8408 1093 of the Customs Tariff Act, 1975 would attract GST rateig5%:by value of S. No. 252 of Schedule I of the notification No. 01/2017-Central Tax (rate) dated 28.06.2017

2.11 Therefore, it is clarified that the supplies of marine engine for fishing vessel (being a part of the fishing vessel), falling under tariff item 8408 10 93 attracts 5% GST.

2.12 The applicant relied on a number of below cases, namely

(i) In the case of CCE, Nagpur v. Hyundai Unitech Electrical Transmission Ltd., wherein the Hon’ble Supreme Court, while allowing the benefit of Notification No. 6/2002-CE, to doors of tower which were used as part of Windmill (parts of parts of Windmill), held that, “It is not in dispute that as far as windmill doors or tower doors are concerned, it is a safety device which is used as security for high voltage equipment fitted inside the tower, preventing unauthorized access and preventing entries of reptiles, insects, etc., inside the tower. This, according to us, would be sufficient to make it part of the electricity generator. Further, since the tower is held as part of the generator, door thereof has to be necessarily a part of the generator. We, therefore, are of the opinion that there is no case of interference made out by the department, benefit of Notification No.6/2002-CE available”.

(ii) In the case of Collector of Central Excise v. Mahendra Engg. Works, the Hon’ble CESTAT Delhi, allowing the benefit of exemption to Stampings and laminations used in electric motors or in rotors or stators which in turn is used as component parts in manufacture of power driven pumps, considered that parts of parts of power driven pump ought to be regarded as parts of power driven pump only and held that, there is no dispute about the fact that these were used in the electric motors or in rotors or stators and in turn that was used as component part in the manufacture of power driven pumps.

(iii) In the case of Audio Vision Electronics v. Collector of Customs, Madras, the Hon’ble Tribunal Delhi, while allowing import of component of Tape Recorders and TV sets under Open General License, considered that component of component is also a component of the machine.

(iv) In the case of Collector of C.Ex vs. MP (I) Ltd., the Hon’ble Tribunal Delhi, while allowing the exemption, held that, “A part of a cycle tyre is also a part of a bicycle; in our opinion that is the more reasonable view.”.

(v) In the case of Nalanda Pen Mfg. Co. Pvt Ltd. v. Collector of C. Ex. Baroda, separately and independently the Tribunal has held that where the notification exempts the components, parts of the components or sub-parts of that part would also benefit from the notification.

(vi) In the case of Tata Engineering & Locomotive Co. Ltd. v. Collector of Central Excise, Pune, the Hon’ble Tribunal Delhi, held that, “In the Bajaj Auto Limited [1994 (74) E.L.T. 599 (Tribunal)], it was clearly held that since the parts were used in the manufacture of I.C. Engines which were in turn used in the manufacture of motor vehicles – parts are to be considered as parts of motor vehicles.

(vii), In the case of Collector of C. Ex., Bombay v. Perfect Valves & Machine Tools Corpn., the Hon’ble Tribunal Delhi, held that, “as it has been admitted by the Revenue that the nuts were components for the valves for cycle tubes, they could be considered as parts of cycle. In the facts and circumstances of this case, as part of the parts, they should be considered as parts of cycle”

(viii) In the case of Pushpam Forging v. Commissioner of Central Excise, Raigad, the Hon’ ble Tribunal, Mumbai, held that, “The admitted position is M.S. Flanges are part of Wind Mill Tower, which in turn is part of a WOEG [Wind Operational Electric Generator] following Tribunals decision in case of C.C.E. v. Techno Fab Manufacturing Ltd. – 2003 (158) E.L.T. 515 has held tower to be a part of the Wind Mill. Once tower is accepted and found and held to be part of WOEG, it is to be held that part i.e. flange of this part i.e. tower will be part of the whole i.e. Wind Generated Mill producing electricity from unconventional services. Every devices/systems part in this case having been specifically designed for that purpose in mind. That part of part is part of whole is well settled, relying upon [CCE v. Mahendra Engineering Works – 1993 (67) E.L.T. 134 followed in Bensel Industrial Corporation – 2000 (118) E.L.T. 1191. We find the ‘flanges’ to be a part of WOEG”

(ix) In the case of Collector of C. Ex.. Calcutta v. Jay Engineering Works Ltd., the Hon’ble Tribunal Delhi, held that, “Electrical Stampings and Laminations used in the manufacture o electric motors, which in turn are used in the manufacture of power-driven submersible pumps, are eligible for the benefit of Notification No. 64/86-C.E., dated 10-2-1986. Parts of parts have been considered as to be eligible to the benefit of notification.

