TaxTMI 
TaxTMI 
2021 (4) TMI 614
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.... The applicant now caters to a wide cross section of industrial segments from utility to renewable energy sector and to individual retail customers across the globe. 3. The applicant submitted that they provide an extensive range of Linear Transformers from R-core to EI and Toroidal to Current transformers. These transformers can be supplied according to customer specific requirement in terms of thermal insulation, cut-offs, static-magnetic shielding, special mounting, epoxy moulding, vacuum impregnation, etc. 4. The applicant submitted that they manufacture Telecom and Data Transformers of highest quality standards to satisfy customer requirements. With engineering support from Custom Magnetics, USA they design the most efficient and cost effective solutions for their customers. All Telecom Transformers are tested for QA both during production and before shipping. Incoming quality control tests are conducted on all raw materials. The quality control department of Applicant is equipped with the latest computerized equipment available. Each shipment is provided with a full quality control report and certificate of compliance (COC). Applicant also manufactures Standard Line transfo....
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....ding: (i) The Applicant has received an Order from M/s. Adani Green Energy Limited (PO: 4500315135 dated 08.11.2019), the copy of which is enclosed herewith for the kind consideration for supply of 25MVA ONAN/ONAF 33/0 8/0 8KV Aluminium Foil Type Winding Inverter Duty Transformers, Mandatory Spares for Transformers which also includes Packing and Forwarding, Freight and Insurance charges up to the Site of the customer. (ii) The product to be supplied falls under Chapter Heading 8504 to the best belief and understanding of the Applicant as the Applicant since years classifies the product under the said Chapter Heading. (iii) As per the indemnity / undertaking given by the counter recipient of supply i.e. M/s. Adani Green Energy Private Limited, the recipient of supply is developing and setting up a 75MW Solar Project at Chitrakoot, Uttar Pradesh (UPNEDA Project) for which an approval has been granted to the recipient of supply from the Ministry of New & Renewable Energy. (iv) For the above initial setting of the Solar Project, the recipient of supply of the applicant require machine, equipment, power cables, transformers and many other parts & components of the solar Power p....
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...., Transportation to Site with Transit Insurance and Supervision of erection, testing & commissioning of the transformer complete with all fittings and accessories. 2.2.0 The scope of supply shall also include the following. a) First fill of consumables. b) Spare parts required for successful commissioning. c) Mandatory spare parts for three years trouble free operation & maintenance. O&M spares shall be considered for evaluation of bid. It shall not be binding on the owner to procure all of the O&M spares. 2.3.0 Scope of Services a) Preparation and submission of drawings & document in soft and hard form as per the drawing/document submission schedule. b) Supervision of erection, testing & commissioning of transformer. c) Submission of progress report. d) Participation in project review /Technical Coordination meetings. 2.4.0 Exclusion a) Civil works. b) Fire Fighting Equipments. c) Receipt, Unloading & Storage d) Erection, Testing and Commissioning. 2.5.0 Terminal Points a) HV Bushing for termination in Cable Box. b) LV Bushing for termination in Cable Box. c) Transformer Earthing Pads." The Copy of the technical specification is enclosed with....
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....being a taxable service specified in the entry at S. No. 38 of the table mentioned in the notification No. 11/2017-Central Tax (Rate), dated 28 June 2017 the value of supply of goods for the purposes of this entry shall be deemed as 70% of the gross consideration charged for all such supplies, and the remaining 30% of the gross consideration charged shall be deemed as value of the said taxable service." 13. The applicant submitted that further, a new entry 38 has been added in the Notification No. 11/2017-Central Tax (Rate) pertaining to rate of services vide Notification No. 27/2018-Central Tax (Rate) dated 31st December, 2018 read with similar Notification issued under the provisions of the Gujarat GST Act,2017 which prescribes an 18% GST rate for services under chapter 9954, which pertains to construction services, or 9983, which pertains to other professional, technical and business services (except research, development, legal and accounting services), or 9987, which pertains to "maintenance, repair and installation (except construction) services", "by way of construction or engineering or installation or other technical services, provided in relation of setting up of" bio-ga....
