TaxTMI 
TaxTMI 
2019 (4) TMI 383
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.... = 2018 (12) TMI 475 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA pronounced by the Karnataka Authority for Advance Ruling. Brief facts of the case: 1. The Appellant is a Public Limited Company and is engaged in the manufacture and supply of steam turbine solutions for Industrial Captive and Renewable Power. The appellant manufactures steam turbines upto 100 MW. The Appellant is a manufacturer of steam turbines for providing renewable power solutions specifically, for Biomass, Sugar & Process Co-generation, Waste-to-energy and District Heating. 2. Apart from manufacturing, the Appellant also provides aftermarket services to its customers as well as turbine users of other manufacturers supported by its customer care support, which operates through a network of service centers. 3. The Appellant enters into agreement with their customers for design, manufacture and supply of Steam Turbine Generator Sets and also for commissioning and installation of Steam Turbine Generator sets at the site of the customers. In the course of such supplies, the applicant uses the Steam Turbines manufactured by them, while other components like condenser, Gear box, alternator, AVR panel, etc are procu....
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....the steam is converted into work i.e Kinetic energy. The rotating movement of the rotor is transferred to a generator through a coupling and power is produced. The very intention of the waste to energy project is to use MSW as an input and generate electrical energy as the output. The steam turbine used in the MSW based power projects are specifically designed and tailor made for these projects. These turbines once manufactured for Waste-to-energy projects cannot be used for the normal power projects. 8. The appellant filed an application on 06.02.2018 before the Karnataka Authority for Advance Ruling under Section 97 of CGST, KGST IGST Act,2017 read with Rule 104 of CGST / KGST Rules, 2017 in form GST ARA-01, seeking a ruling on the following question: Whether the turbine generator set to be supplied by the applicant to the buyer for use in waste-to-energy project is covered under St.No.234 of Schedule I of Notification No. 1/2017-IGST(Rate) dated 28.06.2017 as "Renewable energy devices and parts for the manufacture of waste to energy plants/devices" attracting 5% levy?" 9. The Karnataka Authority for Advance Ruling, vide Advance Ruling No KAR ADRG 28/2018 dated 17-11-2018 = 2....
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.... the First Schedule shall, so far as may be, apply to the interpretation of this Notification. 11.4- They submitted that the product supplied will undisputedly be covered under tariff heading 84 of the Customs Tariff Act, 1975, which deals with Nuclear Reactors, boilers, machinery and mechanical appliances; parts thereof. 11.5. The drew the attention to Schedule I of the Notification No. 1/2017-lntegrated Tax (Rate) which provides the list of goods that attract IGST at the rate of 5%. Extract of the SI-No. 234 of the Notification reads as below: 234 84 or 85 or 94 Following renewable energy devices & parts for their manufacture (a) Bio-gas plant (b) Solar Power based devices (c) Solar Power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants/devices (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy device/plants 11.6, They submitted that as per the above entry, supplies of the specific renewable energy devices falling under Chapter heading 84, 85 or 94 & parts for their manufacture shall attract IGST at the rate of 5%. The renewable energy devices include "Waste to energy plants/ devices" 11....
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....bmitted that the product "Steam turbine generator sets" supplied by them falls under SI.No 234 of Notification No. 01/2017 dated 28.06.2017. 12.4. Further, they have submitted that the decision taken by CESTAT in the case of Triveni Engineering and Industries Ltd vs CCE, Bangalore reported in 2004 (172) ELT 353 (Tri-Bang) =2004 (6) TMI 128 - CESTAT, BANGALORE which was affirmed by the Supreme Court in 2015 (321) ELT A280 (SC) = 2015 (4) TMI 1078 - SUPREME COURT, cannot be applied while interpreting the present Notification No.01/2017-IT(Rate) dated 28.06.2017, inasmuch as the scope of the present Notification is much wider than the Notification of Central Excise Regime. 12.5. They have submitted that in the IGST Notification, the scope of the entry includes renewable energy devices & parts for their manufacture. Further, the specific entry reads as "Waste to energy plants/ devices", The text of the entry itself shows a clear departure from the exemption Notification in the Central Excise Regime inasmuch as the entry is not limited to 'waste conversion device producing energy' only but includes 'waste to energy plants/devices' in its entirety and includes parts used for the ....