(x) In the case of Shriram Bearings Ltd. v. Commissioner of C. Ex., Jamshedpur, the Hon’ble Tribunal, Kolkata, held that, “We find that the said exemption has been denied by the adjudicating authority by observing that the Tribunal’s decision in the case of Mahendr. Engineering Works is not applicable inasmuch as the product before the Tribunal in that case was stampings and laminations, whereas in the instant case, the benefit is being sought i respect of parts of Ball Bearings. We find that this differentiation done by the adjudicatin authority is not intelligent, in as much as the ratio of the Mahendra Engineering Work’ case is squarely applicable to the instant case. The said decision only holds to the effect that the parts of parts would also get covered by the Notification No. 64/86.

(xi) In the case of Henaraj Gordhandas Vs. H. H. Dave, Assistant Collector of C. Ex. Customs, the Hon’ble Supreme Court, held that, “it is well established that in a taxing statut there is no room for any intendment but regard must be had to the clear meaning of the words The entire matter is governed wholly by the language of the notification. If the taxpayer i within the plain terms of the exemption, it cannot be denied by benefit or by necessa implication or by necessary implication therefrom, the matter is different

2.13 The applicant further relied on below advance ruling customs & GST

 2.14 The applicant further submitted the technical write up for Marine Gear Box for fish in boat as follows:

Marine Gear boxes which is essential part of fishing boat, main function of the gearbox is to increase or reduce speed of boat, torque output will be the inverse of the speed function of boat, By selecting a combination of different numbers of teeth, an arbitrary and correct spree ratio can be obtained. Using the increase or decrease of the number of gear combinations, th position of the mutual relationship between the rotary axes can be freely changed. It can b used for transmission between various axes such as parallel axes, intersecting axes, an staggered axes. And connected mechanical component that is widely used in wind turbines. It main function is to transmit the power generated by the wind wheel under the action of win to the generator and make it obtain the corresponding speed. Usually, the rotational speed o the wind rotor is very low, which is far from the rotational speed required by the generator t generate electricity.

3. The IGST rates are determined as per notification 01/2017 dateld„.2.S.:.:062{1,1.7.issue under section 5(1) of the IGST Act, 2017. The section 5(1) of IGSTAti24:Iffaitfc5iii;W--,

(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person:

Provided that the integrated tax on goods I [other than the goods as may be notified by the Government on the recommendations of the Council] imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 ( 51 of 1975) on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 (52 of 1962).

Further, Section 7(2) of the IGST Act, 2017 is as follows:

Supply of goods imported into the territory of India. till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

As per Section 281-1 (2) (d)

(2) The question on which the advance ruling is sought shall be in respect of —

(d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act,1975 (51 of 1975) or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff. Act;

The applicant is seeking advance ruling on the applicability of IGST 5% for Marine engine and its spares & Marine Gear as per notification No.01/ IGST(Rate) dated 28/06/2017, Sr.252 of schedule I. Therefore in accordance with the above mentioned provisions of IGST Act ,2017 and Customs Act, 1962 it is clear that the applicant is eligible to seek advance ruling in respect of question arose on applicability of IGST of the subject goods on Imports.

4. In terms of provisions of the Section 28-I (1) of the Customs Act, 1962 read with Sub-Regulation no. (7) of the Regulation no. 8 of the Customs Authority for Advance Rulings Regulations, 2021, on the receipt of the said application, office of the CAAR, Mumbai forwarded copy of the said application/submissions to the concerned Jurisdictional Customs Commissionerate i.e. The Commissioner of Customs, JNCH, Nhava Sheva as stated by the applicant at Sr. No. 13 of the CAAR-I form (Application form for advance rulings) calling upon them to furnish the relevant records with comments, if any, in respect of said application. However, no reply has been received from Jurisdictional Commissionerate till date.

