Concessional duty benefit under Project Import Regulations under CTH 9801

In re Pune IT City Metro Rail Limited (CAAR Mumbai)

The applicant has sought an Advance Ruling on whether the applicant and Siemens Limited can register the said ‘Project’ and avail the concessional duty benefit under Project Import Regulations under the CTH 9801 with recommendation / sponsoring letter issued by the PMRDA.

In this regard I find that the project of the applicant is the Pune Metro Line 3 (Pune — Hingewadi) and is carried out by Pune IT City Metro Rail under the aegis of PMRDA.

As per the official website of the PMRDA viz. http://www.pmrda.gov.in, the area including the cities of Pune and Pimpri-Chinchwad, the tehsils of Maval, Mulshi, Haveli and some parts of the talukas of Bhor, Daund, Shirur, Khed, Purandar and Velhe are covered under the Pune Metropolitan Region, which is one of the largest Metropolitan Regions in the country. The Government of Maharashtra established PMRDA to carefully plan the development of Pune, the Industrial City of Pimpri-Chinchwad and the surrounding area of 7,357 sq.km. On the 31st of March 2015 the Urban Development department of Maharashtra established PMRDA as an independent Autonomous body. Some major objectives of PMRDA are long term planning, enforcing the development plans, providing for roads, water supply, sanitation, Metro Railways, necessary infrastructure and also stimulating economic development in the region. PMRDA is a body with constitutional rights responsible for the planned development of the metropolitan region.

Therefore, the project viz. the Pune Metro Line 3 (Pune — Hingewadi) carried out under the aegis of PMRDA is definitely Metro Rail Project for urban public transport. The sponsoring authority in this case would be the concerned state government in terms of 3F of the Table annexed to the Project Import Regulations and not PMRDA.

Having said that during the course of hearing the applicant submitted that they have now received a Recommendation/ Sponsoring letter for import of goods under concessional duty benefit as applicable under CTH 98.01 of the Customs Tariff Act dated 15.09.2022 from the Additional Chief Secretary, Urban Development Department, Government of Maharashtra for the subject project. They also submitted a copy of the said letter during the hearing.

I find that the applicant has received the Recommendation / Sponsoring letter from the Maharashtra State Government which is the sponsoring authority for the subject project in terms of 3F of the Table annexed to the Project Import Regulations.

Therefore, the applicant can now register the said Project and avail the concessional duty benefit under Project Import Regulations under the CTH 9801 with the Recommendation/ Sponsoring letter for import of goods under concessional duty benefit as applicable under CTH 98.01 of the Customs Tariff Act dated 15.09.2022 from the Additional Chief Secretary, Urban Development Department, Government of Maharashtra for the subject project.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY FOR  ADVANCE RULING, MUMBAI

Pune IT City Metro Rail Limited (hereinafter referred as the applicant), having its address at 9th Floor,”Vikram Monarch”, CTS No 1115/A, Ganeshkind Road, Shivajinagar, Pune, Maharashtra, India -411016 have sought an Advance Ruling on a Project Import proposed to be carried out by them.

2. The applicant made the following submissions:

2.1. The Project authority in the said case is Pune Metropolitan Rail Development Authority (PMRDA).

2.2. PMRDA is an independent Autonomous body of Government of Maharashtra. 2.3. PMRDA is setting up a dedicated Pune Metro Line 3 (Pune — Hinjewadi).

2.4. The applicant, i.e. Pune IT City Metro Rail Corporation is a special purpose vehicle formed among PMRDA, Siemens GMBH and Tata Projects to design, build, finance, operate and transfer the operations to the beneficiary.

2.5.  Siemens Limited is one of the contractual suppliers to the applicant for supplies of imported goods towards the Pune Metro Line 3 (Pune — Hingewadi) Metro Rail Project. Hence applicant has authorised Siemens Ltd to represent this case before the Advance Ruling Authority.

2.6. The applicant has received a Recommendation/ Sponsoring letter from the Project Authority viz. PMRDA for the import of goods as per “Annexure 1” under the concessional rate of duty benefit.

2.7. The Sponsorship letter has been issued by “The Metropolitan Commissioner” of PMRDA.

2.8. In terms of Regulation 3 — Definitions, of Project Import regulations 1986 point (b) defines “Sponsoring Authority” as an authority specified in the table annexed of these regulations. The list of Sponsoring Authorities for the Metro Rail or Monorail projects is as follows:-

2.9. Pune Metropolitan Regional Development Authority is not listed as a separate sponsoring agency under 3FF of the said regulation. Therefore, the applicant is of the opinion that this project does not fall under 3FF and squarely falls under the scope of serial 3F of the regulations, whereby the sponsoring authority for the said project becomes the concerned Sate Government.

2.10. The applicant has sought an Advance Ruling on whether the applicant and Siemens Limited can register the said “Project” and avail the concessional duty benefit under Project Import Regulations under the CTH 9801 with recommendation / sponsoring letter issued by the PMRDA.

