TMI Blog2021 (1) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... mmovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth . Whereas, Section 3(36) defines movable property as property of every description, except immovable property . So as per this definition, any property which does not qualify to be immovable property, is a movable property. This definition of immovable property under the General Clauses Act is affirmative in nature as against the definition contained in the Transfer of the property Act 1882, which is negative in nature. As per TPA, immovable property does not include standing timber, growing crops or grass. It further says that attached to the earth means: (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. As per the definition of immovable property contained in the General Clauses Act and the Transfer of Property Act, it is clear that things attached to the earth or permanently fastened to anything attached to the earth is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion is an immovable property. The applicant is not entitle to the credit of input tax in view of the provisions of Section 17(5)(d) of the CGST/ HGST Act, 2017. - HAR/HAAR/R/2019-20/02 - - - Dated:- 21-6-2020 - SANGEETA KARMAKAR AND MADHUBALA MEMBER Present for the Applicant : Sh. Ritesh Wahal (C.A) 1. Annexure I Question on which advance ruling is required: 1.1 Whether the Temporary Structure (i.e. hall or pandal or shamiana or any other place) built up with Iron/Steel Pillars tight up with Nuts and Bolts (as shown picture enclosed) specially created for functions would be treated as Movable or Immovable property in pursuance to the GST Law ? 1.2 Whether credit of the tax paid on Iron/Steel Pillars tight up with Nuts and Bolt used for the creation of Temporary Structure (i.e. hall or pandal or shamiana or any other place) especially for functions are admissible under section 16 of the CGST Act, 2017? 2. Annexure II Statement of relevant facts having a bearing on the question raised: 2.1 The Appellant is a company engaged in the business of organizing wedding other banquet functions on a large scale, from its premises at Ambie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for functions is movable or immovable property. However, Movable and Immovable property have nowhere defined under the Act. In this regard, it would be useful to refer the relevant statutory provisions to examine, what would constitute as moveable or immovable property. The expression moveable property has been defined in Section 3 (36) of General Clause Act, 1897 as under: Section 3 (36): movable property shall mean property of every description, except immovable property . 3.2 It is obvious that the answer to the question whether the said temporary structure (i.e. hall or pandal or shamiana or any other place) in question are movable property, would depend upon whether they are immovable property. That is because anything that is not immovable property is by its definition movable in nature. Section 3 of the Transfer of Property Act, 1882 does not spell out an exhaustive definition of the expression immovable property . It simply provides that unless there is something repugnant in the subject or context, 'immovable property' under the Transfer of Property Act, 1882 does not include standing timber, growing crops or grass. Section 3(26) of the General Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint advanced on behalf of the appellant, that whatever is embedded in earth must be treated as immovable property is basically not sound. For example, a factory owner or a householder may purchase a water pump and fix it on a cement base for operational efficiency and also for security. That will not make the water pump an item of immovable property. Some of the components of the water pump may even be assembled on site. That too will not make any difference to the principle. The test is whether the paper making machine can be sold in the market. The Tribunal has found as a fact that it can be sold. In view of that finding, we are unable to uphold the contention of the appellant that the machine must be treated as a part of the immovable property of the company. Just because a plant and machinery are fixed in the earth for better functioning, it does not automatically become an immovable property. 4.3 The Supreme Court after taking into consideration of judgment in Sirpur Paper Mills Lid. V. Collector of Central Excise Hyderabad (1998) 1 SSC 400 = 1997 (12) TMI 109 - SUPREME COURT and after taking into account the earlier view in the Triveni Engineering Indus Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of components and re-assembly as failing the permanency test. 20. Further, in the instant case, it is a common ground that a turbo alternator comes into existence only when a steam turbine and alternator with all their accessories are fixed at the site and only then it is known by a name different from the names of its components in the market. The Tribunal recorded the finding that fixing of steam turbine and the alternator is necessitated by the need to make them functionally effective to reduce vibration and to minimize disturbance to the coupling arrangements and other connections with the related equipments. It also noted that the removal of the machinery does not involve any dismantling of the turbine and alternator in the sense of pulling them down or taking them to pieces but only undoing the foundation bolts arrangement by which they are fixed to the platform and uncoupling of two units and, therefore, the turbo alternator did not answer the test of permanency laid down by his court in the case of Municipal Corporation of Generator Bombay (supra). In our view, the findings recorded do not justify the conclusion of the Tribunal in as much as on removal a turbo alter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prevent vibration/wobble free operation does not per se qualify its description as attached to the earth in any one of the three clauses (of Section 3 which defined attached to the earth ) extracted above. Clearly attachment of the towers to the foundation is not comparable or synonymous to trees and shrubs rooted in earth. It is also not equivalent to entrenching in the earth of the plant as in the case of walls and buildings, for the obvious reason that a building imbedded in the earth is permanent and cannot be detached without demolition. Imbedding of a wall in the earth is not comparable to attachment of a tower to a foundation meant only to provide stability to the plant especially because the attachment is not permanent and what is attached can be easily detached from the foundation. So also attachment of the tower to the foundation on which it rests would not fall in the third category (attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached), for an attachment to fall in that category it must be for permanent beneficial enjoyment of that to which the tower is attached. 4.8 A number of Apex Court judgments have been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a foundation is meant only to give stability to the structure and keep its operation vibration free. d) The setting up of the structure itself is not intended to be permanent at a given place. The structure can be moved and indeed moved after the repair project for which it is set up is completed. 5. Discussion: 5.1 Dealing with the contention of the applicant, it is important to discuss the relevant provision contain in the CGST/ HGST Act, 2017. Section 2 (52) defines goods as every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply . 5.2 Section 16 (a) of the Act provides for eligibility of Input Tax Credit. It reads as in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed . 5.3 Section 17 of the GST Act deals with Apportionment of credit and blocked credits. Section 17 (5) (d) reads as goods or services or both received by a taxable person for construction of an immo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imbedded for the permanent beneficial enjoyment of that to which it is attached, qualifies to be attached to the earth. In the case of applicant, it is an admitted fact that the structure (shamiana, pandal or tent) constructed/ erected by the applicant is fixed to the foundation by nuts and bolts. But the applicant holds that this affixation of pillars and pre-fabricated shelter to the earth is not permanent. So, in essence, the question which needs to be dealt with by this Authority is whether this affixation of the structure with the earth or pillar imbedded in the earth is permanent or temporary. The applicant has quoted some excerpts from the judgment of Hon'ble Supreme Court in Triveni Engineering and Industry Limited (2000) = 2000 (8) TMI 86 - SUPREME COURT case in support of its case. But it has ignored an important observation of the Apex Court in this case wherein it was observed that in order to determine whether an article is permanently fastened to anything attached to the earth, both the intention as well as the factum of fastening has to be ascertained from the facts and circumstances of each case. The English Law also attaches great significance to the degr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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