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....ant meet CSA and CE standards as well as class B insulation system. 20. The Applicant further submitted that they are capable of manufacturing 25MVA, 66KV Class Power Transformer. The said transformer manufactured under stringent stage wise Quality Checks till dispatch. The state-of-the-art facility accompanied by a team of qualified and experienced professionals adds reliability to each product. They have an annual manufacturing capacity of 600MVA. All the transformers of Applicant are type tested at NABL certified laboratory. They had type tested power transformers from 3.15MVA, 33KV Class to 15MVA, 66KV Class. 21. The Applicant has received an Order from M/s. Adani Green Energy Limited (PO: 4500315135 dated 08.11.2019), for supply of 25MVA ONAN/ONAF 33/0 8/0 8KV Aluminium Foil Type Winding Inverter Duty Transformers, Mandatory Spares for Transformers which also includes Packing and Forwarding, Freight and Insurance charges up to the Site of the customer. 22. In this regard, applicant has submitted an indemnity / undertaking dated 05.02.2020 given by M/s. Adani Green Energy Private Limited i.e. recipient of supply of Aluminium Foil Type Winding Inverter Duty Transformer wherei....
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....r manufacture i.e. Solar Power Generating System. 25.1 Now we examine the classification of Aluminum Foil Type Winding Inverter Duty Transformer and their parts as per CTH and see whether the goods are covered under Chapter Heading 84 or 85 or 94 of the Custom Tariff code. 25.2 The tariff code 8504 of Customs Tariff Act, 1975 covers the "ELECTRICAL TRANSFORMERS, STATIC CONVERTERS (FOR EXAMPLE, RECTIFIERS) and INDUCTORS". The impugned product i.e. Inverter Duty Transformer is classifiable under Tariff Heading 8504. CTH 85049010 of Customs Tariff Act, 1975 covers the "parts of Transformer". Thus applicant satisfies first condition that the goods i.e. Inverter Duty Transformer and their parts are covered Chapter 85 of Customs Tariff Act, 1975. 25.3 Now we turn to the next aspect of the notification to find out whether the impugned goods i.e. Inverter Duty Transformer is a device or parts for the manufacture of especially Solar Power Generating System. Solar Power Generating System and words "devices and parts" are not defined under the provision of GST Act or Rules or the notifications issued there under. 25.4 Therefore in common parlance Solar power generating systems generally a....
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....as the ratio of the number of turns between the two windings. There are different configurations for both single-phase and three-phase systems. The ratio between the number of actual turns of the wire in each coil determines the output voltage and hence the type of transformer. With no distinction with regard to shape or size, a transformer converts electrical power from one type to another. Some of the major types of transformers used in UPS systems and inverters are mentioned below. * Inverter transformers or electronic transformers: These are commonly used for small power conversion or to get the desired voltage. It can be said that all inverter transformers are power transformers but not all power transformers are inverter transformers. * Inverter duty transformers: These are mainly used in solar applications and operate at the fundamental frequency of an alternating system. They are designed for one or more output windings connected to the inverter's load. Owing to multiple outputs, multiple inverters paralleled to photovoltaic arrays are connected to these transformers and reduce the project cost without compromising on the transformer's functions. Generally, with the th....
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....tern. The above lantern required electricity for its working. It is possible to convert solar energy to electricity with the help of inverter charger manufactured by the appellants. The Dy. General Manager has certified that the inverter merger constitutes solar power generating system as it performs the function of generating the required high frequency AC power from Sunlight with the help of SPV module and supplying it to the compact fluorescent lamp of a solar lantern. In view of the above expert opinion, we hold that the impugned item can be considered as solar power generating system and is entitled for the benefit of the exemption Notification. Therefore, we allow the appeal with consequential relief". (iii) In M/s. Phenix Construction Technology v. Commissioner of Central Excise & Service Tax, Ahmedabad-II [2017-TIOL-3281-CESTAT-AHM = 2017 (358) E.L.T. 241 (Tri. - Ahmd.)] the question under consideration was whether the structures and parts of structures cleared for initial setting up of solar power plant are eligible for the benefit of Notification No. 15/2010-C.E. The point of dispute in the said case law was that whether the aforesaid goods would qualify as components o....
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....able service. The explanation to the entry was added by Notification No. 24/2018-Central Tax (Rate), dated 31-12-2018 w.e.from 01.01.2019. 28. Further vide Notification No. 27/2018-Central Tax (Rate), dated 31-12-2018, an amendment was carried out and Serial No. 38 was inserted in Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 in respect of services related to setting up of solar power plants. The entry at Serial No. 38 is as follows: Sl.No. Chapter, Section or Heading Description of Service Rate (%) Condition 38 9954 or 9983 or 9987 Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following, - (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) Ocean waves/tidal waves energy devices/plants 9 - Explanation :- This entry shall be read in conjunction with Serial Number 234 of Schedule I of the Notification No. 1/2017-Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i), dated 28th June, 2017 vid....
