TaxTMI 
TaxTMI 
2020 (4) TMI 631
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....cant. 2.1 Process of manufacturing salt and bromine chemicals: 1. The applicant may point out that Salt and Brine are produced from sea water which requires solar evaporation. For the purpose of manufacturing salt the applicant has to construct "Bunds" which are also known as "crystallizers" wherein Salt gets deposited. Due to atmospheric heat and solar evaporation raw salt crystalize from sea water in the crystallizers within 40 to 45 days. Later on the raw salt thus deposited is harvested either manually or by machines. 2. In order to produce industrial salt, the harvested salt in the form of wet crystals is washed in the washery plant with brine to remove insoluble matter as well as soluble impurities. The washery plant consists of steel structures in which the applicant has to install equipment like Belt conveyor, metallic screener, hopper, and lay the civil foundation at different heights as per process requirement.. 3. After harvesting the raw salt, the remaining brine is discharged into the circuit area and stored in the Reservoir for conversion into "bittern" which is used as raw material in the manufacture of bromine. In order to form such circuit the applicant requ....
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....: "17(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :- (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation - For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property;" 2.5 Thus while input tax credit is not admissible in respect of works contract services or any goods and services for construction of immovable property, a specific exception is made with regard to "plant and machinery". The phrase "plant and machinery" has been defined in Explanation to Section 17 of the GST Acts which read....
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....Hon. Supreme Court thought it fit to refer only to 3 to 4 decisions and proceeded to make following observations: "The classic definition of 'plant' was given by Lindley, L.J. in Yarmauth v. France [1887] 19 Q.B.D. 647, a case in which it was decided that a cart-horse was plant within the meaning of Section 1(1) of Employers' Liability Act, 1880. The relevant passage occurring at page 658 of the Report runs thus: "There is no definition of plant in the Act: but, in its ordinary sense, it includes whatever apparatus is used by a business man for carrying on his business-not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business. " In other words, plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant the article must have some degree of durability, as for instance, in Hinton v. Maden & Ireland Ltd., 39 I.T.R. 357 = 1....
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.... technical know-how did not perform any mechanical operations or processes but that according to Supreme Court cannot militate against their being a plant since they were in a sense the basic tools of the assessee's trade having a fairly enduring utility. 2.11 In this case of Scientific Engineering House (P) Ltd. (1985 (11) TMI 1 - SUPREME COURT) Hon. Supreme Court has approved the decision of Hon. Gujarat High Court in the case of Commissioner of Income Tax, Gujarat v. Elecon Engineering Co. Ltd. 96 I.T.R. 672 = 1974 (2) TMI 7 - GUJARAT HIGH COURT, wherein the Gujarat High Court has, after exhaustively reviewing the case law on the topic, held that drawings and patterns which constitute know-how and are fundamental to the assessee's manufacturing business are 'plant'. Hon. Gujarat High Court has in the case of Elecon Engineering Co. Ltd. (supra) which has been approved by Hon. Supreme Court, after reviewing various authorities, concluded as under: "56. On reviewing these authorities, a broad consensus emerges from which the essential characteristics of plant can be clearly gleaned. The word "plant", in its ordinary meaning, is word of wide import and in the context of section 3....
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....acture of salt and bromine is not possible without the "bunds" / "crystallizers". The "bunds" cannot be discarded as merely a building or a civil structure in which the manufacturing process is undertaken. The "bunds"/ "crystallizers" are an integral part of the apparatus with the help of which manufacturing process is undertaken and therefore it qualifies as plant and machinery for which input tax credit is admissible. Other Judgments of Hon. Supreme Court squarely support the applicant: 2.14 The applicant is also supported in its submission by the judgment of Hon. Supreme Court in the case of Jayaswal Neco Ltd. v/s Commissioner of Central Excise (2015) 319 ELT 247 (SC) = 2015 (4) TMI 569 - SUPREME COURT. In this case railway tracks were used in transporting hot metal in ladle placed on ladle car from blast furnace to pig casting machine through ladle car where hot metal was poured into pig casting machine for manufacture of pig iron. The system also helped in taking the hot pig iron from the pig casting machine to the pig storage yard wherein hot pig iron was dumped for cooling and making ready for dispatchers. The railway tracks were also used in handling of raw materials. The....
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....se AIR 1972 SC 1863 = 1972 (5) TMI 59 - SUPREME COURT as follows: "The ejusdem generis rule strives to reconcile the incompatibility between specific and general words. This doctrine applies when (i) the statute contains an enumeration of specific words; (ii) the subjects of the enumeration constitute a class or category; (iii) that class or category is not exhausted by the enumeration; (iv) the general term follows the enumeration and (v) there is no indication of a different legislative intent." 2.18 Reference is invited to a judgment of Hon. Supreme Court in the case of Siddeshwari Cotton Mills (P) Ltd. v/s Union of India AIR 1989 SC 1019 = 1989 (1) TMI 126 - SUPREME COURT. Section 2(f) of the Central Excise and Salt Act, 1944 provided for certain activities which were deemed to be manufacturing processes. One of the clauses read as "in relation to goods comprised in Item No. 19-1 of the Schedule to the Central Excise Tariff Act, 1985, includes bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink-proofing, organdie processing or any other process or any one or more of these processes." The question before Hon. Court was the ambit of the....
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.... the case of the applicant under any of the provisions of the GST Acts. Discussion and findings: 3. We have considered the submissions made by the applicant in their application, and at the time of personal hearing. Jurisdictional Authority has not furnished any comments in the matter. 4. The applicant has submitted that process of manufacturing salt and bromine chemicals, as under: * Salt and Brine are produced from sea water which requires solar evaporation. For the purpose of manufacturing salt the applicant has to construct "Bunds" which are also known as "crystallizers" wherein Salt gets deposited. Due to atmospheric heat and solar evaporation raw salt crystalize from sea water in the crystallizers within 40 to 45 days. Later on the raw salt thus deposited is harvested either manually or by machines. * In order to produce industrial salt, the harvested salt in the form of wet crystals is washed in the washery plant with brine to remove insoluble matter as well as soluble impurities. The washery plant consists of steel structures in which the applicant has to install equipment like Belt conveyor, metallic screener, hopper, and lay the civil foundation at different height....
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.... the following supplies of the goods or services or both, namely:- (a) Export of goods or services or both; or (b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit." 7.1.2 Section 2(78) of the Act has defined the term "Non taxable supply" as hereunder- "Non taxable Supply" means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods & Services Tax Act. 7.1.3 Exempt supply is defined under section 2(47) of the CGST Act, 2017 (hereinafter referred to as "The Act") as reproduced below- "Exempt Supply" means supply of any goods or services or both which attracts nil rated of tax or which may be wholly exempt under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes Non- Taxable supply. 8. We further observe that section 16(2) of the Integrated Goods and Services Tax Act, 2017 (IGST Act for short) states that "subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, 2017, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exe....