Page 183 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] IN RE : NEW SPACE INDIA LTD. 285
tial parts of the seat. Chapter Heading 9401 covers only the parts of the seats and not
accessories to the seat. A “part” is an essential component of the whole without which the
whole cannot function”.
In the aforesaid judgment, the Apex Court has held that a Part is an es-
sential component of the whole without which the whole cannot function and in
the present case, the transponder is a part of the Communication Satellite with-
out which the Communication Satellite cannot function.
Eureka Forbes Limited v. Commissioner of Central Excise, Meerut - 2001 (130)
E.L.T. 146 (Tri. - Del.) wherein it was held in Para 8 as under :
“According to note 2(b) parts which are suitable for use solely or principal-
ly with particular machines or apparatus are classified in the same heading
as those machines or apparatus. This has been confirmed by the Appellate
Tribunal and Courts in many cases, including the decision in Sealol Industan
Ltd., supra, and Plastic Craft Industries, supra, relied upon by the Ld. Advo-
cate for the Appellants. The Board also clarified vide letter F. No.
145/12/87-CX4, dated 18-3-88 that Ice Trays, freezer doors, etc. would be
classified under Heading 84.18 as parts of refrigerator. The Board, however,
classified butter box under Chapter 39 as it was not solely designed for use
with refrigerator. Accordingly, we hold that applying Rule 2(b) to Section
XVI, hoses in question are appropriately classifiable along with vacuum
cleaner under Heading No. 85. 09 of the Tariff”.
In the Applicant’s case, the transponder is used solely and principally with the
Communication Satellite and hence is a part of the Satellite. With regard to the
issue as to why a Transponder cannot be categorized as an equipment as it is also
made of few more parts, the Applicant submits that if a part is made of a differ-
ent part, it does not mean that the resultant part will not be a part of a particular
product/equipment (in this case Satellite). In the context of Part of Part being
considered as part of Equipment, there are several judgments which goes to
show case that, even if the primary part of an equipment is made of other parts,
still the character of Primary Part of equipment doesn’t get lost. The Applicant
places reliance on the following judicial pronouncements where there are deci-
sions considering part of part being considered as part of equipment. There is no
view that since part is made of other part, the main part will become an equip-
ment on its own. In fact, even the so-called equipment if it is intrinsic to a specific
primary equipment, will be treated as part of the equipment :
(a) Collector of Central Excise v. MP (I) Ltd. - 1990 (46) E.L.T. 68 (Tri.)
(b) Collector v. MP (I) Ltd. - 1997 (95) E.L.T. A142 (S.C.)
(c) Motor Industries Company Ltd. v. Collector of Central Excise, Auranga-
bad - 1995 (75) E.L.T. 65 (Tri.)
(d) Collector of Central Excise, Aurangabad v. Motor Industries Company
Ltd. - 2003 (152) E.L.T. 36 (S.C.)
With regard to the question as to whether Space Segment Capacity includes
Spectrum, as mentioned in Article 2 of the Agreement between NSIL and DOS, the
scope of the agreement is leasing of bandwidth capacity on a satellite (part of
INSAT/GSAT system) to the user and this space segment capacity is known as
transponder capacity. Hence the scope of the agreement covers only Leasing of
Satellite Transponder capacity and not Spectrum.
Considering the above, the Applicant states that it is clear that Satellite
transponder, which is designed for specific use in satellite is to be classified as
Part of Satellite and classified under HSN 8803.
GST LAW TIMES  14th May 2020  183