TaxTMI 
TaxTMI 
2026 (5) TMI 907
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....inuous Catenary Vulcanization Tower ('CCV Tower'). (iii) CCV Cable unit, and (iv) a High-tension/Low-tension unit which will house heavy duty machinery, including extruders, take-up-reels, vulcanization tubes and chambers and other specialized equipment essential for the manufacturing and testing of high-quality, insulated electrical cables. 3. The CCV tower is a vertical steel structure specially designed to suit the technical elevation needed for the machinery and equipment utilized in the vulcanization process and these machines are to be necessarily installed at a catenary angle (a natural hanging curve) with strict dimensional tolerances which is essential during the vulcanization process for applying and distributing uniform heat and pressure to cross-link the polymer molecules on receiving the conductors from the Conductor Manufacturing unit. In the CCV towers, the cross-linking is conducted in extruders hung at a catenary angle by injecting nitrogen or steam/inert atmospheres at pressures upto 12 bar and temperatures between 250 degrees centigrade and 400 degrees centigrade. On successful cross-linking, the take up reels at the end of the line collect t....
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....ductor drum in the payoff stands when it becomes empty and replaces it with a drum filled with conductor without stopping the operations. The accumulator holds a small amount of conductor, keeps the tension steady, and allows the line to run continuously without any breaks or jerks in the process. This helps ensure that the extrusion and vulcanization of the cable are more even and efficient. Level-2 (+10.500m) CCV conductor guiding system The conductor exits the accumulator at level 1, then travels upward through level 2, and finally reaches levels 3 or 4, where it enters the extruder for the insulation process. This upward movement allows the conductor to gain the height needed for proper tension and alignment before extrusion begins. Levels-3 & 4 (+16.500m and +25.200m): Caterpillar, extruders. These are the main areas wherein the essential activity of vulcanization is carried out. This section houses the extruders where insulation material is applied to the conductor. There are 3 extruders arranged in sequence, each responsible for layering and processing the insulation uniformly around the conductor. From this level, the catenary tube begins and extends towar....
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....and machinery". Hence, ITC of such GST is not blocked in terms of Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017. 7. The applicant has put forward the following question for Advance Ruling: Whether the applicant is eligible to avail input tax credit on inputs and input services used in the setting up of the continuous catenary vulcanization tower at the factory of the applicant for the manufacture of insulated cables, and not restricted in terms of Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017? 8. Applicant's interpretation of law is as under: • Applicant's question is covered under Section 97(d) of the CGST Act, 2017. • Section 16(1) of the CGST Act entitles a taxpayer to avail credit of input tax charged on any supply of goods and/or services made to him and used by him in furtherance of his business subject to certain restrictions and conditions as specified in Section 16(2) and Section 17(5) of the CGST Act. Section 17(5) of the CGST Act stipulates the situation wherein ITC shall not be available, notwithstanding anything contained in Section 16(1) of the said Act. In terms of Section 17(5)(c) and 17(5)(d) of the CGST Act, ITC....
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....ge of a typical CCV line having multiple vertical levels for machinery involved in cable extrusion, curing, a long tubular section at a catenary angle (vulcanizing tube). There are pay-offs (where conductor wires come from reels), extruders/crossheads (to extrude insulation & semiconducting layers), and downstream cooling/tension/take-up machinery. • In order to gauge the significance of the vertical CCV tower as structural support to the equipment engaged in the production of high voltage insulated electrical cables, the following points should be noted: • A specific height is required for the long continuous path for the vulcanization process. The cables need a long run for curing tube, cooling etc. A vertical/higher structure provides space, allowing long lengths of cable to sag in a controlled manner (catenary angle) and move under tension without excessive bending. • The "catenary" vulcanization method uses the natural gravity of the earth to sag the cable under tension to help ensure uniform tension, avoid deformations or marks, and maintain insulation quality. The vertical tower, with its machines placed at different levels, allows the ....
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.... of the cables. The technical brochure provided by the Equipment Manufacturer of the CCV machinery also supports this understanding by providing guidance on the specific manner in which the CCV tower is to be set up. Thus, CCV tower is an essential structural support to the entire CCV machine line, which is squarely covered within the definition of 'plant and machinery' under Section 17(5). • Reliance is placed on the ruling of the Hon'ble Gujarat Appellate Authority of Advance Ruling in M/s. KEI Industries ltd. [2025(8) TMI 551] wherein it was held that the appellant was eligible to avail ITC on the inputs and input services used for the construction of a concrete tower to support and erect the vertical continuous vulcanization (VCV) lines. Any contrary finding would be inconsistent as the higher authority has already ruled favourably in such facts involving the same EPC vendor i.e. Suraj Buildcon Private Limited. • Reliance is placed on the Circular No. 219/13/2024-GST dated 26.06.2024 wherein the CBIC provided clarification on the availability of ITC on ducts and manholes used in a network of optical fiber cables (OFCs) in terms of Section 17(5) of the ....
