TaxTMI 
TaxTMI 
2019 (7) TMI 617
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.... existing jetty and very much required for the purpose of safety and longevity of the jetty and it imperative for making the existing jetty as fully workable as an all-weather jetty and hence improves the operational efficiency of the applicant. 2. Whether on the facts and circumstances of the case, as per the law and scope of work, the works contract services which the KLPL intends to procure is not predominantly earth work (that is, constituting more than 75 percent. of the value of the works contract) and the services of the works contract by the contractor is covered under item (vii) of serial No.3 of Table of the Notification No. 11/2017-CentraI Tax (Rate) dated 28th June, 2017 as amended by Notification No. 31/2017 - Central Tax (Rate) dated 13th October, 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 any 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, the expre....
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.... Block-II & III (each Block of 740 M W capacity). Power Block II was commissioned but had not started commercial production; Power Block-III and Liquefied natural Gas (LNG) facility were under erection and was not commissioned before the whole plant project was abandoned. 8. That, Government of Maharashtra gave a guarantee which covered the payments due from the Maharashtra State Electricity Board (MSEB) to DPC under the Power Purchase Agreement (PPA). Govt. of India has also given a counter guarantee for the project covering some of the capacity and energy payments as well as termination payments. Due to high tariff & other contractual reasons, dispute arose between the DPC and M$EB on PPA, resulting in abandoning the project by its promoters. Thereafter, DPC invoked the Govt. of India counter guarantee claiming payments of amount due from MSEB. Matter went into litigation at various legal forums including arbitration at London, Supreme Court of India etc. 9. That, In view of substantial public money invested in the project, instance of prospective liabilities on Gol and GOM on account of their respective guarantees on the project as well as the dire need of power in the sta....
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....in sea and it is about 1.8 km from the tanks areas and is well within the plant area. The length of the jetty is around 300 meters & handles around 20 LNG Cargo in a year. Generally the capacity of the cargos is around 130000 to 170000 Cubic meters with a length of 280-300 meter length. 17. That, adjacent to the jetty, there is existing break water wall which was constructed by then DPC and still incomplete, which prevents the high waves and tide to touch the jetty and cargo/ships of LNG and thus acts as a safety wall from the jetty as well as the ship from the danger of damage due to high waves and water current. However the existing break water wall was not complete and requires immediate reconstruction in order to keep the jetty and cargo safe during the LNG unloading process. 18. That due to existing incomplete Break water wall, the NPSC provides only provisional clearances for the berthing and unloading of the LNG cargo and therefore does not allow the berthing of the cargo unless the height of the wave (swell) is less than 0.5 meters. 19. That, due to the above mentioned operational restriction, the jetty cannot work and therefore the existing break water wall: requi....
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....of services procured for the purpose of above said completion of the break water wall in terms of Notification No. 11/2017-C.T. (Rate) dated 28^th June, 2017 as amended by Notification No. 31/2017- C.T. (Rate) dated 13th October, 2017. 25. That the applicant has invoked the provision of Section 97 and the question asked is well covered under the jurisdiction of the Honourable Bench of the AAR in terms of section 97(2) of the GST Act. 3.B. Grounds of law Question No.1 1. Because the applicant is an registered person under the MGST/CGST provision and the works contract service to be supplied by the contractor for the proposed reconstruction of the break water wall which is very much integral part of the existing jetty itself and very much required for the safety and increase of operational efficiency as it will help the jetty to function in all weather across the year. Thus the break water wall will be used for the furtherance of the business of the applicant. 2. Because it is not covered under the exclusion clause of section 17(5) of the GST Act as the works contract services are for the purpose of the construction of the plant and Machinery. 3. Because the applica....
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.... Authority to submit any other information & documents and take any other grounds of law during the proceedings of this case. PRAYER The applicant humbly prays the Honourable - 1. To allow the applicant contentions and its entitlement to avail/utilize the input tax credit of the taxes paid for the supply of goods or services or both for the proposed construction/ reconstruction of the Break water wall. 2. To allow the applicant contention that it is squarely covered in the item (vii) of the SN3 of the notification no 11/2017 Central Tax (Rate) dated 28th June, 2017 as amended by Notification No. 31/2017 - Central Tax (Rate) dated 13th October, 2017 3. To pass any other order as the Honourable Authority may deem fit. 3C. Additional submissions The rejoinder is as follows: 1. The Government of India has entrusted the task of reviving and restructuring of the Dabhol Project to GAIL and NTPC (both are Government of India Undertakings). GAIL and NTPC have formed a Joint Venture Company, named Ratnagiri Gas and Power Private Limited (RGPPL) to complete the balance of the works at the LNG Terminal and Power Plant, commission the same and thereafter, operate the fac....
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....nts have contended that their product is a single instrument and not a group of instruments. According to them, a single instrument would not be covered by the expression apparatus'. As per the Dictionary meaning of the term 'apparatus' as set out in various dictionaries, it is defined as an appliance and the term 'appliance' had been defined as a device or a piece of equipment. The term 'appliance' in Law Lexicon has been defined as under: From the meanings by different dictionaries. "it becomes clear that (1) an "appliance" is quite distinct from "materials" from which it is made, and (2) an "appliance" as an apparatus. device or instrument is "means to an end" These two aspects should be borne in mind while considering whether a particular article can be called an appliance. The first aspect seeks to take an integrated view of the article concerned and says that materials or component parts of an appliance should not be mistaken as tantamount to the appliance itself. The second aspect emphasizes the fact that the importance of an appliance consists in its utility to serve the object for which it is possessed." Para-16 of I.C.B (P) Ltd. v. Collector ....
