In Re: Dinesh Kumar Agrawal
GST
2018 (7) TMI 1691 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA – 2018 (15) G. S. T. L. 404 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA – AAR
Dated:- 4-6-2018
GST-ARA-36/2017-18/B-43
GST
Shri B.V. Borhade and Shri Pankaj Kumar, Member
No. GST-ARA-36/2017-18/B-43
Mumbai, dt. 04/06/2018
PROCEEDINGS
(under section 98 of the Central Goods and Service Tax Act, 2017 and the Maharashtra Goods and Service Tax Act, 2017)
1. The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Dinesh Kumar Agrawal, the applicant, seeking an advance ruling in respect of the following questions :
Question No. 1 Whether Standalone Contract of transportation merits classification under Service code 9965 and whether same is exempt under Entry No. 18 of Notification No. 12/2017-CentraI
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
same is exempt under Entry No. 18 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017?
Question No. 5 Whether supply of services namely 'loading of goods at the premises of the supplier, transportation in own/hired trucks to the project site, unloading and handling of goods at project site and in-transit insurance' under EPC Contract merits classification under Service code 9965 and whether same is exempt under Entry No. 18 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017?
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act/MGST Act would be m
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
er appropriate HSN heading and priced separately and billed to the customer as per supply schedule (itemized billing). In case an item is not supplied, same is not billed to the customer.
Split Contract: Many a times, parties enter two separate contract, one for the supply of goods and materials (Supply Contract) and another for services (Service Contract). Under the Supply Contract, each line item is classified under appropriate HSN heading is priced separately and contractor do itemized billing to the customer. Similarly, for each component of the Service Contract, contractor do itemized billing to the customer. Supply Contract and Service Contract have separate consideration but also contains cross-fall breach clause in the contracts which ensure that the performance of both contracts are treated as a single-point responsibility and non-performance of any portion of any contract is treated as a breach of the other contract also.
Typically, the scope of works under the EPC Contract
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
goods and insurance services from the insurance companies for in-transit insurance of goods.
The case was taken up for preliminary hearing on 03/04/2018 with respect admissibility of the present application. Shri. Dinesh Kumar Agarwal an individual and applicant appeared and argued the matter with respect to facts having bearing on the questions on which Advance Ruling is required as above. On hearing the applicant it was specifically informed to Shri. Dinesh Kumar Agarwal that his queries were very general and not having any specific details in respect to his proposed transaction and that there was not proposed draft contract. Shri. Dinesh Kumar Agarwal agreed to submit copies of draft contract at the earliest. When the matter was called for Final hearing Shri. Dinesh Kumar Agarwal submitted draft contract which is the nature of EPC contract. Applicant was also informed to submit written say within a week else the final plant as proposed in the EPC contract should not be treated as i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ract for Solar Power Plant
B. Nature and scope of works under PGCIL Bid.
Bid document comprises of the following section:
(i) Section – INB (Instruction to bidders) – 20 pages (Page 35 to 54)
(ii) Section – GCC (General Terms and Conditions of Contract) – (page 55 to 90)
(iii) Clarification on GST – 2 pages (page 91-92).
Following are the relevant clauses in the bid documents:
1.8 of GCC – Works – 'Works' shall mean and include the furnishing of equipment/materials at site and if required, supervision of unloading, storage, handling at site, erection, testing & commissioning and putting into satisfactory operation as defined in the Contract.
1.11 of GCC – Contract Price – The term 'Contract Price' shall mean the lump sum price quoted by the Contractor in his bid with additions and/or deletions as may be agreed and incorporated in the Letter of Award, for the entire scope of the works.
24.1 of GCC – Change of Quantity – During the execution of the Contract, the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
prepare and submit to the Engineer for approval, a break-up of the Contract Price. This Contract Price break-up shall be interlinked with the agreed detailed PERT network of the Contractor setting forth his starting and completion dates for the various key phases of Works prepared as per condition in Clause 12.0 of this Section GCC of Volume-I. Any payment under the Contract shall be made only after the Contractor's price break-up is approved by the Engineer. The aggregate sum of the Contractor's price break-up shall be equal to the lump-sum Contract Price. A Price Breakup over valuing those items of supply which will be shipped first will not be accepted.
