AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 1334
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.... referred to as the "appellant") against the order of Authority for Advance Ruling No. 10/2020 dated 08.06.2020 3. BRIEF DISCRIPTION * The company Jabalpur Hotels Private Limited was incorporated on 13th March 2018. The company was established with an object to construct Hotel in Jabalpur at Mauza Ghana Khasara No 195/14, 195/2, 194 Nagpur Road, Jabalpur. * Company started construction of Hotel and completed a major part of its work. * The Hotel is in construction stage and the promoters of the hotel have some doubt on the issues of Input Tax Credit under GST hence preferred to file Advance Ruling before the Authority. 4. STATEMENT OF FACTS- * Jabalpur Hotels Private Limited is constructing a Hotel at Mauza Ghana Khasara No 195/14, 195/2, 194 Nagpur Road, Jabalpur. * The hotel will be multi storied hotel and will have approx. 100 rooms. * The hotel will be equipped with other facilities such as gym, spa, swimming pool, restaurant, banquet hall, marriage lawn and garden etc. * As there will be some rooms of the hotel which would have declared tariff of more than Rs. 7500 and hence the restaurant of the hotel will be chargeable to GST @ 18% instead of 5% and would be ....
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....o be deleted. * As Lift/escalator is a machine and it falls under HSN 8428 and hence excluded from block credit as specified in section 17(5). AAR misinterpreted the same. * The lift install in the Hotel is a Hydraulic lift and can be installed and un-installed without damaging any part of building. Hence the order of AAR is bad in law. * The assessee craves leave to raise any other ground/(s) on or before the date of personal hearing to prove that the order is bad in law. 1. INTERPRETATION OF LAW- 1.1. SECTION 17(5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely- a. - - - - - - b. - - - - - - c. - - - - - - 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 1 - For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capital....
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....e explanation and concluded that any plant or machinery attached to land, building or any other civil structures, telecommunication towers and pipelines laid outside the factory premises shall not be considered as plant and machinery. This is an incorrect interpretation of the explanation. 1.5. The officer has agreed that if a plant and machinery is installed on a foundational structural support thus, that structural support is plant and machinery but the lift which is a plant and machinery but since installed in building, the lift per say becomes part of building. Hence, it required to be examine as to whether a lift is an immovable property (i.e., part of a building) or whether it could be regarded as 'plant and machinery'. 2. DISCONSIDERATION OF LIFT AS AN INTEGRAL PART OF BUILDING- 2.1. Immovable property has been defined as under: 2.1.1. CBEC Circular Number 58/1/2002-CX, dated 15/1/2002 where in para (e) it has been clarified that If items assembled or erected at site and attached by foundation to earth cannot be dismantled without substantial damage to its components and thus cannot be reassembled, then the items would not be considered as movable and will, ther....
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....e in the Judgment of Supreme Court where Honourable Supreme Court held machine is not immovable property: 3.1. Sirpur Paper Mills Ltd. vs. Collector of Central Excise, Hyderabad (1998 (1) SCC 400)-CEGAT recorded finding that whole purpose behind attaching machine to a concrete base was to prevent wobbling of machine and to secure maximum operational efficiency and also for safety. Supreme Court held that in view of those findings it was not possible to hold that the machinery assembled and erected by the appellant at its factory site was immovable property as something attached to earth like a building or a tree. The test, it was noted, would be whether paper-making machine could be sold in market and as Tribunal had found as a fact that it could be sold, so machine was held to be not a part immovable property of the company. 3.2. Commissioner Of Central Excise, ... vs Solid & Correct Engg. Works & Ors on 8 April, 2010 - Attachment of the plant in question with the help of nuts and bolts to a foundation not more than 1 = feet deep intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached....
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....ether the annexation is with the object of permanent beneficial enjoyment of the land or building. Machinery for metal -shaping and electro - plating which was attached by bolts to special concrete bases and could not be easily removed, was not treated to be a part of structure or the soil beneath it, as the attachment was not for more beneficial enjoyment of either the soil or concrete. Attachment in order to qualify the expression attached to the earth, must be for the beneficial attachment of that to which it is attached. Doors, windows and shutters of a house are attached to the house, which is imbedded in the earth. They are attached to the house which is imbedded in the earth for the beneficial enjoyment of the house. They have no separate existence from the house. Articles attached that do not form part of the house such as window blinds, and sashes, and ornamental articles such as glasses and tapestry fixed by tenant, are not affixtures. 3.2.3. It is noteworthy that in none of the cases relied upon by the assessee referred to above was there any element of installation of the machine for a given period of time as is the position in the instant case. The machines in questio....
