TMI Blog2016 (5) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... n no manner said to be an activity which is covered under Notification dated 8 March 2000. The fabricated structural glazings prepared by the Applicant are transported to the site by the Applicant and affixed on the exterior portion of the building, which building is constructed by the building contractor who is a third party. There is no dispute that Applicant is not a building contractor, in that, it is not in the business of construction and erection of buildings. The activity of affixing glass and erecting glass walls with aluminium frame work requires an altogether different expertise, and is ordinarily sub-contracted by the building contractor. The contention that some of the walls in the building are not required to be constructed by laying bricks and they are substituted by affixing the glass would not carry the case of the Applicant further. We are also unable to accept the contention that the work of the Applicant would be covered under the term “incidental or ancillary activity to the construction of the building” as that would have to have a direct nexus to the construction of the building itself. Therefore, the alternative argument that the contract would get co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph A of the Notification dated 8 March 2000 issued for the purposes of section 6A (1) of the Works Contract Act. 3. It is the case of the Applicant that it is a registered dealer under the Works Contract Act as well as under the Bombay Sales Tax Act. The Reference Application was filed pursuant to the order dated 9 July 2010 passed by the Tribunal in the Applicant's own case in Second Appeal No.106 of 2007 under the Works Contract Act in respect of the period 01.04.1999 to 31.03.2000 in terms of which, the Tribunal held that the contract for construction of glass walls was not construction of building contract or incidental or ancillary contract to the contract for construction of building, and that consequently the Applicant was not entitled to composite/concessional rate of tax under the Notification dated 8 March 2000. The Appeal arose out of assessment proceedings under the Bombay Sales Tax Act and the transaction in question was under the Works Contract Act. 4. The Applicant is a Private Limited Company incorporated under the Companies Act, 1956. It is also a registered dealer under the MVAT Act. The Applicant is engaged in activity of fixation of glass walls. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in April 2013 and a demand of ₹ 14.17 crore (which includes penalty and interest) was made on the Applicant against which the Applicant has paid a sum of ₹ 10.21 crore and a stay was granted to recovery. 6. We have heard learned Senior Counsel for the Applicant and the learned Special Counsel for the Respondent/State. 7. Learned Senior Counsel for the Applicant submitted that the contracts entered into by the Applicant are essentially contracts for building and the Applicant would be covered by the composition scheme at the rate applicable to construction contracts in terms of the Notification issued by the Government under the Works Contract Act dated 8 March 2000 wherein building contract has been specifically included. It is submitted that apart from brick walls, glass walls are erected in the entire building. Learned Senior Counsel contended that aluminum glazing contract is nothing but a construction contract of a building and would therefore qualify as 'construction contract' made for 'building' liable to composition rate at the relevant time i.e. 2%. He submitted that with the passage of time and because of new inventions and adoption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or thin stone. The framing is attached to the building structure and does not carry the floor or roof loads of the building. The wind and gravity loads of the certain wall are transferred to the building structure,typically at the floor line Building Envelope Design Guide- Curtain Walls by Nik Vigener, PE and Mark A. Brown, Revised by the Chairs of the Building Enclosure Councils with assistance from Richard Keleher and Rob Kistler. The Facade Group, LLC.Development and review supported through a grant from the American Architectural Manufacturers Association.. The term curtain wall is defined in most literature to be any building wall of any material that is designed to resist lateral loads due to wind or earthquake and its own self weight. In other words, the curtain wall is a non-load-bearing wall Glass and Metal Curtain Walls, Best Practice Curtain Walls, Public Works of Government Services Canada. The American Architectural Manufacturers Association, the most widely referenced industry source with respect to metal walls, provides the following definitions in their Aluminum Curtain Wall Design Guide Manual: Metal Curtain Wall- An exterior curtain wall which may con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and has to be construed in its ordinary grammatical sense. She has placed reliance on the following judgments: (i) Ghansyamdas vs. Deviprasad Anr, AIR 1966 SC 1998 (ii) Mohammad Umar Anr. vs. Fayazoddin, AIR 1924 Lah. 172. 11. We have considered the rival contentions and perused the material on record. At the outset, it would be necessary to reproduce the extract of the Notification dated 8 March 2000. It reads as under: Notification No.WCA-25.00/C.R.-39/Taxation-1 dated the 8 th March, 2000. In exercise of the powers conferred by sub-section (1) of Section 6A of the Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contracts (Re-enacted) Act, 1989 (Mah.XXXVI of 1989), the Government of Maharashtra hereby notifies the following contracts to be the construction contracts for the purpose of sub-section (1) of the said section 6A, namely:- A. Contracts for construction of,- (1) Building, (2) Roads, (3) Runways, (4) Bridges, Flyover bridges, Railway overbridges, (5) Dams, (6) Tunnels, (7) Canals, (8) Barrages, (9) diversions, (10) Rail tracks, (11) Causeways, Subways, Spillways, (12) Water supply sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m cladding, doors and windows and doors of buildings in Corporate Offices. 13. We have perused the Additional Paperbook Compilation produced by the Applicant, to which are annexed what is stated to be the contract with ICICI and contract with Wakhardt. It cannot be disputed that the essential raw materials like glass and aluminum for the work of structural glazing are procured by the Appellant from third parties. In one of the letters at page No.143 of the Compilation it is stated that the procurement of glass, double sided tapes and structural silicone sealants will also be undertaken overseas . In the said letter it is further stated that the period for completion of glazing is dependent on factors such as: (i) your decision on the glass, (ii) your schedule for civil work and period for handing over the building to us for receiving the glazing. For the best performance of the unutilised curtain wall system it is imperative that civil jobs such as RCC, flooring, ceiling and all wetwork of cement or POP should be completed prior to the fixing of the curtain wall so as not to damage the curtain wall system . It is further stated in the said letter that we confirm that it will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Contractor. Double glazing by unitised system will be factory made and sealed properly. The fixing will be done with imported structural silicon sealant and guarantee the proper bond and water tightness. Contractor will clearly state in his tender letter the detailed methodology to be adopted for procurement, fabrication and erection of structural glazing. 11. The Contract will be awarded jointly to Indian contractor and foreign collaborator. The design and system, procurement of aluminium sections and glazing, method of fixing, water tightness completing the work in time and in line and level will be guaranteed by the foreign collaborator. In case of failure/partial failure by Indian contractor the balance work will be completed by the foreign collaborator in stipulated time. The Indian contractor and foreign collaborator will jointly furnish performance guarantee for 5% of the contract amount by approved bank guarantee. 12. The proposal elevation treatment shows aluminum frame work with glazing/patented aluminum panels/polished granite panels 25mm to 32mm thick with proper fixing/bonding arrangements in an approved design and pattern. 13. Contractor will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wder coated aluminium sections into a frame on which glazed panels are bounded. These structures are then erected onto the building. 17. The fabricated structural glazings prepared by the Applicant are transported to the site by the Applicant and affixed on the exterior portion of the building, which building is constructed by the building contractor who is a third party. There is no dispute that Applicant is not a building contractor, in that, it is not in the business of construction and erection of buildings. The activity of affixing glass and erecting glass walls with aluminium frame work requires an altogether different expertise, and is ordinarily sub-contracted by the building contractor. The contention that some of the walls in the building are not required to be constructed by laying bricks and they are substituted by affixing the glass would not carry the case of the Applicant further. We are also unable to accept the contention that the work of the Applicant would be covered under the term incidental or ancillary activity to the construction of the building as that would have to have a direct nexus to the construction of the building itself. Therefore, the altern ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