34.7.3 of GCC – Inland transportation & Insurance – Inland transportation (including port handing) and inland insurance shall be paid to the Contractor on pro-rata to the value of the equipment received at site and on production of the invoices by the Contractor. However, wherever equipment wise inland transportation charge
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
conservation of equipment at the site;
f. pre-assembly, if any, erection, testing and commissioning of all the equipment;
g. reliability tests and performance and guarantee tests on completion of commissioning; and
h. furnishing of spares.
12.2 of INB – Bid Price – The Bidder shall also furnish the price break-down in the appropriate schedules of Bid Form to indicate the following:
i. Ex-works price of the equipment/materials (including tools and tackles etc.)
ii. Charges for inland transportation (including port handling) and insurance for delivery of the equipment/materials up to their final destinations.
iii. Lump-sum charges towards unloading, storage, insurance, erection, testing & commissioning.
iv. Price break-up for spares in line with Clause 23.0 of this Section.
v. Sales Tax and any other levies legally payable on the transactions between the Owner and the Bidder,
vi. Any other charges as per the requirement of Special Conditions of Contract/Technical Specifications
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
heavy blocks prevent hobbling of mounting structures against winds, rains and storms.
Step 3: Module Mounting Structure Installation: In the third step, the execution team mounts the module mounting structures on the civil foundations. The mounting structure is made of galvanized steel which interwove various blocks horizontally and also provide vertical support to the panels.
Step 4: Module Installation: Once the module mounting structures are in place, solar modules (panels) are bolted onto the structures.
Step 5: Cabling: Solar modules are connected in series with DC cables to the inverter, and with AC cables from the inverter to the evacuation point (customer's LT panel).
Step 6: Inverter Connection and Grid Synchronization: Once the installation is ready, the inverter is charged, and begins synchronizing the solar power with the customer's existing electrical grid.
Step 7: Seamless Power Distribution: Lastly, seamless power distribution begins as soon as the electrica
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e contract: Transportation -The Contractor shall at its own risk and expense, be fully responsible for loading, transportation, delivery to the Project Site and unloading of the Equipment. The cost of transit insurance, if any, should be borne by the Contractor.
14.1 of the contract: Contract Price – Payment shall made at the unit rate stated in the Bill of Quantities at net actual quantity of each item delivered at Project Site. Such payment shall constitute full compensation for furnishing all Equipment and labour including testing and all other incidentals necessary to complete the Project. Any quantities which is set out in the Bill of Quantities are estimated quantities and are not to be taken as the actual and correct quantities.
The Bill of Quantities list out name of the equipment, specifications, estimated quantity, price per unit and total price. It also lists out installation cost for each activity and transportation charges payable separately.
Issues for consideration:
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
;land' and 'building' from being taxed. However, this exemption is not extended 'plant and machinery' which was under the current regime at par with 'land' and 'building' and all together constituting 'immovable property'. The specific listing under the Schedules, reflects on a plausible legislative intent to make a distinction between land and building on one hand and plant and machinery on another.
The Central Board of Excise and Customs (CBEC) vide 37B Order 58/1/2002 – CX dated 15 January 2002 has clarified that if the items assembled or erected at site and attached by foundation to earth cannot be dismantled without substantial damage to its components and thus cannot be reassembled, then the items would be considered as immoveable.
In the case of EPC contract for supply of roof top solar power plant, as explained above, solar panels are mounted on steel mounting structures which are mounted on the concrete blocks. Each and every item
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
contract, this ruling will not be applicable.
E. Composite supply
As per Section 2(30) of the Act, “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.
Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.
Applicant understand that where a single price is charged for supply of goods, packing materials, transport and insurance, it would be considered as composite supply and tax will be payable at the rate applicable to principal supply.
However, there is ambiguity on taxability when the Applicant charges separate price for transport and insurance. The customer is at liberty to t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the classification of the goods. However, in as much as transportation charges are concerned, the Applicant submits that:
(i) Tax is payable on transportation of goods only if Goods Transport Agency (GTA) is involve in the transportation;
(ii) In the present case, the Applicant don't issue any consignment note and therefore, he cannot be treated as GTA;
(iii) Service by way of transportation of goods by road except by GTA is exempt
(iv) Thus, as the Applicant is not a GTA, no tax should be payable on the transportation charge received from the customer,
In light of the above, the Applicant prays the authority to issue rulings.