5. A personal hearing in the matter was conducted on 12.02.2025. Shri T Kamraj, Taxation Manager appeared for Personal Hearing. He reiterated the submission filed with the • application. He also submitted that their contention is limited to the product description at Sr. No. 1,2 and 3 only i.e for Marine Engine for fishing boat, Marine gear for fishing boat and marine engine spare for fishing boat that they do not press the fourth item i.e marine engine and gear or other part of engine boat. Nobody appeared from the jurisdictional Commissionerate during the personal hearing.

6. I have considered all the materials facts and submissions placed before me for the subject goods. I have gone through the submissions made by the applicant during the personal hearing as well as the comments received from the jurisdictional Commissioner. I therefore proceed to decide the present application regarding applicability of IGST 5% for Marine engine and its spares & Marine Gear B o x (hereinafter refer as the subject goods) as per notification No.01/ IGST(Rate) dated 28/06/2017, Sr.252 on the basis of the information on record as well as the existing legal framework. I find that the question raised by the applicant falls within the purview of section 28(H)(2)(d) which is related to rate of duty under the Customs Tariff Act, 1975.

6.1 Firstly I proceed to the classification of the subject goods. The process of classification of goods under the Customs Tariff Act, 1975 (hereinafter refer as CTA) involves the Interpretation of the Section Notes, Chapter Notes, Sub-Heading Notes, Supplementary Notes, Headings, Sub-headings and the General Rules for Interpretation (hereinafter referred to as the “GRI”) of the Customs Tariff.

6.2 The GRI is a set of 6 rules that aid in the classification of the goods under Customs Tariff. It is a settled law that the GRI must be applied sequentially to arrive at a proper classification of the imported goods.

 6.3 Classification of goods in the Nomenclature shall be governed by the following principles:

The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions:

6.4 It can be inferred from the above decisions that classification of goods is done in accordance with GRI 1 through the primacy of terms of headings and Section Notes and Chapter notes. When the nature and description of goods match the terms of headings in a chapter and further the goods fall within the scope of Section notes and Chapter Notes of the Customs Tariff, such goods are classifiable as per Rule 1 of GRI

6.5 Thus, it becomes necessary to refer to relevant Section notes, Chapter notes and Heading notes to decide the classification of the subject goods under consideration.

6.6 The Customs Tariff is aligned up to the 6 digit level with the Harmonized System of Nomenclature (HSN) issued by the World Customs Organization (WCO) For uniform interpretation of the HSN, the WCO has published detailed Explanatory Notes to the HSN which have long been recognised as a safe guide to interpret the Schedules to the Customs Tariff.

6.7 In the case of CC vs. Wood Craft Products Ltd., (1995) 77 ELT 23 (S.C.) the Hon’ble Supreme Court of India held that in case of doubt, HSN is a safe guide for ascertaining true meaning of any expression used in the Act, unless there is an express different intention Indicated in the Customs Tariff itself. The same view has been taken by the Hoeble Supreme Court in the case of CC v. Business Forms Ltd., 2002 (142) E.L.T. 18 (S.C)

6.8 Therefore, to further interpret the relevant Headings, Sub-Headings and Section Notes under the First Schedule of the Customs Tariff, reliance can also be placed on the Explanatory Notes to the HSN.

6.9 The applicant intends to import Marine engine and its spares & Marine Gear Box to be used as parts of fishing boats. The applicant submitted the certificate which is received from Charted accountant and State Tax officer of GST where they fall under their jurisdiction and Certificate from Asst. Director of Fisheries-Nagercoil who verify the KYC documents of customers like Boat Registration Certificate and Fisher man ID Card etc. and certify that they sold marine engine spares to fishing vessels only. Charted Engineer Mr. Shankar Ramalingam who certified that Marine engine & its spares and Marine Gear can be using only in Fishing or Transport or Cargo vessels, it will not be suitable for automobile vehicle or industries.

The applicant further submitted that they are selling Marine engine spares which was purchased other GST Dealers 5%, through branches situated in and around coastal area of 11 States in India to fisher man and Boat construction and repair works., we are receiving the ID Proof for goods sold to them. GST Sales invoice and Boat RC/Fisher Man ID Enclosed for your kind perusal.

The fishing boats are specifically classifiable under CTH 8902. However, there is no specific CTH for the parts of fishing boats either in CTH 8902 or in Chapter 89 of the CTA.

