9911796707
TMI Blog2016 (5) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... cations for Advance Ruling:- (a) AAR/44/ST/18/2013 with respect to Contract with Delhi Metro Rail Corporation ("DMRC") ("Application-1"): The said application -1 is with respect to contract with the DMRC dated 24.05.2013, which has been entered into between the parties for design, manufacture, testing, supply and commissioning of Rolling Stock for a lump sum price which is to be received by the applicant on a miles stone basis. Applicant is undertaking onshore integrated testing and commissioning of the train as per Cost Centre D of the Pricing Document. In terms of Clause 7.12 of the General Conditions of the Contract ("GCC"), applicant is required to undertake integrated testing and system commissioning of the works. "Integrated Testing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is common in both the applications and is as follows: Whether the applicant is eligible for claiming exemption from payment of Service Tax in terms of Notification No. 25/2012 dated 20.06.2012 for the activities in relation to Testing & Commissioning, Integrated Testing & Commissioning and Trial runs of Trains to be undertaken under the Contract? 3. Applicant inter-alia submits that as per two Contracts, they are required to undertake testing to ensure integration of the Rolling Stock to the metro systems and said activity clearly amounts of "commissioning" of the rolling stock on to the metro rail system; that each metro rail system has its own requirements with respect to the various stations, signaling, gauge measurement etc. and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the decision of Apex Court in CIT vs. Mir Mohammad Ali (1964) 7 SCR 846 on the definition of the word "machinery" from the Privy Council decision of Corporation of Calcutta vs. Chairman, Cossipore and Chitpore Municipality (1922) ILR 49 Cal 190, wherein the term "machinery" is defined as ; The word machinery when used in ordinary language prima facie means some mechanical contrivances which, by themselves or in combination with one or more other mechanical contrivances, by the combined movement and inter-dependent operation of their respective parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting so definite and specific a result. Further, applicant submits that the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced as under; 2. Definitions - For the purpose of this notification, unless the context otherwise requires,- (y) "original works" means as the meaning assigned to it in Rule 2A of the Service Tax (Determination of Value) Rules, 2006. 7. Rule 2A of the Service Tax (Determination of Value) Rules, 2006 defines "original works" as under:- Explanation 1- For the purpose of this rule- (a) "original works" means- (i) all new constructions (ii) all types of additions and alternations to abandoned or damaged. (iii) Erection, commissioning or installation of plant machinery or equipment or structures, whether prefabricated or otherwise; 8. The word "commissioning" has not been defined under the Finance Act, 1994. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stems or system with the works, equipment, sub-systems or system provided by others. 1.1.4.2 "Integrated Testing" in the contracts where applicable means the programme of tests performed by the Contractor at the direction of the Engineer following satisfactory completion of Contractor's tests on his equipment, sub-systems or system to verify and confirm the compatibility and compliant performance of his equipment/subsystem/ system with the equipment/sub-system/system provided by others. 1.1.6.12 "Works" means the work, both permanent and temporary, or services to be carried out, designed, manufactured, fabricated, delivered to Site, erected, installed, completed, tested, commissioned,(including Integrated Testing and Commissioning) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) pertaining to railways, including monorail or metro. 12. The word 'Commissioning' has not been defined under the Finance Act, 1994. Therefore, one has to refer to its dictionary meaning. As mentioned above, "commission" means to bring a machine, plant, equipment etc., into operation. Rolling Stocks are plant as well as machinery, as held by the Hon'ble Supreme Court in CIT vs. Mir Mohammad Ali (1964) 7 SCR 846 and CIT vs. Taj Mahal Hotel (1971) 3 SCC 550 respectively. Further, these Rolling Stocks are to be brought into operation by the applicant, which would fall under the meaning of word "commissioning". Further, the General Conditions of Contract/ Conditions of Contract mention that tests on completion shall include Integrated Test ..... X X X X Extracts X X X X X X X X Extracts X X X X
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