Thus having regards to written submission dt. 08/05/2018 and the draft contract the question raised before this is reframed for consideration as below –
“Whether transportation charges received by the applicant are liable to GST, specially when the applicant is not a goods transport agency (GTA)”.
04. HEARING
The case was taken up for Preliminary hea
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
en up by the authority for any decision or order. It was specifically pointed out to Sh. Dinesh Kumar Agrawal that this authority will be taking up the case for decision only in respect of EPC contracts only, copies of draft/proposed sub-contracts which the applicant has provided. Further it was requested to applicant to give a written up within one week of today, as to why the final plant of proposed in EPC contracts should not be treated as immovable property. Jurisdictional Officer, Sh. R.T. Nikam, Sales Tax Officer appeared and made written submission also which is considered for the fair decision.
05. OBSERVATIONS
We have heard Shri. Dinesh Kumar Agarwal on the issue and have carefully gone through the written submission, and the proposed activity represented by draft agreement for “Engineering, procurement and Solar Power Plant” i.e. roof top photovoltaic (PV). In short, applicants submission is that he is not a goods transport agency (GTA) as he is not issuing any consignment
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ansportation of equipment from vendors site to the project site including transit insurance;
1.1.4 Loading, unloading and storage of the equipment;
1.1.5 Assembly and erection of equipment inc1uding civil works required for such erection;
1.1.6 Test and commissioning of the project
1.1.7 Maintenance
12 Transfer of Title:
12.1 Notwithstanding the manner of issuance of invoices as stipulated in this Agreement, the Developer will obtain the title in goods only upon successful installation and commissioning of the Solar Power Project.
14 Contract Price and Payment:
14.1 Contract Price
Payment shall be made at the unit rate stated in the Bill of Quantities at net actual quantity of each item delivered at Project Site. Such payment shall constitute full compensation for furnishing all Equipment and labour including testing and all other incidentals necessary to complete the Project. Any quantities which is set out in the Bill of Quantities are estimated and are not to be taken as th
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tract as a whole to ascertain the true/correct nature of transaction.
From the co-joint reading of the clauses of the agreement as mentioned above especially clause No.10 it can be safely concluded that the contract is a single contract. As such this agreement for Engineering Procurement and construction of Solar Power plant constitute composite supply in the nature of Works Contract. Thus impugned Supplies constitute Works Contract.
The next issue to be decided is whether this composite supplies constitute Works Contract as defined U/s 2(119) of the GST Act. On this issue applicant submits that the contract is for supply of roof top Solar Plant which involves solar panels which are mounted on steel structures fixed on the roof of building. The steps involved in this regard are already mentioned above in the written submission dated 08/05/2018. He lastly submits that every item can be dismantled and disassembled without any damage and relocated to another site and as such supply of R
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
l data and geotechnical data and other background information provided by the developer.
All the above clauses suggest that the project is the ground mounted Solar Power Plant and not exclusively the Roof Top Mounted Solar Power Plant as claimed by the applicant. Even in a case where it is Roof Top Mounted Solar Power Plant, we find that the intent in operationalising Solar Power Plant, on a Roof Top is to set even it up as an immovable property which involves civil work which would be very clear from plethora of judgments of Hon. Supreme Court' and Hon. High Courts which help in understanding the term immovable property. One such decision is of the T.T.G. Industries Ltd. v, CCE, (2004) 4 SCC 751. In this case Court has observed as below:-
18. The core question that still survives for consideration is whether (he processes undertaken by the appellant at Bhilai for the erection of mudguns and drilling machines resulted in the emergence of goods leviable to excise duty or whether i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tanks were connected with pump house with pipes for pumping petroleum products into the tank and sending them back to the pump house. The question arose in the context of ascertaining the rateable value of the structures under the Bombay Municipal Corporation Act. The High Court held that the tanks are neither structure nor a building nor land under the Act. While allowing the appeal this Court observed: (SCC p. 33, para 32)
“32. The tanks, though, are resting on earth on their own weight without being fixed with nuts and bolts, they have permanently been erected without being shifted from place to place. Permanency is the test. The chattel whether is movable to another place of use in the same position or liable to be dismantled and re-erected at the latter place? If the answer is yes to tile former it must be a movable property and thereby it must be held that it is not attached to the earth. If the answer is yes to the latter it is attached to the earth.”