6.10 However in section notes of section XVII under heading Parts and Accessories, it is clearly stated as “It should be noted that Chapter 89 makes no provision for parts (other than hulls) or accessories of ships, boats or floating structures. Such parts and accessories, even if identifiable as being for ships, etc., are therefore classified in other Chapters in their respective headings.”

6.11 Further, CTH 8408 of chapter 84 contains heading as Compression- Ignition Internal Combustion Piston Engines (diesel or semi diesel Engines). There is specific subheading 840810 as Marine Propulsion Engines followed by single dash which has specific CTI 84081010 as “Others” followed by triple dash. Further, for the classification of the spares of Marine Engine the CTH 8409 contains description as Parts Suitable for use solely or principally with the Engines of heading 8407 or 8408. Therefore, it is clear that spare parts of Marine Engines are classifiable under CTH 8409 under CTI 84099990 for “Others”.

6.12 The CTH 8483 has description as Transmission shafts (including cam shafts and crank shafts) and cranks; bearing housings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints). The HSN explanatory notes states that the CTH 8483, the goods covered by this heading are mainly includes GEAR. BOXES AND OTHER SPEED CHANGERS, INCLUDING TORQUE CONVERTERS. These provide a range of speeds which can be varied, either by hand or automatically, according to the requirements of the machine. They include, inter alia:

(1) Gear-boxes consisting of assemblies of gears which can be selected in alternative arrangements; the speed of transmission can thus be varied according to the arrangement of gears set.

Thus, the Marine Gear Box is classifiable under CTH 8483 and specifically under CTI 84834000 descripted as Gears and gearing, other than toothed wheels, chain sprockets and other transmission elements presented separately; ball or roller screws; gear boxes and other speed changers, including torque converters

6.13 Therefore, on application of GTR 1 it is concluded that the classification of subject goods are as following:

7. The IGST Notification No. 01/2017 dated 28.06.2017 specifies the General Rate for classification of subject goods under different Schedules which are as under.

Further, Sr.No.252 of Schedule I of Notification No.01/2017-IGST Rate dated 28″ June 2017 which states as follows.

Similarly, in Central Tax Notification No. 01/2017 dated 28.06.2017 specifies the General Rate for classification of subject goods under different Schedules which are as under.

Further, Sr.No.252 of Schedule I of Notification No.01/2017-Central GST (Rate) dated 28t June 2017 which states as follows.

7.1 The applicant intends to import the subject goods viz Marine engine and its spares & Marine Gear Box which are to be used as parts of fishing boats. The applicant submitted the Charted Engineer certificate issued to the him, detailed content of which mentioned in Para 2.7, wherein the Charted Engineer certified that the subject goods i.e Marine diesel engine and is parts and marine gearbox is a part of vessels or fishing vessels (boat/ships), without which fishing vessels cannot sail in sea water/water and further certified that it cannot be used/suitable functioning in automobile Industries or other sectors.

7.1.1 It is mentioned in the Charted Engineer certificate issued to the applicant that Marine engine spares are part of Fishing vessels, due to it spares of Marine engine damaged, marine engine will not run which in turn Fishing boat will not moving in Sea of water, area, part is vital product of finished goods/ whole, if its damaged, whole function of main product will not be functioning. When Marine engine it means all the parts of Marine engine is fitted with boat/ vessels, they are called as Boat/ship spares for example valve for cycle tubes is part of cycle not a part of cycle tubes. when it fitted with cycle they are called as cycle parts not a cycle tubes parts Components of components is also component of main machines part of parts is also a part of main product.

7.2 The GST circular issued by TRU-GST for Applicability of Marine engine, Circular No.52/26/2018-GST- F.No.354/255/2018-TRU (Part-2) (Tax Research Unit) & Dated 09.08.2018 in Para.10.1 states that “Reference has been received seeking clarification regarding GST rates on Marine Engine. The fishing vessels are classifiable under heading 8902 and attract GST @ 5%, as per S. No. 247 of Schedule I of the notification No. 01/2017-Centra Tax (rate) dated 28.06.2017. Further, parts of goods of heading 8902, falling under any chapter also attracts GST rate of 5%, vide S. No. 252 of Schedule I of the said notification. The Marin engine for fishing vessel falling under Tariff item 8408 1093 of the Customs Tariff Act, 197 would attract a GST rate of 5% by virtue of S. No. 252 of Schedule I of the notification No 01/2017-Central Tax (rate) dated 28.06.2017.”

