TMI Blog2022 (11) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ich involves Civil work, Civil engineering, Ground work, supply, Foundation work, Fabrication, various mechanical and electrical works etc. The magnitude of project covers a large area of about 40 thousand sq meter tailored specifically to fit the dimensions and orientation of the needs of the project. It is no one's case that these items will ever be removed from their position. Therefore, they qualify under clause (c) of Section 3 of the Transfer of Property Act, 1882. Thus, the project of setting up of Electric Loco Shed at Saiyedpur Bhitri, Uttar Pradesh, fulfills the conditions of it being an immovable property. Accordingly, we in affirmation with the Appellant that the said project of construction for Railways, on the basis of the scope of work as can be seen from the documents submitted by the Appellant, it is concluded that the said project are immovable in nature. This is a composite supply of works contract service - benefit of SI. No. 3(v)(a) of the Notification No. 11/2017-Central Tax (Rate), as amended vide Notification No. 20/2017-Central Tax (Rate) for the subject work is available. - UP/AAAR/02/2022 - - - Dated:- 15-7-2022 - SHRI S. KANNAN, AND SMT. MI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject works. 4. The Authority for Advance Ruling, vide Order UP ADGR 92/2022 dated 24.01.2022 has ruled that:- a. As regard to the question Whether the work awarded to the applicant is a composite supply of works contract service , the same is replied in negative. b. As regard to the question Whether the benefit of SI No. 3(v)(a) of the Notification No. 11/2017-Central Tax (Rate), as amended vide Notification No. 20/2017-Central Tax (Rate) is applicable to the subject works the same is also replied in negative. Grounds of appeal submitted by the Appellant:- 5). Aggrieved with the Order the Appellant filed an appeal against it on following grounds: 5.1) The Appellant has been awarded a contract by the JV of not only supplying of Plant and Machinery but also its installation and commissioning including Overhead Head Electrical works, in connection with setting up of Electric Loco Shed, including electrification work required to operationalise the plant as a whole. 5.2) The AAR failed to appreciate the fact that the items of plant and machinery supplied, installed and commissioned by the Appellant were of permanent nature and that the Indian Railways ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit of constructing the plant which are movable in nature but these items should not be considered in isolation as they are the part and parcel of the plant as a whole and are not intended to be moved outside the plant. 5.7) Even the Central Board of Indirect Taxes and Customs, vide Flyer No. 28, dated 1-1-2018 on Works Contract , has also envisaged a situation that supply, installation and commissioning of plant and machinery in certain circumstances can acquire a status of an immovable property. Further the Appellant also relied upon certain case laws to bolster their claim. 6) The Appellant was granted personal hearing on 13th July 2022. Sh. Uday Patwardhan, Company Secretary / Authorized representative, appeared in personal hearing on behalf of the appellant. During the course of personal hearing he submitted some photographs to vindicate his stand and reiterated the submission already made vide appeal application dated 14.04.2022. He has nothing more to add. DISCUSSION AND FINDING 7) We have gone through the submissions made by the Appellant and examined the detailed explanation submitted by them. We observe that as per the appellant the work performed by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each other; and (d) One of the supplies of goods or services is principal / predominant. 9). We observe that for classifying any contract under works contract the property involved in the same has to be of any immovable nature. Further, Immovable property has not been defined under the provisions of GST. However Immovable property stands defined under Section 3(26) of the General Clauses Act, 1897 to include land, benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached to the earth. Section 3 of the Transfer of Property Act, 1882 stipulates that unless there is something repugnant in the subject or context immovable property does not include standing timber, growing crops or grass. The Section however, defines the term attached to the earth to mean (a) rooted in the earth, as in the case of trees and shrubs, (b) embedded to earth, as in the case of walls or buildings and (c) attached to what is so embedded for permanent beneficial enjoyment of that to which it is attached. Thus the essential character of immovable property , as emerges from the above discussion, relevant to the present context is that it is attache ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of each case. Primarily, the Court will have to take into consideration the intention of the parties when it decided to embed the machinery whether such embedment was intended to be temporary or permanent. A careful perusal of the agreement of sale and the conveyance deed along with the attendant circumstances and taking into consideration the nature of machineries involved clearly shows that the machineries which have been embedded in the earth to constitute a fertiliser plant in the instant case, are definitely embedded permanently with a view to utilise the same as a fertiliser plant. The description of the machines as seen in the Schedule attached to the deed of conveyance also shows without any doubt that they were set up permanently in the land in question with a view to operate a fertilizer plant and the same was not embedded to dismantle and remove the same for the purpose of sale as machinery at any point of time. The facts as could be found also show that the purpose for which these machines were embedded was to use the plant as a factory for the manufacture of fertiliser at various stages of its production. Hence, the contention that these machines s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Central Board of Indirect Taxes 8s Customs, it has been clarified that Plant and Machinery in certain cases when affixed permanently to the earth would constitute immovable property. When a works contract is for the construction of plant and machinery, the ITC of the tax paid to the works contractor would be available to the recipient, whatever is the business of the recipient. This is because works contract in respect of plant and machinery comes within the exclusion clause of the negative list and ITC would be available when used in the course or furtherance of business. 16) . As regard to the nature of work being undertaken by the Appellant, we observe that as per the Letter of Acceptance (LOA) issued by the Rail Vikas Nigam limited (RVNL for short) the said scope of the work was Construction of PEB shed, structure, building water supply arrangement, drainage, sewerage, road work, track work, power supply and general electrical work, OHE work, signal telecommunication works and supply, installation and commissioning of machinery and plant in connection with setting up of electric loco shed at Saiyedpur Bhitri, Uttar Pradesh. The JV, in turn, further allocated th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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