TMI Blog2020 (6) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate) - all the supplies of other parts are out of the purview of machinery or equipment for units under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate). Supply of Pouch Filling Machine with online pouch coding machine of Make-Domino - HELD THAT:- To be eligible under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate), the said supply must be a Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- (f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages . Therefore the said supply of Pouch Filling Machine has to pass following tests to be eligible for inclusion under Entry No. (v)(f) of Sr. No. 3 of the table under Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Part - B: Electro-mechanical work - This comprises of design, supply, installation and commissioning of equipments including dairy plant, utility/services, lab equipments, ETP (electromechanical works) etc. on turn-key basis. 2. The applicant submitted that the dairy plant will be processing raw milk obtained from the farmers and producing pasteurised milk as well as milk products there from. The raw milk procured by the Dairy will be regarded as agricultural produce and hence the said Dairy shall be covered as a unit processing agricultural produce . The applicant has put the following question for advance ruling in their application:- Does the Notification No. 20/2017-Central Tax (Rate) New Delhi, the 22nd August, 2017 that covers the Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to mechanised food grains handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages , cover works contract for units processing milk (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay of construction, erection, commissioning, or installation of original works. (c) Such work should pertain to mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages. 6. The applicant further contended that for the present contract they fulfil all the above referred conditions on the following grounds: (a) There should be composite supply of works contract. -The contract is indeed a composite supply of works contract and hence the said condition is duly fulfilled. Works Contract is defined under clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, as under: [(119) works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;] -Both the parts of the contract (i.e. Part - A and Part - B) shall fall within the ambit of works contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that what emerges out of the activity carried out by the applicant is a dairy plant which is immovable in nature and hence the same cannot be moved without first dismantling it. The dairy plant so commissioned by the applicant is never intended to be shifted to any other location. Moreover it can even not be shifted without dismantling the same and hence the same satisfies the test of permanency . Thus the dairy plant shall tantamount to immovable property. The dairy plant commissioned at site is incapable of being sold as it is and hence partakes the character of immovable property. The Apex Court decision in the case of M/s Sirpur Paper Mills Ltd.[(1998) 97 ELT 3] = 1997 (12) TMI 109 - SUPREME COURT shall not be applicable to the present facts since in that case the whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency. In the present case the whole purpose is to commission a dairy plant at the site of the recipient and hence the same has to be considered as an immovable property. Therefore, it is contended that the design, supply, installation and commissioning of the dairy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts including packaged milk as well as other ancillary food products . -The Milk is a produce arising out of rearing of life form of animals for food, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. The input for the Dairy, in the form of raw-milk obtained by farmers, is out of rearing of animals and the same is clearly for food. In absence of any further processing on the same the said raw milk is clearly an agricultural produce. -Said condition also requires that the processing which is to be carried out by the unit should result in food stuff. In common parlance 'food' is something that is eaten. In a wider sense 'food' may include not only solid substances but also a drink. Still the fact remains that whether a solid or a liquid, the substance called 'food' should possess the quality to maintain life and its growth; it must have nutritive or nourishing value so as to enable the growth, repair or maintenance of the body, as held by the Apex Court in the case of M/s Harri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to applicability of notification no. 20/2017-Central Tax (Rate) dated 22.08.2017, which amends notification no. 11/2017-Central Tax (Rate) dated 28.06.2017, issued under the Central Goods and Services Tax Act, 2017 (herein after referred to as the CGST Act ), in the case of the applicant. As per work order issued by M/s Bihar State Milk Cooperative Federation Ltd., Patna, vide no. COMFED: EGG:317:Vol-VIII/1787 dated 09.05.2018, the applicant has been awarded a contract for construction, supply, installation and commissioning of a Dairy Plant at Purnea, under Kosi Dairy Project on turn-key basis. The said work is divided into two parts viz. Civil work for ₹ 10.71 crore and Electro-mechanical work for ₹ 14.69 crore. The Electro-mechanical work is again divided into two parts viz. Supply part for ₹ 13.51 crore and Installation part for ₹ 1.18 crore. 11. It is observed that Civil work comprises of civil construction of Dairy plant building, service block, processing, administrative block, workers amenities, godown, time keeping office, boundary wall, roads, water tank, E.T.P. (only civil work) water supply/sanitary plumbing, hard park, internal/external e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of original works pertaining to,- (f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages . Therefore the said supply of Pouch Filling Machine has to pass following tests to be eligible for inclusion under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate):- (a) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017; (b) Supply by way of construction, erection, commissioning, or installation of original works; and (c) Supply pertaining to mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages . 14. We discuss the issue point-wise as under:- (a) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017. 14.1 Composite supply is defined under clause (30) of Section 2 of the Central Goods and Services Tax Act, 2017, as under: [(30) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will already be in existence before supply. This said item does not come into existence by virtue of any work to be defined as works contract. The said items will not be manufactured at site but it will be supplied from a manufacturer whose brand is also affixed on the product, namely DOMINO . The Apex Court, in the case of M/s Sirpur Paper Mills Ltd. [1998 (97) ELT 3 (SC)] = 1997 (12) TMI 109 - SUPREME COURT , has held that just because a plant and machinery are fixed in the earth for better functioning, it does not automatically become an immovable property. 14.5 In view of the above we find that the above said supply of Pouch Filling Machine with online pouch coding machine of Make-Domino, is not an immovable property and hence supply of the same cannot be termed as supply of works contract . (b) Supply by way of construction, erection, commissioning, or installation of original works. 14.6 We find that the above discussed goods namely Pouch Filling Machine with online pouch coding machine of Make-Domino , is already in existence before supply and there is no construction at site to bring up a new original item in existence. (c) Supply pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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