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....le property- 4.1. T.T.G. Industries Ltd. V. CCE, Raipur 2004 (167) ELT 501 (SC), the machinery was erected at the site by the assessee on a specially made concrete platform at a level of 25 ft. height. Considering the weight and volume of the machine and the processes involved in its erection and installation, this Court held that the same was immovable property which could not be shifted without dismantling the same. 4.2. Essar Telecom Infrastructure Pvt. Ltd. (supra)on Mobile Towers by Karnataka High Court, which differed with the view of Bombay High Court's judgment in Hutchison Max Telecom P Ltd [(2008) 224 ELT 191 (Bom)]. However mobile towers are standalone entities erected usually on roof-tops after an agreement with the owner of the building for using the space for a limited period of time, subject to periodic renewals. On the other hand, the Tower Package involves the erection of a series of towers on acquired land for use in perpetuity. In contrast to the time-bound nature of the agreements for using building spaces for erecting mobile towers, the Tower Package is not being constructed with the contemplation of such relocation. The judgment of Karnataka High Court i....
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....of structures for support of capital goods, except for the provision of one or more of the specified services; 7.2.3. PROVISION OF SECTION 17(5) OF CGST ACT 2017- As per section 17(5)(c) of the CGST Act, 2017, input tax credit shall not be available in respect of the 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. As per Section 17 (5)(d) of CGST Act 2017, ITC shall not be available for any goods or services used by a taxable person for the construction of immovable property (other than Plant & Machinery) on his own account even when used in course or furtherance of business. Explanation: "Construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization. to the said immovable property. Please note that 'alterations' and 'repairs' are also included in this definition if capitalized. 7.3. IMMOVABLE PROPERTY UNDER EXCISE ACT - The Excise duty was a duty levied on manufacturing of movable goods, the test of movable and immovable goods is as under- 7.3.1. If items ....
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....TMT bar for providing storage facility without which storage and warehousing services could not have been provided and the finding of the original authority as well as the appellate authority are clearly erroneous. 7.6. Further, the following judicial pronouncements permit claim of CENVAT credit on goods or services or both used in fabrication of parts, components, accessories of the plant and machinery. It has been consistently held that the parts, components, accessories come into existence before the installation of the machinery and credit of taxes paid on the same cannot be denied even if they become part of the immovable property after installation of the plant and machinery. 7.6.1. Commissioner of Central Excise & Service Tax vs. India Cements Ltd. 2014 (310) E.L.T. 636 (Mad). 7.6.2. Commissioner of Central Excise Jaipur vs. Rajasthan Spinning & Weaving Mils Ltd.2010(255) ELT 481 (S.C.) 7.6.3. Saraswati Sugar Mill Vs. Commissioner of Central Excise Delhi III 2011 (270) E.L.T. 465(S.C.) 8. Contrary Judgement- Contrary Judgment of AAR, Madhya Pradesh on the same issue has been given in case of M/s Atriwal Amusement Park (2020) 04 CCH GST 0445 AARMP (Copy of the same has ....
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....onstruction 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. * The definition of immovable property is not provided under GST Act. According to section 3 (26) of the General Clauses Act, 1882, "Immovable property shall include land, benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached to the earth". According to section 3 of the Transfer of Property Act, 1882, "Immovable property does not include standing timber, growing crops or grass". * In his submission appellant has argued that the impugned item 'lift' merits classification as 'plant and machinery' and since 'plant and machinery' is excluded from the term 'immovable property', for the purpose of 17(5) (d), again appellant has pleaded that the plant and machinery includes certain foundations and structures however certain structures and foundations are excluded from Plant and Machinery and these are, land, building or any other civil structures, telecommunication towers and pipelines laid outside the factory premises.....