22. Applying the permane
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nctions. We are not impressed by this reasoning, because it ignores the evidence brought on record as to the nature of processes employed in the erection of the machine, the manner in which it is installed and rendered functional, and other relevant facts which may lead one to conclude that what emerged as a result was not merely a machine hut something which is in the nature of being immovable, and if required to be moved, cannot be moved without first dismantling it, and then re-erecting it at some other place. Some of the other decisions which we shall hereafter notice clarify the position further.
24. In Quality Steel Tubes (P) Ltd. v. CCE [(1995) 2 SCC 372 : (1995) 75 ELT 17] the facts were that a tube mill and welding head were erected and installed by the appellant, a manufacturer of steel pipes and tubes, by purchasing certain items of plant and machinery in market and embedding them to earth and installing them to form a part of the tube mill and purchasing certain components
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
eaning of the Act nor u can be said to be capable of being brought to the market for being bought and sold. Therefore, both the tests, as explained by this Court, were not satisfied in the case of appellant as the tube mill or welding head having been erected and installed in the premises and embedded lo earth ceased to be goods within meaning of Section 3 of the Act.”
25. In Mittal Engg. Works (P) Ltd. v. CCE [(1997) 1 SCC 203 : (1996) 88 ELT 622] this Court was concerned with the exigibility to duly of mono vertical crystallisers which are used in sugar factories to exhaust molasses of sugar. The material on record described the functions and manufacturing process. A mono vertical ctystalliser is fixed on a solid RCC slab having a load-bearing capacity of about 30 tons per square metre. It is assembled at site in different sections and consists of bottom plates, tanks, coils, drive frames, supports, plates, etc. The aforesaid pails were cleared from the premises of the appellants an
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
on at the site of the sugar factory. It is not capable of being sold as it is, without anything more. This Court. therefore, concluded that mono vertical ctystallisers are not “goods” within the meaning of the Act and. Therefore, not exigible to excise duty. In Triveni Engg. & Industries Ltd. v. CCE [(2000) 7 SCC 29 (2000) 120 ELT 273] a question arose regarding excitability of turbo alternator, in the facts of that case, it was held that installation or erection of turbo alternator on a concrete base specially constructed on the land cannot be treated as a common base and, therefore, it follows that installation or erection of turbo alternator on the platform constructed on the land would be immovable property, as such it cannot be an excisable goods falling within the meaning of Heading 85 02. In reaching this conclusion this Court considered the earlier judgments of this Court in Municipal Corpn. of Greater Bombay (1991 Supp (2) SCC 18]. Quality Steel Tubes 1(1995) 2 SCC 372: (1995)
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Paper Mills Ltd. (1998) 1 SCC 400 (1998) 97 ELT 3] must be viewed in the light of the findings recorded by CEGAT therein, that the whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency and also safety. In view of those findings it was not possible to hold that the machinery assembled and erected by the appellant at its factory site was immovable property as something attached to the earth like a building or a tree.
27. Keeping in view the principles laid down in the judgments noticed above, and having regard to the facts of this case, we have no doubt in our mind that the mudguns and the drilling machines erected at site by the appellant on a specially made concrete platform at a level of 25 feet above the ground on a base plate secured to the concrete platform, brought into existence not excisable goods but immovable property which could not be shifted without first dismantling it and then re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
from one place to another, nor is it practicable to shift them frequently. Counsel for the appellant submitted before us that once they are erected and assembled they continue to operate from where they are positioned till such time as they are worn out or discarded. According to him they really become a component of the plant and machinery because without their aid a blast furnace cannot operate. It is not necessary for us to express any opinion as to whether the mudguns and the drilling machines are really a component of the plant and machinery of the steel plant, but we are satisfied that having regard to the manner in which these machines are erected and installed upon concrete structures, they do not answer the description of “goods” within the meaning of the term in the Excise Act.