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....a Rao [(2000) 243 ITR 81]. 2. IRC vs. Barclay Curle & Co. Ltd. ((1969) 1 WLR 675]. 3. CIT vs. Victory Aqua Farm Ltd. 92016) 16 SCC 553]. 4. Cookc vs. Beach Station Caravans (1974 1 WLR 1398). 5. Anchor International Ltd. vs. CIR [(2004) Scot CS 281]. • The applicant also submits that the Hon'ble Supreme Court in Bharti Airtel ltd. Vs. Commissioner of Central Excise [(2024) 132 GSTR 404] in determining the claim of Cenvat Credit in the context of telecommunication towers, applied the functionality test (para 11.9.7) to hold that the attachment of tower to the earth/building is not for the benefit of the land or building but for better functioning of the antenna which is fixed on the tower. It was also held that without the tower, the antenna cannot effectively function as the tower hoists the antenna at the requisite height, hence, the tower is to be considered as an 'accessory' of the antenna. Hence, the vertical CCV towers is specifically designed to assist the vulcanization machines and provides structural support to their operation. Therefore, it may be considered as 'plant and machinery.' • Applicant has also placed ....
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....for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 11. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made both oral and written during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submissions/views in respect of question on which the advance ruling is sought. We also considered the written submission provided by the Assistant Commissioner of the State Tax (1), Unit-74, Vapi dated 06/03/2026. 12. We find that the applicant is setting up a new factory at Vapi, Gujarat for the manufacturing of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables and conductors and at the new facility, the applicant will set up the production units which are integral to the manufacture of insulated electrical cables like a Conductor manufacturing unit, a continuous Catenary Vulcanization Tower ('CCV Tower'), CCV Cable unit, and a High-tension/Low-tension unit which will house heavy d....
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....o avail input tax credit on inputs and input services used in the setting up of the continuous catenary vulcanization tower at the factory of the applicant for the manufacture of insulated cables, and not restricted in terms of Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017? 15. Before referring to the averments raised by the applicant, we find it prudent to refer to the process undertaken at different levels in the CCV tower for manufacturing of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables as submitted by the applicant. The key machines and their functions on each level of the CCV tower are as follows: CCV Tower Key Machines Functions Ground level (+ 0.300 mtrs.) Pay-off stands, cooling systems and associated equipment It houses the core and heavy machinery in the production process. The pay-off stands are used to feed the conductor reels into the cable-making line and are designed to unwind the cables in a controlled fashion so as to maintain consistent tension and prevent deformation or breakage of the conductors. The cooling systems and associated equipment (such as water troughs, closed-loop water chillers and forced air c....
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....trusion and vulcanization stages, ensuring smooth and uniform movement along the line. This setup ensures precise alignment, stable processing, and high-quality insulation of the final product. The areas also contain designated space for raw materials. Level-5 (+31.800m): RM and cleanroom area This section serves as the raw material area and cleanroom area, where insulation materials are kept and maintained under controlled conditions to ensure safety. From this level, the insulation material flows down through dedicated pipelines or chutes to levels 3 and 4, where it is fed directly into the extruders for application onto the conductors. In short, the applicant has upgraded their technology to manufacture high-voltage cross-linked polyethylene (XLPE) insulated electrical cables by using CCV process. For the same, the CCV manufacturing line is required to be supported by a steel structure. Thus, the primary issue is about the eligibility of ITC on inputs and input services used in the construction of vertical steel tower i.e. CCV tower. 16. The gist of the averments raised is that the contract for construction of CCV tower was awarded to M/s. Suraj Buildcon, which wa....
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....is a works contract or otherwise, in terms of section 17(5)(c) and (d), plant and machinery stand excluded from the apportionment of credit and blocked credits. Further, although "Structural support" has not been defined in the CGST Act, it is evident from the meanings given in renowned dictionaries such as Cambridge, Oxford and Merriam Webstar that 'structural support' refers to a physical or foundational element that forms part of a larger structure and serves the purpose of holding, bearing, or stabilizing loads which ensures that the structure or equipment it supports remains secure from external forces. Thus, the CCV tower provides structural support with the necessary height and infrastructure while maintaining the structural integrity, stability, precision and overall efficiency of the support system for manufacture of insulated cables and is thus an essential structural support to the entire CCV machine line in the manufacture of insulated cables. 19. On going through the layout of the CCV tower and the process undertaken at different levels in the CCV tower as detailed in para 15 above, we are in agreement with the applicant's averment that the CCV tower made of special....
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....eceived 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. 2. Explanation in section 17 of CGST Act provides that the expression "plant and machinery" means apparatus equipment 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 supports but excludes land building or any other civil structure' telecommunication towers and pipelines laid outside the factory premises. 3. Ducts and manholes are basic components for the optical fiber cable (OFC) network used in providing telecommunication services. The OFC network is generally laid with the use of PVC ducts/sheaths in which OFCs are housed and service/connectivity manholes which serve as nodes of the network and are necessary for not only laying of optical fiber cable but also their upkeep and maintenance. In view of the Explanation in section 17 of the CGST Act it appears that ducts and manholes are covered under the definition of 'plant and machine....