TMI Blog2022 (12) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. 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) - Ruling of the Advance Ruling Authority, Odisha, is in tune with legal provisions of the Act and it needs no interference. Appeal allowed. - 01/ODISHA-AAAR/Appeal/2022-23 - - - Dated:- 21-6-2022 - SHRI SURESH KISHNANI, MEMBER AND SHRI SUSHIL KUMAR LOHANI. MEMBER Present for the Appellant (P.H. attended through Video Conference) Sri Ramesh Chandra Jena, Advocate. Sri Satyaranjan Behera, GM (F), IOCL Sri Biswadipak Mohanty, SFM, IOCL At the outset, we would like to make it clear that the provisions of both the Central GST Act, 2017 and of Odisha GST Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited located in its Refinery Complex at Paradeep for manufacturing of industrial gases as the final product. The final products are send back to the Appellant by M/s. Praxair India Private Limited for the exclusive utilization in the refinery processes. All the output products resulted after processing are transferred to the Appellant through pipeline. The ownership of the input and output products remain with the Appellant only. 3.3 In the above back ground, the Appellant approached to Honble Advance Ruling Authority, Odisha (AAR) vide application no AD211120006200H dated 25.11.2020 for getting an advance ruling on the following issues:- (i) Whether sending of inputs (Naphtha, DM water, Power, Cooling water, service water and instrument air) by the Appellant to M/s. Praxair India Private Limited and receiving back of industrial gases (Hydrogen gas, Nitrogen gas and HP steam) under the lease agreement vail fall under job work in terms of section 2(68) of Central Goods and Service Tax Act, 2017 (CGST Act) and Odisha Goods and Service Tax Act, 2017 (OGST Act)? (ii) Whether all the payments under the lease agreement will attract GST as applicable to Job Work? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the following grounds:- 4.1 It submitted that even though the consideration under this agreement is being charged under three different heads (which are Fixed lease charges . Fixed Operation Maintenance Charges Variable Operation Maintenance Charges }, in sum and substance this is a job work agreement. The parties to this agreement never intended it be a simple lease agreement. This intention of parties has also been brought forward in the preambles of the Lease agreement Operation Maintenance agreement. 4.2. The Appellant submitted that as per 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 Praxair. It is trite law that for the purpose of ascertaining the true purpose objective of any transaction, entire document or contract has to be read as a whole and mere reliance on some part of the contract, divested from its context, would not be a correct approach. Hence the contention of the AAR that control and possession of production plant is not with Praxair is not true. 4.3 The Appellant further submitted that the control or possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandra Jena, Advocate, Sri Satyaranjan Behera, GM (F), IOCL and Sri Biswadipak Mohanty, SFM, IOCL. During the personal hearing, the authorized representatives have made the additional submissions and provided copy of each of the existing contracts. They reiterated their oral submission on job work requested to decide the case based on the submission which have already been made in their appeal application and also requested to decide the case favourably on merit. 6.0 Discussion Findings: 6.1 We have carefully gone through the facts of the case and submissions submitted by the Appellant in their application as well as the arguments advanced by the representatives of the Appellant during the personal hearing. We have also examined the order of the Advance Ruling Authority, Odisha, issued vide order No. 03/ ODISHA-AAR/2021-22 dated 15-12-2021 wherein the Advance Ruling Authority, odisha has observed that the activities undertaken by Praxair in the Appellant s premises on the input supplied by Appellant do not qualify for Job work on the following two grounds:- i. That, there is no specific job work agreement between the Appellant and M/s Praxair. No job work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement of hydrogen plant and nitrogen plant which deals with fixed/variable operation maintenance charges, we find that M/s. Praxair India Private Limited (as Contractor) has entered an agreement as Tripartite Agreement of assignment with the Appellant (as IOCL) for Operating and Maintaining a new Hydrogen Nitrogen Plant within the refinery complex, Paradeep wherein, in Para 3.1 to 3.3 of the agreement it has been clearly mentioned that:- IOCL can engage contractor to carry on the operation and maintenance of the Production Plant as on and from the Effective Date he personnel / employees or workers engaged in the Production Plant by the Contractor for operating the same shall in no way be the employee of IOCL .............. 6.7 It is clear from the above, that the contractor (M/s. Praxair India Private Limited) can carry out the work for operation and maintenance of the production plant under the specific control of IOCL. M/s. Praxair India Private Limited and it never charges any processing or conversion charges because none of such clauses mentioned for such charges in the lease agreement and O M agreement. Therefore, we are of the considered view on the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Appellant. 6.12 Further under Para no. 5 of the said order, job work charges have been clearly mentioned and the observations of the Advance Ruling Authority, Kerala is reproduced for reference:- These inputs subject to particular process by the job worker and converted in to principal. If is settled position of law that job work is an activity which may or may not tantamount to manufacture. A job worker may undertake manufacturing of goods on account of others from the inputs supplied to him free of cost, and realize job work charges on return of the goods so manufactured or processed. In such a scenario the job worker alone has the liability to pay tax on the job work charges realized. 6.13 In this case also, the Advance Ruling Authority Kerala has pronounced the judgment in favour of the party (M/s Bharat Petroleum Corporation Ltd) as there was a clear job work agreement and job work charges mentioned separately in invoices. Therefore the subsequent judgment is not applicable in the instant case, as the facts of the Appellant s case are not exactly similar to the above cases. 6.14 The Appellant admittedly submitted that as per agreement, M/s Praxair ..... X X X X Extracts X X X X X X X X Extracts X X X X
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