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TMI Blog2022 (12) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Appellant') against the Advance Ruling order no. No. 03/ ODISHA-AAR/2021-22 dated 15-12-2021 pronounced by the Odisha Authority for Advances Ruling (OAAR). The Appellant has received the Advance Ruling order on dated 26-02-2022 and filed the appeal before the Appellate Authority for Advance Ruling, Odisha, on 24-03-2022 which is well within the time limit of one month as prescribed under section 100 of the Central Goods and Service tax Act, 2017 and the Orissa Goods and Services Tax Act 2017. The Appellant has also paid the requisite fee of 20,000/- on 23-03-2022 under Rule 106 of the Central Goods and Service Tax Act, 2017, 3.0 BRIEF FACTS OF THE CASE: 3.1 M/s. Indian Oil Corporation Limited, Paradip Refinery, is a public sector undertaking, bearing GSTIN No. 21AAACI1681G1Z1 for its Refinery business and 21AAACI1681G6ZW for its Petrochemical business. The Appellant is also registered in other States throughout India, The Appellant owns and operates 15 MMTPA oil refinery in the state of Odisha located at Paradeep and refines crude oil and produces several petroleum products at this location. The Appellant requires Hydrogen gas, Nitrogen gas and HP steam for its refining activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a monthly rent basis for 15 years. (ii) There is no specific job work agreement between the Appellant and M/s. Praxair India Pvt Ltd. (iii) No job work charges or any processing/conversion charges of inputs have been claimed by "Praxair" as evident from the invoices raised to the Appellant . (iv) As per agreement M/s. Praxair India Pvt Ltd. is raising six invoices each month for the service rendered under the agreement to Appellant which is as follows:- (a) two for fixed lease charges, (b) two for fixed operation & maintenance charges, and (c) two for variable operation & maintenance charges at the rate of 18%. 3.5 Before the Advance Ruling Authority, Odisha, the Appellant has submitted its agreement and O&M agreement. They mentioned the relevant clauses of both of the above agreement viz: Article no.3 (build), Article no. 4 (own & lease), Article no, 5 (Operate), Article no,6 (supply), Article no.7 (quantity), Article no. 8.1 (Specification) and Article no,8.2 of lease agreement for Hydrogen Plant and Nitrogen plant. They have also mentioned the Article no. 5 of Operation & maintenance Agreement for hydrogen Plant before the Appellate Authority for Advance Ruling. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (68) of section 2 of the CGST Act, 2017 and all the payments made by the Appellant under the agreement are in consideration of job work services provided by M/s. Praxair India Private Limited. 4.5 As per the terms and conditions of the agreement, Praxair has to construct, commission, lease and thereafter operate and maintain the Hydrogen and Nitrogen plant. The plants shall always remain the property of M/s. Praxair India Private Limited. The Appellant has submitted that the contention of the AAR, Odisha on control and possession of production plant is not with Praxair, is not true. In support of their submission they have also relied upon the following case.- i. Gujarat Authority of Advance Ruling in the case of Inox Air Products Private Limited [2018(14) GSTL 147(AAR-GST)] and ii. Kerala Authority for Advance Ruling in the case of Bharat Petroleum Corporation Ltd [2018 (19) GSTL 119 (AAR-GST)]. 4.6 Aggrieved by the order of the Advance Ruling Authority, Odisha, the Appellant has filed the present appeal before this Hon'ble Appellate Authority making prayers to:- (a) set aside or modify the impugned advance ruling passed by the Authority for Advance ruling as prayed ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servations raised by the Advance Ruling Authority, Odisha. 6.3 We find that the Appellant has submitted lease agreement and O&M agreement for both of the hydrogen plant and nitrogen plant. On going through both of these agreements of hydrogen plant and nitrogen plant, we find that M/s Praxair has given the production plant to the Appellant on lease for 15 years, which is clearly mention in the para 1.1 of the agreement which is reproduced below:- "the Lessor (M/s. Praxair India Private Limited) does hereby demise unto the Lesee (Appellant) by way of lease the production plant to hold the same unto the Lessee for a period of 15(fifteen) years from the effective date, paying therefore a monthly rent as hereinafter mentioned the Lessor acknowledges that vacant physical and peaceful possession of the production plant has been handed over to the Lessee on the effective date." 6.4 From the above para it is clear that the plant is not under the control and possession of M/s. Praxair India Private Limited; rather it has been handed over to the lessee (the Appellant i.e IOCL) on a monthly rent basis for 15 years. We have raised this point to the authorized representative of the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um Corporation Ltd [2018 (19) GSTL 119 (AAR-GST)]. 6.9 We have gone through the judgment given by the Authority of Advance Ruling, Gujrat in the case of M/s Inox Air Products Private Limited [2018 (14) GSTL 147 (AAR-GST). In this ruling, it is clearly mentioned that the Appellant (M/s Inox Air Products Private Limited) has entered into a job work agreement with M/s Esssar, Further in the said ruling at Para 2.3, it has been mentioned that the Appellant raised a daily invoice for the fixed and variable job work charges for each product, based on the the quantum cleared on that day. The AAR, Gujarat has given the judgment in favour of the Appellant (M/s Inox Air Products Private Limited) as there is a job work agreement and invoice was raised on job work charges. This fact was clearly mentioned under Para 15.3 of the judgment which is reproduced below;- "Further, the computation of Job Work Charges has been described at clause 6 of the agreement entered in to between the Appellant and M/s. Essar. The Job Work charge agreed by the Appellant and M/s. Essar is the sole consideration payable by M/s Essar to the Appellant for the agreed activity to be carried out by the Appellant ..." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but the authorized representatives could not clarify the said deficiency properly nor could they produce any agreement or part of the agreement clearly explaining about the job work charges in the invoice. 6.16 We have also under gone the legal part of the Job work. As per Section 2(68) of CGST Act, 2017 read with section 143 of CGST Act, 2017 defines the meaning of the term 'job work' and explains 'Job Work procedure'. However, on this procedural part as defined under the said provision, Advance Ruling Authority, Odisha has not raised any questions on the subject issue; But the Advance Ruling Authority, Odisha has objected that in addition to the procedural part, there should be specific "job work agreement" and "job work charges" should be clearly mentioned and raised in their invoices. 6.17 Therefore, It is our considered view that the activities undertaken in the Appellant 's premises or production plant do not qualify for 'Job Work' under section 2(68) of the Central Goods and Service Tax Act, 2017 (CGST Act). In light of the above, we are of the opinion that the Ruling of the Advance Ruling Authority, Odisha, is in tune with legal provisions of the Act and it needs no int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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