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.... the break water, being an immovable property, it is covered under the term "Plant or Machinery" for which an exception has been carved out from the clause of block credit of provision 17(5)(d) 14. The Acropods TM, which is an interlocking device are covered in the terms apparatus or equipment and it has to fixed to the earth by foundation of the rock amour of different sizes. 15. Therefore the breakwater is not covered with the term "other civil structure" as mentioned in the clause (i) of explanation to section 17(5). 16. Thus the construction of the breakwater services which would be received by the KLPL is covered under the exclusion clause of section 17(5)(d) and therefore is eligible to avail the input credits in terms of section 16. 17. The KLPL submits that the in a recent case where the similar matter was argued before the Honourable High Court of Orissa, in the case of Safari Retreats Private limited VS CC CGST and others. = 2019 (5) TMI 1278 - ORISSA HIGH COURT (copy of the order enclosed), in a similar fact of the case, the Honorable court has read down the rigorous of section 17(5)(d) and has allowed the Input credit on the construction of an immovable prop....
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....inery, But in the Section 17(6) of the GST Act explanation has been given for the expression Plant and Machinery as" Plant and Machinery means apparatus, equipments and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural support but excludes: i) Land, Building or any other Civil Structure; ii) Telecommunication Towers; and iii) Pipelines laid outside the factory premises. From the above explanation it is clear that the dealer is covered under this section. And the proposed 'breakwater wall' is a civil structure. 3) On the grounds of law at point no. 4 the applicant has further quoted a High Court ruling in the case of Mazgaon Dock Limited- reported in 191 ITR 460 = 1991 (3) TMI 114 - BOMBAY HIGH COURT, clarifying the term 'Plant and Machinery' as has not been defined in the section 17 of the GST Act, In the said judgment Hon'ble High Court has stated as follows, "In order for a building or concrete structure to qualify for inclusion in the term plant', it must be established that it is impossible for the equipment to ....
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....VAT-C-006) Ratnagiri, appeared & made written submissions. The application was admitted and called for final hearing on 22.05.2019. Sh. Prakash Sinha, C.A., appeared, made oral & written submissions. Jurisdictional Officer was not present. 06. OBSERVATIONS We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional office. The applicant, having a LNG regasification plant at Dabhol, Maharashtra are engaged in the regasification of the LNG therein. The LNG which is the raw material reaches their plant through a jetty where it is unloaded from various cargoes. They have submitted that, adjacent to the jetty, there is an existing breakwater wall which is in an incomplete state of construction, which acts as a safety wall by preventing high waves and tides to touch the jetty and cargo/ ships of LNG and thus prevents damage to the ships due to high waves and water current. However the existing break water wall being incomplete requires reconstruction in order to keep the jetty and cargo safe during the LNG unloading process. Due to Break water wall being incomplete, for safety purposes berthing of t....
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....hat is being constructed for the applicant can be considered to be "Plant and Machinery". The applicant contends that although the break water is an immovable property, it is covered under the term "Plant or Machinery" since 'acropods' which are used to construct the breakwater are interlocking devices fixed to the earth by foundation of the rock amour of different sizes are nothing but apparatus. We find that a breakwater is a barrier built out into the sea to protect a coast or harbour from the force of waves. Breakwaters reduce the intensity of wave action in inshore waters and thus reduces coastal erosion or provide safe harbourage to ships. The applicant has agreed that the breakwater is an immovable property. To find whether they are eligible to avail ITC of tax paid on the construction of such breakwater we need to find whether the same can be considered to be 'Plant and Machinery'. We shall now consider the meaning of the expression "Plant and Machinery' by referring to the provision of Section 17(6) of the CGST Act. The explanation under Section 17 (6) is reproduced below:- Explanation : For the purposes of this Chapter and Chapter VI, the expression "Plant and Machi....
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....couple of more judicial decisions but we find that the same have no relevance in the subject matter. The applicant has not been able to establish that it is impossible for them to function without breakwater wall. We now take up the second question for discussion. The same is reproduced as follows: Question No. 2 : Whether on the facts and circumstances of the case, as per the law and scope of work, the works contract services which the KLPL intends to procure is not predominantly earth work (that is, constituting more than 75 percent. of the value of the works contract) and the services of the works contract by the contractor is covered under item (vii) of serial No.3 of Table of the Notification No. 11/2017-CentraI Tax (Rate) dated 28th June, 2017 as amended by Notification No. 31/2017 - Central Tax (Rate) dated 13th October, 2017. Here the applicant's query is whether the services of the works contract by the contractor is covered under item (vii) of serial No.3 of Table of the Notification No. 11/2017-CentraI Tax (Rate) dated 28^th June, 2017 as amended. This authority is governed by the provisions of Chapter XVII of CGST ACT and the relevant Sections 95 to 98, 102, 10....