7.3 On the basis of above mentioned clarification issued vide Circular No.52/26/2018 GST- F.No.354/255/2018-TRU (Part-2) (Tax Research Unit) & Dated 09.08.2018, severe AAR of GST have given their ruling accordingly which were also cited by the applicant in the statements of their application. Section 7(2) of the IGST Act, 2017 states that Supply of good. imported into the territory of India, till they cross the customs-frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

7.4 The Authority for Advance ruling under GST, Maharashtra in the case of SHANDON HEAVY INDUSTRY INDIA PVT. LTD. issued vide Order No. GST-ARA-44/2017-18/B-51 Mumbai, dated 15-6-2018 in Application No. 44 held that:

We find that the applicant has stated in their submissions that the marine engine and the gear boxes supplied by them are for end-use in the vessels, trawlers etc, classified under TSH 8901, 8902, 8904, 8905, 8906 and 8907 of the GST Tariff and therefore would attract 5% IGST (2.5% CGST and SGST each). We find that ?prim engines and marine gear boxes which are claimed to be supplied by the applicant to dealers and shipyard manufacturers for use in 2 goods jailing under heading 8901, 8902, 8904, 8905, 8906 and 8907 will be deemed to be Parts of vessels falling under heading 8901, 8902, 8904, 8905, 8906 and 8907, if they are used in goods covered under Tariff Headings 8901, 8902, 8904, 8905, 8906, 8907, and are not diverted and used for other purposes somewhere else.

We are in agreement with the contention of the applicant that the MDEs and Gear Boxes supplied by them for use in goods falling under heading 8901, 8902, 8904, 8905, 8906 and 8907 will be taxable 5% IGST (2.5% CGST and SGST each). However, it is to reiterate that the benefit of reduced CGST and SGST for such A’JDEs and Gear Boxes would only be available and applicable if the engines and gear boxes are used as parts of goods falling under heading 8901, 8902, 8904, 8905, 8906 and 8907 of the GST Tariff.’ The benefit of reduced GST rates would not be available in respect of the Engines and Gear Boxes supplied by the applicant if the same are for use in goods other than goods of heading 8901. 8902, 8904, 8905. 8906 and 8907 of the GST Tariff.

8. On the basis of foregoing facts, observations and discussions,1 come to conclusion that the subject goods in question i.e. Marine engine and its spares & Marine Gear Box are applicable of 5% IGST as per Si. No. 252 of Schedule I of notification No.01/ IGST(Rate) dated 28.06.2017.

9. I rule accordingly.

 

(Prabhat K. Rameshwaram)           
Customs Authority for Advance Rulings, Mumbai

F. No. CAAR/CUS/APPL/172/2025-O/o Commr-CAAR-Mumbai                     Dated: 21-04-2025

This copy is certified to be a true copy of the ruling and is sent to:

1. M/s SM Marains Advances Gear Boxes India Private Limited having head office at El Block, Door No.l, Appta Market, Ozhuginasery, Nagercoil, Tamilnadu-629001 Email- taxation@smmai-ains.co .in.
2. The Commissioner of Customs, Nhava Sheva (NS-V), JNCH, Nliava Sheva, Uran Raigad • 400707. Email: commr-ns5@gov.in
3. The Customs Authority for Advance Rulings, 1st Floor New Custom House, Near IGt Airport, New Delhi -110037.
Email: cus-advrulings.del@gov.in

4. The Principal Chief Commissioner of Customs, Mumbai Customs Zone 1, Ballard Estate,
Mumbai-400001.
Email: ccu-cusmum 1 @nic.in

5. The Commissioner (Legal), CBIC Offices, Legal/CX.8A, Cell, 5th floor, Hudco Vishal i
Building, C-Wing, Bhikaji Cama Place, R. K. Puram, New Deihi-110066.
Email: commr.legal-cbec@nic.in

6. The Member (Customs), Central Boards of Indirect Taxes & Customs, North Block, Ne\ ?
Delhi-110001.
Email: membercus.cbic@gov.in

7. The Webmaster, Central Boards of Indirect Taxes & Customs.
Email: webmaster.cbec@icegate.gov.in, webmaster.cbic@icegate.govern
8. Guard file.


 

(Vivek Dwivedi)       
Dy. Commissioner & Secretary
Customs Authority for Advance Rulings,
Mumbai