Thus, it can be seen that the Hon. Supreme Court while holding the machines as immovable property took into account facts such that the machines could not be shifted without first dismantling it and t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
gistered with the Central Excise Department nor is it disputed that the proprietary concern is a small-scale industrial unit that is availing exemption from payment of duty in terms of the relevant exemption notification.
4. M/s Solidmec Equipments Ltd. (hereinafter referred to as “Solidmec”. for short), the fifth unit with which we are concerned in the present appeals is a marketing company engaged in the manufacture of asphalt drum/hot mix plants at the sites provided by the purchasers of such plants. It is common ground that Solidmec advertises its products and undertakes contracts for supplying, erection, commissioning and after-sale services relating thereto. It is also admitted that all the five concerns referred to above are closely held by Shri Hasmukhbhai, his brothers and the members of their families.
5. An inspection of the factories of the respondents by a team of officers from the Central Excise. Preventing Wing, Headquarters, Ahmedabad, led to the issue of a notice dat
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ed that Solidmec was engaged in the manufacturing of asphalt hatch mix and drum mix/hot mix plants by assembling and installing the parts and components manufactured by the manufacturing units of the group. According to the notice the process of assembly of the parts and components at the site provided by the purchasers of such plants was tantamount to manufacture of such plants as a distinct product with a new name, quality, usage and character emerged out of the said process. Resultantly. the end product, namely, asphalt drum/hot mix plants became exigible to Central excise duty, which duty Solidmec had successfully avoided. The notice also proposed to levy penalties upon all the five concerns under appropriate provisions of the Central Excise Act.”
The Hon. Court has very elaborately dealt with the issue and it would be useful to go through the observations –
“22. Section 3 of the Transfer of Property Act, 1882 does not spell out an exhaustive definition of the expression “immovab
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ovable property” things attached to the earth or permanently fastened to anything attached to the earth. The term “attached to the earth”. has not been defined in the General Clauses Act. 1897. Section 3 of the Transfer of Property Act. however, gives the following meaning to the expression attached to the earth
“(a) rooted in the earth, as m the vase of trees and shrubs.
(b) imbedded in the earth, as in the case of walls and buildings;
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.”
25. It is evident from the above that the expression “attached to the earth” has three distinct dimensions, viz. (a) rooted in the earth as in the case of trees and shrubs (b) imbedded in the earth as in the case of walls or buildings or (c) attached lo what is imbedded for the permanent beneficial enjoyment of that to which it is attached. Attachment of the plant in question with the help of nuts and bolts to a foundation not more than 1=
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
r permanent beneficial enjoyment of that to which the plant is attached.
It is nobody's case that the attachment of the plant to the foundation is meant for permanent beneficial enjoyment of either the foundation or the land in which the same is imbedded.
26. In English law the general rule is that what is annexed to the freehold becomes part of the realty under the maxim quidcquid plantatur solo, solo cedit. This maxim, however, has no application in India. Even so, the question whether a chattel is imbedded in the earth so as to become immovable property is decided on the same principles as those which determine what constitutes an annexation to the land in English law. The English law has evolved the twin tests of degree or mode of annexation and the object of annexation
27. In Wake V. Halt (1883) 8 App Cas 195 Lord Blackburn speaking for the Court of Appeal observed:
“The degree and nature of annexation is an important element for consideration: for where a chattel is so an
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ancy The mode of annexation has been similarly given considerable significance by the courts in this country in order to be treated as fixture. Attachment to the earth must be as defined in Section 3 of the Transfer of Property Act for instance a hut is an immovable property, even if it is sold with the option to pull it down. A mortgage of the super structure of a house though expressed to be exclusive of the land beneath, creates an interest in immovable property, for it is permanently attached to the ground on which it is built.
30. The courts in this country have applied the test whether the annexation is with the object of permanent beneficial enjoyment of the land or building Machinery for metal-shaping and electro-plating which was attached by bolls to special concrete bases and could not be easily removed, was not treated to be a part of structure or the soil beneath it. as the attachment was not for more beneficial enjoyment of either the soil or concrete. Attachment in order
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ct.
(iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free.
(iv) The setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed.”
It can be seen that the Hon. Supreme Court has reiterated the same principles as were seen in the earlier decision of T.T.G. Industries Ltd. v. CCE (cited supra). The Hon. Court observed that the expression “attached to the earth” has three distinct dimensions –
(a) rooted in the earth as in the case of trees and shrubs
(b) imbedded in the earth as in the case of walls or buildings or
(c) attached to what is imbedded for the permanent beneficial enjoyment of that to which is attached
It has been categorically observed that the attachment of the plant to the foundation at which it rests does not fall in the third category attache
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ause the machine was attached to earth for a more efficient working and operation the same did not per se become immovable properly.
34. The Court observed: (Sirpur Paper Mills Ltd. case 1(1998) 1 SCC 400], SCC p 402, para 5)
“5. Apart front this finding of fact made by the Tribunal, the point advanced on behalf of the appellant, that whatever is embedded in earth must be treated as immovable property is basically not sound. For example, a factory owner or a householder may purchase a water pump and fix on cement base for operational efficiency and also fur sec win Thai will not make the water pump an item of immovable property. Some of the components of the water pump may even be assembled on site. That too will not make any difference to the principle. The lest is whether the paper-making machine can be sold m the market The Tribunal has found as a fact that it can be sold, in view of that finding, we are unable to uphold the contention of the appellant that the machine must be tre
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
goods that could be brought to market for being bought and sold.
39. We do not see any comparison between the erection and installation of a tube mill which involved a comprehensive process of installing slitting line, tube rolling plant, welding plant, testing equipment and galvanising, etc. referred to in the decision of this Court in Quality Steel Tubes case [(1995) 2 SCC 372: (1995) 75 ELT 17] with the setting up of a hot mix plant as in this case. As observed by this Court in Triveni Engg. A Industries Ltd. case [(2000) 7 SCC 29 (2000) 120 ELT 273]. the facts and circumstances of each case shall have to be examined for determining not only the factum of fastening/attachment to the earth but also the intention behind the same.
40. In Mittal Engg. Works (P) Ltd. case [(1997) 1 SCC 203 : (1996) 88 ELT 622] this Court was examining whether the mono vertical crystallisers erected and attached by a foundation to the earth at the site of the sugar factory could be treated as goods with
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
) 75 ELT 17]. the erection and installation of mono vertical crystallisers was held not dutiable under the Excise Act. This Court observed that: [Mittal Engg. Works (P) Ltd. Case [1997) 1 SCC 203: (1996) 88 ELT 622]. SCC p. 208. para 10]
“10. … The Tribunal ought to have remembered… that mono vertical crystallisers had, apart from assembly, to be erected and attached by foundations to the earth and, therefore, were not, in any event, marketable as they were.”
This decision also, in our opinion, does not lend any support to the case of the assessee in these appeals as we are not dealing with the case of a machine like mono vertical crystallisers which is permanently embedded in the structure of a sugar factory as was the position in Mittal Engg. Works (P) Ltd. case [(1997) 1 SCC 203 : (1996) 88 ELT 622].
The plants with which we are dealing are entirely over ground and are not assimilated in any structure. They are simply fixed to the foundation with the help of nuts and bolts i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
and parcel of the structures in which they were fitted were no longer movable goods. It was in those peculiar circumstances that the installation and erection of machines at the sites were held to be by this Court to be immovable property that ceased to remain movable or marketable as they were at the time of their purchase. Once such a machine is fixed, embedded or assimilated in a permanent structure, the movable character of the machine becomes extinct. The same cannot thereafter be treated as movable so as to be dutiable under the Excise Act Hut cases in which there is no assimilation of the machine with the structure permanently, would stand on a different footing.
44. In the instant case all that has been said by the assessee is that the machine is fixed by nuts and bolts to a foundation not because (he intention was to permanently attach it to the earth but because a foundation was necessary to provide a wobble free operation to the machine. An attachment of this kind without t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =