TaxTMI 
TaxTMI 
2024 (9) TMI 298
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....nless the appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only,- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goo....
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....l for enhancement of the quality of output service; (iii) That this would result in increased contribution to the exchequer, in the form of taxes payable on (i) the enhanced rent receivable from the tenants, and (ii) from the consideration receivable separately towards the parking services provided to the customers of the tenants; that especially under the second category, the provision of service is solely dependent on the Rotary parking system and installation thereof; (iv) That all the eligibility and conditions for taking ITC on the goods/services as laid down in Section 16 of the CGST/TNGST Act, 2017, have been complied with, and that it is not the case of the Department that there was no compliance of legal provisions in the instant case by the appellant; they are therefore entitled to avail the ITC on the composite activity of supply of Rotary Car Parking system and the installation thereof, which are intended for furtherance of business (Renting of Immovable Property), for which registration has been obtained; (v) The AAR has observed that after installation only, it takes the shape of car parking and what was supplied were only constituent parts of the parking system....
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.... case; (xii) That there can be no legal sanctity for the observations of the AAR to the effect that the car parking system falls within the meaning of Section 3 (26) of the General Clauses Act, 1897 (permanently fastened to anything attached to earth) and Section 3 (c) of the Transfer of Property Act, 1882 (attached to what is imbedded for the permanent beneficial enjoyment of that to which it is attached), by placing reliance on the decision of the Hon'ble High Court of Allahabad, in the Tax Revision case No.910/2001, in respect of the Commissioner Trade Tax U.P. Lucknow Vs S/S Triveni N.L. Ltd.,; (xiii) That the observations of the AAR that rotary parking has been built in the own land of the applicant, with a view to retain the existing tenants and to have full occupancy rate, cannot prevent the appellant to sell or transfer to another place, or upgrade the system; Likewise, the observation of AAR that it is not the case of the applicant to dismantle and move the structure to some other place, and that the intention is to enjoy the benefit until the system ceases to exist or function, is not proper as the intention is the prerogative of the taxpayer; (xiv) That the appella....
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....hinery, that the parking system cannot fall within the scope of civil structures, and that there is no availment of ITC on that part of the civil structure, as the same is covered under the customer scope of work.; (xviii) That with regard to the AAR's observations on the definitions of the terms like Civil Structure, Structure, Building, Foundation, etc., the appellant stated the following points, i.e., * Car parking is covered under the category of Apparatus, Equipment and Machinery * The foundation and structural support is altogether different from the parking system and that the same are intended only for providing safety and stability of the parking system. * The primary object is to handle and move vehicles from one place to another, and therefore it falls under the category of plant and machinery. * The civil foundation work is required to be carried out by the customer as per the foundation drawings provided by the supplier, and since there is no mention of any other civil structure in the customer scope of works, the exclusion clause 'any other civil structure' does not have any application to this case. * The definition of 'structure' as per the Tamil Nadu Co....
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....n considering the constituent parts/components to be analogous to that of building blocks utilized in the construction of multi-storeyed conventional car parking seems to be subjective in nature and without legal sanctify, as it cannot be equated to a civil structure. (xxii) That without prejudice to any of the arguments advanced, the inordinate delay of 238 days in pronouncing the original ruling by the AAR, amounts to denial of justice. PERSONAL HEARING: 4.1 Shri A. Senthil Maharaj, Proprietor and Shri K. Rajendran, Consultant and the authorized representative (AR) of M/s. Arthanarisamy Senthil Maharaj, appeared for the Personal Hearing on 16.07.2024. The AR reiterated the submissions made by them in the 'Grounds of Appeal' filed along with the application. The AR stated that the appellant renders 'Renting of Immovable Property Service' of the premises owned by him. He clarified that the parking system is a separate structure falling under CTH 8428 and that the same is not part of the building. 4.2 The AR stated that the parking system is not to be compared to 'Lifts' which are part of a building, and the ITC of which is clearly blocked under Section 17 (5) of the CGST/TNGST....
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....17.07.2024 furnished the following documents, which are taken on record, viz., (i) The Brochure in respect of the Parking system manufactured by M/s. Parklayer. (ii) Drawing in respect of the Foundation work. On perusal of the documents furnished, it is seen that under the brochure, various types of parking systems, provided by the supplier (M/s. Park Layer), viz., Rotary Parking, Tower Parking, Pit Puzzle G+l-1, Puzzle Parking G+1, Puzzle Parking G-l, Stack Parking and Turn table Parking, alongwith the respective technical specifications are provided. In respect of the Rotary Parking', specifications relating to parking capacity, system dimensions, Gear Motor, Speed, Motor control, Electrical Power Source, Safety devices, 'etc., have been provided. Perusal of the design/drawing of the Foundation work to be carried out prior to installation of the rotary parking system, suggests that a specialized foundation as per the requirement is required to be created along with the steel structure which is a basic frame work of the parking system. DISCUSSION AND ANALYSIS 5.1 We have carefully considered all the material available on record, the applicable statutory provisions, various ....
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....Property Service' of the commercial premises owned by him, and that the appellant is proposing to install a 'Rotary Car Parking System', within the premises owned by him, but not within the building. We also observe that the provisioning of parking facility is for the tenants of the commercial building as well as the customers of those tenants. 5.5 To begin with, the relevant provisions of Section 17 (5) of the CGST Act, 2017 that impacts the issue in the instant case, is reproduced below for facilitation, - "(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;- (a) motor vehicles-------- (b) ---------------------- (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 ....
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....tion of this activity for placing the Apparatus or Equipment or Machinery, and that the ITC is not blocked even if the said activity falls under Works Contract Service. While taking up the three items referred above for discussion relating to the rotary parking system, we observe that an 'equipment' is to be effectively ruled out, as it refers to just articles or implements for a specific purpose of activity. Likewise, the term 'Machinery' refers to just a mechanical device or a gadget aimed at achieving a definite or specific result. An 'Apparatus' of course talks about 'a machine or device consisting affixed or movable parts that work together to perform some function.' Here again, it talks about one particular machine or device that performs a function along with fixed or movable parts. 5.8 On the contrary, a 'Rotary Parking System', as the name suggests, is a system in its own right, much more than an equipment, machinery or an apparatus, as it involves the functionality of various items like machines, equipments, motors, frame assembly, pallets, electrical panels, Hydraulic power packs, Operator boxes to floor/walls/columns and other electrical and electronic support system, ....
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....t beneficial enjoyment of that to which it is attached. 5.10 Normally, when an immovable property is leased/rented out, especially in a commercial/residential complex, the aspect of 'common area' for general use by the tenants, gets attached to it by default. As per the Wikipedia website', a common area is the "area which is available for use by more than one person. The common areas are those that are available for common use by all tenants, (or) groups of tenants and their invitees." And, more specifically, as per Section 2(n) of the Real Estate (Regulation and Development) Act, 2016 (RERA), (n) "common areas" mean- (i) the entire land for the real estate project or where the project is developed in phases and registration under this Act is sought for a phase, the entire land for that phase; (ii) the stair cases, lifts, staircase and lift lobbies, fire escapes, and common entrances and exits of buildings; (iii) the common basements, terraces, parks, play areas, open parking areas and common storage spaces; (iv) the premises for the lodging of persons employed for the management of the property including accommodation for watch and ward staffs or for the lodging of comm....
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.... is not supplied as such as a whole, and the constituent parts of the Car parking system, viz., Gauge Plate, Bolts, Hex nuts, Frame Assembly, and Pallet with Electricals have been supplied in three lots under three invoices dated 19.09.2023, 12.12.2023 and 15.12.2023. Perusal of the quotation dated 09.05.2023 reveals that the quotation is for 'supply, installation, testing and commissioning of Rotary Parking - SM18XL system'. The quotation also specifies the 'Customer Scope of Work' which involves completing the civil foundation and structural work as per the foundation drawings provided by Park Layer by the appellant (the customer). The customer scope of work, inter-alia involves the other work as given below:- * Any violations from the furnished drawings would be intimated and corrections to be made accordingly. * Provide erection support by way of obtaining required approvals, permissions and other local body issues. To arrange for all statutory permissions/Approvals from Government or any other relevant authorities pertaining to installation/inspection/certification of these equipment. * To provide the material and assistance at site required for placing / fixing of equip....
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.... Court of India involving Indian Oil Corporation and Municipal Corporation of Greater Bombay, to that of the Car Parking system, as the parameters for installation of petrol tank are entirely different and the attempt to draw parallel between the two contrast situations would be a futile exercise. On perusal of the ruling of the AAR, we come to know that the AAR had actually attempted to apply the 'permanency test', discussed therein which is crucial to the instant case. Accordingly, it is to be understood here that irrespective of the comparison between the goods involved, it is the ratio of the 'permanency test' as pronounced by the Hon'ble Supreme Court, which needs to be considered. For the purposes of clarity on the issue, the operative portion of the judgment dated 27.11.1990 is reproduced below:- "The tanks, though, are resting on earth on their own weight without being fixed with nuts and bolts, they have permanently been erected without being shifted from place to place. Permanency is the test. The chattel whether is movable to another place of use in the same position or liable to be dismantled and re-erected at the later place? If the answer is yes to the former it mus....
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....ess, recreation or any other activity parking spaces and parking facilities shall be provided within the site to the satisfaction of the competent authority and conforming to standards prescribed in the Annexure-IV." Further, specific provisions have been provided for automated/ mechanically operated parking under Part-Ill of Annexure-IV as referred above, which reads as, "For automated/mechanically operated parking, the Executive authority notwithstanding anything containing in the rules subject to such conditions as may be decided by the executive authority may permit parking lots/ structures tacking into account the safety and environmental aspects." Hence, for the purposes of installation of rotary car parking system, it is felt that approval of the competent executive authority is now mandatory based on the floor area index of the building. Therefore the claim of the appellant in this regard that they have not obtained any approval so far, does not absolve them of the requirements to be complied with, which is statutory. 5.18 The appellant has claimed that the supply of rotary car parking system involves two vital activities, viz., the goods falling under HSN : 8428 90 90....
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.... or furtherance of business. 5.20 The appellant has further claimed that this would result in increased contribution to the exchequer, in the form of taxes payable on (i) the enhanced rent receivable from the tenants, and (ii) from the consideration receivable separately towards the parking services provided to the customers of the tenants; that especially under the second category, the provision of service is solely dependent on the Rotary parking system and installation thereof. In this regard, it is to be stated that the admissibility or otherwise of the ITC involved on goods and services received, is not based on the enhanced rent receivable or enhanced taxes payable by the taxpayer, and that the same is determined under the provisions of Sections 16 and 17 of the CGST Act, 2017. As regards the second category of appellant's claim relating to parking services provided to the customers of the tenants, the fact that the parking system is installed within the premises of the appellant goes to prove the point that the facility provided is primarily for the use of tenants which is admitted by the appellant themselves. Even in rare situations, when the facility is extended to the cu....