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TMI Blog2022 (1) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... on 103(1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a). On the applicant who had sought it in respect of any matter referred to in subsection (2) of Section 97 for advance ruling; (b). On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a supply 3. The Original Authority has ruled as follows: The applicant is not entitled to avail and utilize ITC of GST charged by IPL as the same is restricted under Section 17(5)(d) of the CGST/TNGST Act 2017, if such transaction is considered to be a supply 4.1 Aggrieved by the above decision, the Appellant has filed the present appeal. The appellant has contended that for credit to be restricted in terms of Section 17(5)(d), the following conditions need to be cumulatively satisfied:- (i) Goods/ services should be received 'for construction' of immovable property; and (ii) The immovable property should not qualify as 'plant and machinery' They have contended that the afore-stated conditions are not fulfilled in the present facts and therefore the restriction in terms of Section 17(5)(d) of the CGST Act is not applicable in the present case. 4.2 It is stated that, * the service provided by IPL to them, viz. agreeing to part with the leasehold rights on the land, is not used for any construction activity per se. These services are not availed by them for creating/ constructing any land, building or civil structure or any other immovable or movable prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved in the present ease, the Impugned Order is based on a misinterpretation of both facts and law and is liable to he set aside. 4.4 The Appellant has further submitted that assuming without admitting that the services provided by IPL are used for a construction activity the construction does not result in any immovable property as the ASP is clearly a movable property. ASP which is being set-up will not be permanently embedded to earth in as much as it can be shifted to another site as per the requirements. The Technical drawings of the ASP duly corroborates that it is movable in nature. In view of this, ASP qualifies as a movable property and the restriction under Section 17(5)(d) of the CGST Act which is applicable only in case of construction of immovable property does not apply to the present facts. ASP proposed to be set up by them qualifies as 'plant and machinery'. Accordingly, services availed for setting up of the plant and machinery' should fall outside' the' ambit of the exclusion under Section 17(5)(d) of the CGST Act. In terms of the explanation to Section 17 of the CGST Act, 'plant and machinery' has been specifically defined as any e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 'plant and machinery', it is submitted that the Impugned Order is devoid of any merits and is liable to be set aside. They have further stated that the ASP qualifies as 'plant and machinery', and the same is also not covered by the exclusions under the definition of 'plant and machinery', GST chargeable, on transfer of leasehold rights is rightly admissible to the Appellant as Input Tax Credit. Section 16(1) of CGST Act enables the registered person to take ITC on input tax charged on any supply of goods or services or both which are used or intended to be used in the course or furtherance of business (which legal position and factual position are not disputed in the subject order). The Impugned Order acknowledges the fact that the services are used for setting up of an ASP which will be used for generation of gases by the Appellant and hence is clearly in the course or furtherance of their business. Further, since the restriction related to land under Section 17(5) of the Act cannot be invoked in the facts of this case, the Impugned Order in question passed by the LA is not legally tenable. PERSONAL HRARING: 5. The appellant was granted personal hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices received from IPL is towards facilitating the lease of land in appellants' favour wherein the ASP and other utilities of a complete manufacturing plant is put up; the 'land' leased is not a 'Plant and Machinery' because of the explicit, specific exclusion provided in the GST law in the explanation to 'Plant and Machinery' and as land stands excluded from 'Plant and machinery', the services availed and utilised for acquiring such land on lease is restricted under Section 17(5)(d) of the GST Act 2017. 7. The contention of the appellant is that the restriction under Section 17(5)(d) applies only to goods and services used for construction of an immovable property. In the case at hand, there is no construction of any immovable property; construction if any results in a movable property which is the ASP and in any event, ASP qualifies as a 'Plant and Machinery' and the exclusion of land from the definition of 'plant and machinery' will apply only in a situation where services are received for any construction activity/ development of land. Therefore, the restriction in respect of goods or services received for construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory premises. 'Immovable Property' as per the General Clauses Act, is defined as,- "Immovable 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" On a co-joint reading of the above, the following are deduced:- * Explanation of 'Construction' is an inclusive one and encompasses renovation, repair, addition, etc to the extent of capitalisation to the said immovable property * 'Immovable Property' is also an inclusive definition, which encompasses,- * land', * benefits to arrive out of land * things permanently fastened to anything attached to the earth * Credit of tax paid on Goods or services received for construction of an immovable property is restricted with the exception of 'Plant or Machinery'. The word used is 'for' and not 'in'. * 'Plant and Machinery' includes foundation and structural support but excludes 'Land'. Thus, this entry restricts credit of tax paid on goods or services received for construction of an immovable property which includes benefits to arrive out of land and also thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is used with the verb the purpose stands restricted. The appellants' interpretation is that for construction' is to be read as 'for the purpose of construction' and only those services which have a direct nexus to 'construction' such as works contract, services of engineer/contractor, services of architect or interior decorators etc., are covered under this phrase. In this connection, the appellant has relied on the decisions of the Apex Court. When the statute expresses clearly, the same is to be interpreted as per the words of the statute. Further, Hon'ble Supreme Court, in the case of Oblum Electrical Industries Private Limited v. Collector of Customs 1997 (94) E.L.T. 449 has contrasted the two expressions 'in' and 'for', to hold that the expression "for" was much larger in ambit than the expression "in". The relevant observations of the Supreme Court in this case are as under : "The wordings in the notification have to be construed keeping in view the said object and purpose of the exemption. In the notification two different expressions have been used namely, `materials required to be imported for the purpose of manufacture of prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants' favour, the appellant cannot get the leasehold on the land and cannot construct the manufacturing plant. Further, the amount paid to IPL for service of agreeing to withdraw the leasehold right to use the land is an integral part of the cost of the ASP. It has been stated by the appellant that the amount paid to IPL for grant of leasehold right in their favour stands capitalised along with the ASP in their books. Therefore it is clear that the service received from IPL is a service received 'for construction'. 9.4 The next issue to be seen is whether the manufacturing facility, the ASP is an immovable property or a movable 'plant and machinery', for the construction of which the impugned services are used. The appellant has stated that the ASP is a Movable property in as much as it can be moved as such and setup in any place and is a 'Plant and machinery'. The words "Plant" and "Machinery" have not been defined separately under the GST Acts. The Act gives the explanation of 'Plant and Machinery'. as 'Any equipment, apparatus or machinery fixed to earth by foundation / structural support and includes the foundation and such struct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of its production. Hence, the contention that these machines should be treated as movables cannot be accepted." Applying the ratio, to the case at hand, we find that the appellant has taken on lease the land from SIPCOT for a period of 72 years with the intention to put up the manufacturing facility in the said place for generation of various Industrial grade gas and it is not a temporary facility. Hence we hold that the 'ASP' set up by the appellant is not a 'movable property' as claimed by the appellant but is an immovable property'. 9.5 The final issue to be seen is that whether the entire manufacturing plant is to be construed as a 'Plant and machinery' . As discussed in para supra, the Act do not define the terms 'Plant', 'Machinery', though the provision under Section 17(3) (d) says,- 'goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery)' The Explanation gives what is 'Plant and Machinery' and has a means, inclusive and exclusive limbs. The means limb mentions 'apparatus, equipment, and machinery fixed to earth by foundation or st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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