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.... per, "Technical Specification" subsequent clarification issued on Tender Document (if any) & various correspondences exchanged as referred above. In case of any ambiguity in the documents the later document shall prevail. 1.4 Contractor has to comply short circuit test of transformer as per our technical requirements, it shall not absolve the contractor from performing his obligation under this contract and it shall in no way limit the liabilities and responsibilities of the contractor. In respect of the agreed parameters/ specification and the desired performance of the Plant/item/Material, short circuit of transformer to be performed in parallel to the schedule which was agreed in the contract. If found short circuit failed in first attempt of test, contractor has to perform Root Cause of failure (RCA) and the report to be submitted to Employer for evaluation and approval. Upon approval of said cause and the same shall be implemented on future design of transformer production and it shall undergo short test till the transformer passess the test. 2.0 Contract Price 2.1 The Contract Price for the scope of work/facilities as indicated above is Rs. 3,83,04,600/- as per *Price ....
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....On going through the clauses of both the purchase order and technical Specification it is observed that recipient of supply of goods and service i.e. M/s. Adani Green Energy Ltd. have given two Purchase order to the applicant one for supply of goods and second for supply of Service whereas the Technical Specification Ref: 5353-E-SEP-EES-TE-S-I-002 of above contract is single and contains both scope of supply of goods and service. Further, in the purchase order of goods covers scope of work as, "complete Design, engineering, manufacture, assembly, inspection and testing at manufacturer's works, packing & forwarding, Dispatch/ Transformer along with transit insurance charges on FOR Site basis of Inverter Duty Transformer along with Accessories". Purchase Order of service covers "Supervision of Erection and, Testing & Commissioning (ETC) charges of 5/6.25MVA, ONAN/ONAF, 33/0.8/0.8kV Aluminium Foil type Winding Inverter Duty Transformers (IDT) at site for the items/equipment as per Tender document". The technical specification for Aluminium Winding Inverter Duty Transformers covers the scope of supply and service both and mentioned that, "The Scope of supply shall cover Design, Enginee....
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....ng up of Aluminium Foil type Winding Inverter Duty Transformers. 31. Thus, from the above it is seen that the supply of the goods and the supply of service are inextricably linked with each other. It is not that the applicant has been assigned with the work of supply of goods only. But the applicant has been given the task of setting up the 'Aluminium Foil type Winding Inverter Duty Transformers'. Thus, though the Purchase Order's are made separately, it is one indivisible contract for the setting up of the Aluminium Foil type Winding Inverter Duty Transformers. In fact the technical specification is single for both the supply of goods and Service. Further, at the time of Personal hearing, we members have requested to the representative of the applicant to submit the copy of work contract/agreement but he has shown his inability to submit the same and quoted the reason that applicant have not make contract for supply with M/s. Adanai Green Energy Ltd. But we are not convinced with this argument of the applicant because Purchase order does not have any binding on both the parties and it is not legal document in case any dispute arises and matter goes in court of law. Contract is ma....
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.... under CTH No. 85 of Custom Tariff Act, 1975, which are specified under Entry No. 234 of Not. No. 01/2017-CT (Rate) and taxable. Hence first condition is satisfied. The applicant is supplying the service i.e. design, engineering, inspection, testing and supervision of erection & Commissioning etc. which is directly related to the Inserter duty transformer and such service covers under entry No. 38 of Not. No. 11/2017-CT (Rate) under "other technical services provided in relation of setting up of Solar Power Generating System". Hence second condition is also satisfied. 33. Therefore, in view of the above discussion we hold that the applicant is liable for payment of GST in terms of Explanation inserted in Entry No. 234 of Not. No. 01/2017-CT (Rate) dated 28.06.2017 vide Notification No. 24/2018-CT (Rate) dated 31.12.2018 and in terms of Serial No. 38 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 in respect of services considering the total value of both the Purchase Order i.e. P.O. No. : 4500315135 dated 08.11.2019 of goods and P.O. No. PO: 4500315135 dated 08.11.2019 of service. Explanation stated that out of the gross value of the supply, 70% shall be deemed to ....