3. A personal hearing was held on 13.10.2022 and represented by Shri Vivek Kharwarkar, Chief Engineer, PMRDA, Shri Kailash Gade and Shri Edwin Jesudas from Siemens Ltd. Above mentioned representatives submitted a copy of the sponsorship letter issued by the Additional Chief Secretary, Urban Development department, Government of Maharashtra dated 15.09.2022. On the issue of registration of the project with concerned project import cell of the jurisdictional customs house, Shri Edwin presented online a copy of project registration dated 26.09.2022 with the New Customs House, Mumbai. With this, the representatives requested to issue a ruling as requested in their CAAR-1 application.

3.1. The applicant made further submissions with respect to their relationship with the Seimens GMBH vide their mail dated 01.11.2022.

4. I have gone through the application and the submissions made by the applicant. No comments were received from the Jurisdictional Commissioner.

4.1. The Customs Tariff Heading 9801 deals with all the items of Machinery including Prime Movers, Instruments, Apparatus and Appliances, Control Gear and Transmission Equipment, Auxiliary Equipment (including those required for research and development purposes, testing and quality control), as well as all components (whether finished or not) or raw materials for the manufacture of the aforesaid items and their components, required for the initial setting up of a unit, or the substantial expansion of an existing unit, of a specified.

(1) Industrial Plant

(2) Irrigation Project

(3) Power Project

(4) Mining Project

(5) Project for the exploration for oil or the other minerals and

(6) Such other projects as the Central Government may, having regard to the economic development of the Country notify in the Official Gazette in this behalf, and spare parts, other raw materials (including Semi-Finished material) or consumable stores not exceeding 10% of the value of the goods specified above provided that such spare parts, raw materials or consumable stores are essential for the maintenance of the plant or the project mentioned in (1) to (6) above.

4.2. The Central Government having regard to the economic development of the country has notified Metro Rail Projects under the Customs heading 98.01. The project being carried out by the applicant is the Pune Metro Line 3 (Pune — Hingewadi) Metro Rail Project. The applicant is a special purpose vehicle formed between PMRDA, Siemens GMBH and Tata Projects to design, build, finance, operate and transfer the operations of the Pune Metro Line 3 (Pune — Hingewadi) Metro Rail Project to the beneficiary.

4.3. As per the chapter note 2 of the Chapter 98, Heading 9801 is to be taken to apply to all goods which are imported in accordance with the regulations made under section 157 of the Customs Act, 1962 (52 of 1962) and expressions used in this heading shall have the meaning assigned to them in the said regulations. The Project Imports Regulations, 1986 have been issued for the assessment and clearance of the goods falling under heading no. 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Therefore, import of goods under the scheme of Project Import are administered by the Project Import Regulations, 1986.

4.4. In terms of Regulation 3(b) of the Project Import Regulations, a “Sponsoring authority” means an authority specified in the Table annexed to these regulations.

4.5. The list of Sponsoring Authorities for the Metro Rail as per the table annexed to the said Regulations is as follows: –

4.6. The applicant has sought an Advance Ruling on whether the applicant and Siemens Limited can register the said “Project” and avail the concessional duty benefit under Project Import Regulations under the CTH 9801 with recommendation / sponsoring letter issued by the PMRDA.

4.7. In this regard 1 find that the project of the applicant is the Pune Metro Line 3 (Pune — Hingewadi) and is carried out by Pune IT City Metro Rail under the aegis of PMRDA.

4.8. As per the official website of the PMRDA viz. http://www.pmrda.gov.in, the area including the cities of Pune and Pimpri-Chinchwad, the tehsils of Maval, Mulshi, Haveli and some parts of the talukas of Bhor, Daund, Shirur, Khed, Purandar and Velhe are covered under the Pune Metropolitan Region, which is one of the largest Metropolitan Regions in the country. The Government of Maharashtra established PMRDA to carefully plan the development of Pune, the Industrial City of Pimpri-Chinchwad and the surrounding area of 7,357 sq.km. On the 31st of March 2015 the Urban Development department of Maharashtra established PMRDA as an independent Autonomous body. Some major objectives of PMRDA are long term planning, enforcing the development plans, providing for roads, water supply, sanitation, Metro Railways, necessary infrastructure and also stimulating economic development in the region. PMRDA is a body with constitutional rights responsible for the planned development of the metropolitan region.

4.9. Therefore, the project viz. the Pune Metro Line 3 (Pune — Flingewadi) carried out under the aegis of PMRDA is definitely Metro Rail Project for urban public transport. The sponsoring authority in this case would be the concerned state government in terms of 3F of the Table annexed to the Project Import Regulations and not PMRDA.

4.10. Having said that during the course of hearing the applicant submitted that they have now received a Recommendation/ Sponsoring letter for import of goods under concessional duty benefit as applicable under CTH 98.01 of the Customs Tariff Act dated 15.09.2022 from the Additional Chief Secretary, Urban Development Department, Government of Maharashtra for the subject project. They also submitted a copy of the said letter during the hearing.

4.11. I find that the applicant has received the Recommendation / Sponsoring letter from the Maharashtra State Government which is the sponsoring authority for the subject project in terms of 3F of the Table annexed to the Project Import Regulations.

4.12. Therefore, the applicant can now register the said Project and avail the concessional duty benefit under Project Import Regulations under the CTH 9801 with the Recommendation/ Sponsoring letter for import of goods under concessional duty benefit as applicable under CTH 98.01 of the Customs Tariff Act dated 15.09.2022 from the Additional Chief Secretary, Urban Development Department, Government of Maharashtra for the subject project.