TMI Blog2022 (3) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... y against fixed Tariff. The words of the entry is clear and excludes the works supplied to Government entity, in respect of a Civil Structure or any other original works meant predominantly for commerce, industry or any other business or profession - there are no reason to disagree with the findings of the LA that the supply cannot be considered as that meant predominantly for use other than commerce, industry, or any other business or professional purposes. In the case at hand, it has been held by the LA that TANGEDCO is a Government Entity and therefore there is no difference in the clarification issued by the State Government and the stand held by the LA and the claim that the State Government cannot speak in two voice is void. Based on the clarification received from the Government to the status that TANGEDCO is a Government Entity, the Finance Director has addressed, the Chief Engineers others to take action to absorb the benefits of GST concessions to Government entity , which is their own interpretations and not clarification of the State Government and therefore, this contention fails. In the case at hand, the condition imposed for availing the concessional rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. The subject appeal is filed under Section 100(1) of the Tamilnadu Goods Services Tax Act 2017/Central Goods Services Tax Act 2017 (hereinafter referred to the Act ) by PSK Engineering Construction co. (hereinafter referred to as Appellant ). The appellant is registered under GST vide GSTIN 33AAGFP24B3EIZF. The appeal is filed against the Order No.08/ARA/2021 dated 25.03.2021 passed by the Tamilnadu State Authority for Advance ruling on the application for advance ruling filed by the appellant. 2. The Appellant has stated that they are engaged in construction activities including retro fitting, restoration etc. of civil structures predominantly for Government, Public Sector Undertakings and Government entities. They had filed an application before Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provided to the Central Government or State Government or Union Territory, a local authority, a Governmental authority or a Government entity. Supply must be by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession In the case of supplies to a Government Entity, there is a condition prescribed in proviso that the supplies should have been procured by the said Government entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be. The first two conditions have been complied and the same has been accepted by the Advance ruling authority themselves. Their submissions with respect to compliance of other two conditions mentioned in the notification are as under:- Condition 3 - Supply must be by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned ruling of the Advance Authority vide para 8 is not in accordance to the settled principle of law. The LA has misread the provisions of the law to mean that the said works procured are not in relation to works of generation and distribution of electricity which is the entrusted work on TANGEDCO and therefore the appellant, fails to satisfy the said condition. In this connection they rely on the decision of the Collector of Central Excise Vs Rajasthan State Chemical Works 1991 (55) E.L.T. 444 (S.C.), wherein the Honble Supreme Court has held that in or in relation to a manufacture has vide connotation, therefore relates with Manufacture of Goods is part of the Manufacturing process. Applying the same ratio this decision was followed in plethora of cases including availment of credit on capital goods as well as inputs the courts time and again repeatedly held that in or in relation to should give vide connotation and cannot be given narrow interpretation. The issue in hand is directly connected with the activity of generation and distribution of electricity i.e. for proper functioning of the said service without which the management of service cannot be done at any poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has been stating that all activities carried out for TANGEDCO is eligible for exemption, the Advance ruling authority which is a Government arm states that the said activity is not eligible for exemption tantamount to two voice by same Government which as per the aforesaid Supreme Court ruling is incorrect and deserves to be set aside. 