2019 (7) TMI 617
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.... 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 expression 'GST Act' would mean CGST Act and MGST Act. 02. ....
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....ad 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 state of Maharashtra, the Union Government formed an Empowered Group of Ministers (EGOM) to ex....
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....NG 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: requires reconstruction and for this purpose, the applicant has invited the tender where the scope of work are as follows - Basic design, detail engineering and ....
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....on 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 applicant is not covered under exclusion clause of Section 17(5)(d) as the goods or services or both received by the applicant is construction of the plant or machinery in his own accounts and it is u....
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....tions 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 facility. GAIL is managing after the balance of the works for the completion at the LNG Terminal. 2. RGPPL has engaged GAIL as the Owner's Engineer and in turn GAIL has appointed Engineers India Limited (EIL), as their primary Pr....
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....rious 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 of Central Excise, Baroda - 1997 (95) E.L.T 239 (Tribunal) = 1997 (7) TMI 294 - CEGAT, NEW DELHI is also given below. 16. We also consider that they were not an apparatus, appliance or equipment. The apparatus is a compound instrument designed to carry out a specific functi....
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....s 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 property. The court has observed that if it is not read down it will become ultra-virus. 18. The KLPL submits that its case is on the same facts where the construction of breakwater will enable the KLPL to operate in all weather condition and therefore there is no break in the chain from the construction of the bre....
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....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 function without the particular type of structure." 4) At the point no. 5 the applicant has quoted a Supreme Court ruling in the case of Dr. B Venkata Rao Hospital as reported in 243 ITR 81 (SC) = 1999 (2) TMI 11 - SUPREME COURT. In this case Hon'ble Supreme Court directed that, "In a case such as this the tribunal should proceed upon material placed by as....
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....sdictional 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 the cargo of LNG is only permitted when the height of the waves are less than 0.5 meters. Hence the berthing of ships is not possible at any or all times of the day. Hence the breakwater will be constructed, for which the tendering process would be done and the work of building such breakwater wall would be allotted to contractors. The services of the contractor will be covered under the serv....
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....ind 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 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 a reading of the above we find ....
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....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 28th 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, 103, 104 and 105. As per section 95, the term 'advance ruling' means a decision provided by this authority to the applicant on matters or questions specified in subsection 2 of Section 97, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. We find primarily that, as per provision of section 95 of CGST ACT, this authority can give a ruling to the applicant on matters or questions raised,....