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2020 (6) TMI 704 - AAAR - GSTJob-Work - minor additions or not - other inputs,e.g. air, water etc., procured by the Appellant, i.e. JEL, which are essentially required for the generation of power - Circular No. 79/53/2018-GST dated 31.12.2018 - violation of principles of natural justice. Whether steam coal, proposed to be supplied to the Appellant i.e. JEL, constitutes one of the inputs for JSL, which manufactures the steel products? - HELD THAT:- We are inclined to revise our earlier opinion, where we had denied the eligibility of the coal as an input for JSL. Thus, in light of the above submissions, it is adequately clear that coal is an input for JSL, as the same is used for the generation of electricity, which in turn is used for the manufacture of the final product i.e. steel. On perusal of the Bombay High Court Judgment in the case of COMMISSIONER VERSUS INDORAMA TEXTILES LTD. [2010 (7) TMI 981 - SC ORDER], it is established that electricity can be generated on the Job work basis. It is further inferred that when electricity can be generated on job work basis, it is bound to happen that any inputs sent to the premises for the generation of electricity would not be sent back in the same original form. Instead, the same is destined to be consumed for the generation of electricity, which was actually the facts of the cited case law discussed herein above, wherein the Respondent i.e. lndorama Textiles Ltd. was vying to claim the input tax credit in respect of the furnace oil, which was getting consumed in the premises of their job worker. The Bombay High Court, in this case, decided in the favor of the Respondent, holding that the Respondent was justified in claiming input credit in respect of the furnace oil, being used at the job worker’s premises for the generation of electricity, which was the intermediate goods, being received by the Respondent, in that case the principal - By applying the above case law in the instant case, it is opined that coal, despite being consumed in the process of the generation of electricity, thereby becoming irretrievable, will not preclude the proposed arrangement from being the job work transaction, as understood by the Appellant. The principal will not be in position to independently bring back the inputs from the premises of the job worker, thereby not satisfying the conditions laid out in section 143 (1)(a) of the CGST Act, 2017 - the proposed arrangement under consideration is satisfying the condition laid down under section 143 (1) (a) of the CGST Act, 2017 in respect of bringing back of the inputs by the principal i.e. JSL from the job worker’s premises i.e. JEL, after the completion of the job work. Thus, the earlier observation in this regard is sought be revised. Accordingly, no GST will be leviable on this supply.
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