TaxTMI 
TaxTMI 
2018 (7) TMI 1691
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....and whether same is exempt under Entry No. 18 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017? Question No. 3 Whether composite supply of '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' 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? Question No. 4 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 Service Contract (under Split 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? 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' unde....
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....e 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 and also the Service Contract, inter alia, includes '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' ("SOW"), Standalone Contract: Parties may also have a standalone transportation contract with or without loading and in-transit insurance. In this case, if the contractor is also executing other contracts, then there may be cross-fall breach clause' in the contracts which ensure that the performance of all contracts are treated as a single-point responsibility and non-performance of any portion of any contract is treated as a breach of the remaining contracts also. The Applicant is not a Goods Transport Agent (GTA) as defined under Entry No. 9(iii) of the Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017 as it does not issue any consignment note to the c....
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.... 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 Owner reserves the right to increase or decrease the quantities of items under the Contract but without any change in unit price or other terms and conditions. Such variations unless otherwise specified in the accompanying Special Conditions of Contract and/or Technical Specifications, shall not be subjected to any limitations for the individual items but the total variations in all such items under the Contract shall be limited to a percentage of the Contract price as specified in the ....
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....oval; d. packing and transportation from the manufacturer's works to the site; e. receipt, storage, preservation and 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 C. Nature and scope of works under EPC Contract f....
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....ert]. 2.1 of the contract: The Contractor shall supply the following in relation to the Project: a. Basic and detailed engineering diagram, designs, etc. of the project and equipment; b. Procurement of equipment and inspection thereof at the vendor's site; c. Transportation of equipment from vendors site to the project site including transit insurance; d. Loading, unloading and storage of the equipment; e. Assembly and erection of equipment including civil works required for such erection; f. Test and commissioning of the project g. Maintenance 10.1 of the 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. A....
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....every item can be dismantled and disassembled without any damage and relocated to another site. In case of supply to PGCIL, the supply may result in immovable property or may not result in immovable property depending on the scope of works. Scope of supply in case of sub-station may involve erection of buildings, boundary wall and other civil works or it may be purely supply of transformers and switchgears. Erection and commissioning of transformers does not result in immovable property as transformers can be dismounted without any damage. Similarly, switchgears can be dismantled and disassembled without any damage and relocated to another site. Thus, in case of the first, supply will be characterized as 'works contract' but in later case, it shall be supply of transformers and switchgears. The Applicant wishes to clarify that it is not seeking any ruling on the nature of supply. It is on the assumption that supply will not be works contract and if such supply is characterized as works 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 consis....
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....ustomer, 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 hearing on dt. 03.04.2018 with respect to admission or rejection of present application when Sh. Dinesh Kumar Agrawal himself appeared. It was specifically informed to Sh. Dinesh Kumar Agrawal that his queries were very general and not having specific details in respect as his transactions and there was no proposed or draft contract. Sh. Dinesh Kumar Agrawal agreed to submit copies of draft contract at the earliest. Jurisdictional Officer, Sh. R. T. Nikam, Sales Tax Officer appeared and stated that they would be making written submission in due course. The application was admitted and called for final hearing on 24.04.2018, Sh. Dinesh Kumar Agrawal himself appeared. As pointed out in the preliminary hearing, Sh. Dinesh Kumar Agrawal submit....
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....age 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 the actual and correct quantities. 30.10 Entire Agreement This Agreement, including and together with any related annexures, sets forth the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes and cancels all minutes of meeting, term sheet, memoran....
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....onstruction of the boundary wall, drains etc. at the Project Site, within - days from the Notice to Proceed; and 4.1.9 access to the preliminary designs developed by the other contractors engaged by the Developer. 6. Contractors Responsibilities:- 6.6 The contractor has provided the contract Price relying on the soil 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 a....
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....e property. It cannot be moved from the place where it is erected as it is, and if it becomes necessary to move it, it has first to be dismantled and then re-erected at another place. This factual position was also accepted by the adjudicating authority. 23. The technical member, however, held that the aforesaid decision was of no help lo the appellant inasmuch as a leading international manufacturing firm had offered such machines for export to different parts of the world lie further observed that though on account of their size and weight, it may be necessary to shift or transport them in parts for assembly and erection at the site in the steel plant, they must nevertheless be deemed as individual machines having specialised functions. 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....
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.... and consists of bottom plates, tanks, coils, drive frames, supports, plates, etc. The aforesaid pails were cleared from the premises of the appellants and the mono vertical crystalliser was assembled and erected at site. The process involved welding and gas-cutting. The mono vertical crystal User is a lull structure, rather like a tower with a platform at its summit. This Court noticed I hat marketability was a decisive test for dutyability. It meant that the goods were saleable or suitable for sale, that is to say. They should be capable of being sold to consumers in the market, as it is. without anything more. The Court then referred to the decision in Quality Steel Tubes [(1995) 2 SCC 372 (1995) 75 ELT. 17] and distinguished the judgment in Narne Tulaman [(1989) 1 SCC 172 1989 SCC (Tax) 64. (1988) 38 ELT 566: 1988 Supp (3) SCR 1] holding that the contention that the weighbridges were not goods within the meaning of the Act was neither raised nor decided in that case. After considering the material placed on the record it was held that the mono vertical crystalliser has to be assembled, erected and attached to the earth by a foundation at the site of the sugar factory. It is not....
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....ble 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-erecting it at another site. We have earlier noticed the processes involved and the manner in which the equipments were assembled and erected. We have also noticed the volume of the machines concerned and their weight. Taking all these facts into consideration and having regard to the nature of structure erected for basing these machines, we are satisfied that the judicial member of CEGAT was right in reaching the conclusion that what ultimately emerged as a result of processes undertaken and erections done cannot be described as "goods" within the meaning of the Excise Act and exigible to excise duty. We find considerable sim....
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....ise 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 dated 30-11-1999 to the four manufacturing units as well as to Solidmec calling upon them to show cause why the amounts mentioned in the said notice be not recovered from them towards Central excise duty. The notice accused the ....
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.... per se immoveable properly What is argued is that they become immovable as (hey are permanently imbedded in earth in as much as they are fixed to a foundation imbedded in earth no matter only 1 = feet deep. That argument needs to be tested on the touch stone of the provisions referred to above. 24. Section 3(26) of the General Clauses Act includes within the definition of the term "immovable 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 bui....
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....he English law attaches greater importance to the object of annexation which is determined by the circumstances of each case. One of the important considerations is founded on the interest in the land wherein the person who causes the annexation possesses articles that may be removed without structural damage and even articles merely resting on their own weight are fixtures only if they are attached with the intention of permanently improving the premises. 29. The Indian law has developed on similar lines and the mode of annexation and object of annexation have been applied as relevant test in this country also There are cases where machinery installed by monthly tenant wax held to be moveable property as in cases where the lease itself contemplated the removal of the machinery by the tenant at the end of the tenancy 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....
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....uildings 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 attached to what is imbedded for the permanent beneficial enjoyment of that to which it is attached], for the reason that an attachment to fall in the third category it must be for permanent beneficial enjoyment of that to which the plant is attached. The Hon. Court even went on to distinguish and record with approval earlier decisions on the issue of 'immovable property'. We may have a look at the same, too. 33. In Sirpur Paper Mills Ltd. (1998) 1 SCC -400] this Court was dealing with a near similar situation as in the present case. The question there was whether the paper machine assembled at site mainly with the help of components bought from the market was dutiable under the Central Excise Act, 1944. The argument advanced an behalf of the assessee was that since the machine was embedded in a concrete base the same was immovable property even when the embedding was meant only to provide a wobble free operation of ....
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....f 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 within the meaning of the Central Excise Act, 1944. This Court on facts noted that mono vertical crystallisers are fixed on a solid RCC slab having a load bearing capacity of about 30 tonnes per square metre and are assembled at site with bottom plates, tanks, coils, drive frames, supports, plates, distance places, cutters, cutter supports, tank ribs, distance plate angles, water tanks, coil extension pipes, loose bend angles, coil supports, railing stands, intermediate platforms, drive frame railings and flats, oil trou....
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.... without which the same could not become functional. The machines lit us becoming a part 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 the necessary intent of making the same permanent cannot, in our opinion, constitute permanent fixing, embeddi....