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....n the entire waste to energy plant and not to specific devices engaged specifically in the conversion of waste to energy; that Para 14.8 of the impugned order holding that 'Turbine' is not a renewable energy device because the turbine at no stage acquires the nature of a device which converts waste to energy, is not in consideration of the wide import of the term 'plant' and hence deserves to be set aside. 14. Further, they have drawn attention to other advance rulings pertaining to 'waste to energy plants/devices which gives the benefit to devices used in Waste to Energy Plants: * Advance Ruling pronounced for M/s. Boldrocchi India Pvt.Ltd (Advance Ruling No. HAR/HAAR/R/2018-19/12) = 2019 (2) TMI 1003 - AUTHORITY FOR ADVANCE RULING, HARYANA the question for consideration was whether benefit of Entry 234 extended to 'waste to energy plant boilers s Flue Gas Cleaning System. The Authority held that 'pollution control devices' being supplied by the appellant are covered under Sl.No.234 of Schedule I of Notification No. 01/2017-CT dated 28.06.2017, since even 'pollution control equipment and machinery' are an integral part of Waste to Energy Power Plants. * Advance Ruling pronou....
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....itial setting up of the renewable energy plants. In addition, it is also explicitly stated in the Circular that, prior to making the supplies, the supplier must satisfy himself on the requisite documentation from the buyer to ensure that the supplies are used only in Waste to Energy Plants. They reiterated that the Turbine-Generator set are supplies exclusively to the projects of waste-to-energy plants and are not used elsewhere; that a Turbine-Generator set is a sina qua non to the establishment of a waste to energy plant and hence is most certainly used in initial setting up of the plant PERSONAL HEARING: 17. The Appellant was called for a personal hearing on 19.022019 and were represented by their Advocate Shri. Shivadass. He reiterated the submissions made in the grounds of appeal and also submitted written submissions in support of their plea- The Advocate relied on the Advance rulings given by Authorities in other States and submitted that in the cases of Mukund and Enexio, the project of Jindal Urban Waste Management is the same customer to whom the Appellant in the instant case is -supplying the Turbine Generator sets; that it would be unjust to not give the benefit of t....
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.... Appellant to the buyer for use in the waste-to-energy project is covered under SI.NO 234 of Schedule I of Notification No 01/2017 dated 28.06.2017, attracting GST levy at 5%. 21. For ease of understanding the relevant entry Sl-No 234 of Schedule I of Notification No 01/2017 dated 28.062017 as it stands today, is reproduced below: 234 84 or 85 or 94 Following renewable energy devices & parts for their manufacture (a) Bio-gas plant (b) Solar Power based devices (c) Solar Power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants/devices (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy device/plants (h) Photovoltaic cells, whether or not assembled in modules or made up into panels. 22. The Schedule I of Notification No 01/2017 dated 28.06.2017 as amended prescribes a rate of 5% on all goods whose description is mentioned in Col 3 of the above table and which are falling under the Chapter heading mentioned in Col 2. Therefore, the goods described under (a) to (h) of Col 3, if falling under Chapter heading 84 or 85 or 94 of the Customs Tariff Act will be eligible for GST rate of 5%. The parts use....
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....l, turbine drain system, safety trip, monitoring and controls and other instrumentation as required. The Turbine Generator set by itself does not qualify as a waste to energy plant. The turbine generator set together with the boilers, air cooled condensers and a host of other parts, constitute a waste to energy plant. 25. The item described at (e) in Col 3 of entry Sl.No. 234 of Notification No 01/2017 is "waste to energy plants/devices". The words +plant' and 'device' have not been defined in the GST law. The meaning to be assigned to these terms must, therefore, be gathered having regard to the context in which the term is employed and the object it seeks to achieve. In this case, the use of the terms 'plant' and 'device' in the item (e) of entry SI.No. 234, is of a wide connotation used to cover the entire process of converting waste to energy. It cannot be interpreted to limit its meaning to only those goods which convert waste into steam and leave outside its scope those goods which convert steam to electricity. The opinion of the AAR that since the turbine does not work on waste but converts steam into energy, and since the Sl.No. 234 is applicable only to devices that conve....
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....icating and control oil system, speed governing and control, turbine drain systems safety trip, monitoring and controls and other instrumentation as required- In terms of Note 4 of Section XVI of the Customs Tariff, "where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function." In this case, the Turbine generator set which consists of many individual components all work together to perform the defined of converting steam to electricity. Therefore, the same is classifiable under Chapter Sub-heading 8406 82 of the Customs Tariff Act, 1975. 27. The CBIC in its Circular No 80/54/2018-GST dated 31.12.2018, at Para 11, has clarified that the concession of 5% rate as per entry SI No 234 of Notification No 01/2017 would be available only to such machinery, equipment, etc which fall under Chapter 84, 85 and 94 and used in the initial setting up of rene....