5. Personal Hearing; The Appellant was granted personal hearing through Digital mode (Virtually) on the consent of the appellant, as required under law before this Appellate Authority on 28.01.2022. Shri. S. MuthuVenkataraman, Advocate the Authorised representative, appeared for the hearing virtually. He stated that the notification requires satisfying four conditions of which two conditions have been held to be satisfied. He stated that reference to the order of Kerala Appellate Authority for Advance Ruling is not valid as the ruling is specific to the applicant. The AR stated that as per Sec 61 of Electricity Act, the tariff is to be fixed considering the consumer interest and are to be reasonably fixed. He also referred to the explanation appended to the entry of the Notification and stated that the applicant is a Public Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order of Hon ble Supreme Court dated 23rd September 2021 issued in Suo Moto W.P. (C ) No. 3 of 2020 , owing to the prevailing pandemic situations, has stated that appeal is filed within the timeline for filing appeal. We find Hon ble Supreme Court vide Order dated 10.01.2022, has modified its Order dated 23rd September 2021 relied by the appellant and has held that the period from 15th March 2020 to 28th February 2022 would stand excluded for the purpose of Limitation in Mise. Appeal No. 21 of 2022 of Suo Moto W.P.(C) No. 3 of 2020. Therefore, the appeal is to be considered as filed within the timeline and admitted for consideration on merits. 8.1 From the submissions we find that the appellant provides works Contract services to TANGEDCO for carrying out retrofitting works and strengthening of the NPKRR Maaligai against seismic and wind effect and modification of elevation of NPKRR Maaligai in TNEB Headquarters complex, Chennai-2 as per the Tender Specifications(hereinafter referred to as Works ). They had sought clarification on the applicability of the concessional rate of GST as per entry No. 3(vi) of Notification no. 11/2017-C.T.(Rate) dated 28.06.2017 as amended f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ybe . 9.1 The appellant contends that they have satisfied the condition at (3) i.e., the supply was made for use other than for business or commerce, in as much as,- TANGEDCO is a public utility company operating without any commercial basis; works contract carried out was retrofitting work for strengthening the NPKRR Maaligai against seismic and wind effect and modification of elevation in TNEB headquarters building which is required for providing services of generation and transmission of electricity; TANGEDCO is a public authority as per the definition of public authority under RTI Act 2005; 9.2 We find that, NPKRR Maaligai on which the retrofitting work for strengthening against seismic and wind effect Modification of elevation undertaken houses the headquarters of TANGEDCO. TANGEDCO undertakes generation and distribution of electricity in the State of Tamilnadu. On the Generation front, they extend license to various applicants seeking permission for generation of electricity for a licence fee and as the distribution utility, undertakes sale of electricity to residential and commercial units after extending the necessary infrastructure (for charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply cannot be considered as that meant predominantly for use other than commerce, industry, or any other business or professional purposes. 10.1 The appellant has further contended that they have satisfied the conditions at (4) in as much as,- TANGEDCO being the subsidiary of TNEB, the sole Power supplier to the state of Tamil Nadu, is essentially performing the activity entrusted to it by the State; The phrase in or in relation to a manufacture as held by Hon ble Supreme Court has wide connotation and in the present case, the activity undertaken by them is also in relation to a work entrusted by Government; TANGEDCO vide letter CFC/GL/ACCTS/DFC/AO/TAX/EGST/D.No.22/ 2019 dated 25.04.2019 has clarified that the works contract service provided to TANGEDCO attracts lower rate in terms of aforesaid entry; TANGEDCO has sought for clarification from State Government vide letter no. Energy (B2) Dept Lr.No. 4155/B2/2018 dated 25.03.2019 while issuing the said clarification; Supreme Court in the case of Lloyd Electronics Engineering Limited Vs. State of Himachal Pradesh has held that State Government cannot speak in two voice 10.2 The factual Matrix of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the commencement of manufacture, are process in relation to manufacture, since they are integral to manufacture . In the present case, TANGEDCO is established with the primary object to function as Generation and Distribution Utility and the work undertaken by the appellant, i.e., retrofitting work for strengthening against seismic and wind effect Modification of elevation of NPKRR Maaligai, cannot be in any way said to be in relation to the said work entrusted to TANGEDCO by the State Government. It is worth mentioning that it is not the proportionality of the activity which determines whether an activity is in relation to the work entrusted but the implications of the legislative assessment of the term in relation to is more tilted towards nexus, inseparability and identity of the activities involved with the work entrusted and not merely on other parameters. It is also pertinent to mention that the Constitution Bench of the Hon ble Supreme Court in the case of Commissioner of Customs(Import) Mumbai Vs. M/s. Dilip Kumar And Co. others in C.A. No.3327 of 2007 [2018 (361) E.L.T. 577 (S.C.)], after a detailed analysis of various decision of the Apex Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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