TMI Blog2023 (12) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... s like installation, erection and commissioning of the plant. Thus, it is held it fulfills the criteria of an 'immovable property' as cattle feed plant is type of plant and machinery which is attached to earth or permanently fastened to anything attached to the earth. Reference made to Board Circular No. 177/09/2022-TRU dated 03.08.2022, where it was clarified by CBIC that supply, construction, installation and commissioning of a dairy plant on turn-key basis constitutes as works contract and dairy plant which comes into existence is an immovable property. The Cattle Feed Plant is an immovable property and supply of goods and services by the appellant for setting up and running of Cattle Feed Plant amounts to composite supply of works contract as defined in clause (119) of Section 2 of CGST Act, 2017. - SAMIR VAKIL AND B.V. SIVA NAGA KUMARI, MEMBER Present for the Appellant : Hardik Shah C.A. At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the 'CGST Act, 2017' and the 'GGST Act, 2017') are in pari mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of MOH Uduman and Ors [1991 AIR 1020], T.I. Miller Ltd [1987 (31) ELT 344], Advance Ruling in case of Shilchar Technologies Ltd [GUJ/GAAR/R/07/2021]. Appellant also submitted that plant is not rooted to earth but fixed with the help of nut bolt for efficient operation. Appellant relied upon ruling of GAAR in case of Air Control and Chemical Engineering Company Ltd [2021-TIOL-85-AAR-GST], NEC Technologies India Pvt Ltd [GUJ/GAAR/R/2020/07] and ruling of Karnataka AAR in case of M/s United Engineering Works [2019-TIOL-250-AAR-GST]. Appellant further submitted that as per the definition of 'composite supply', their supply of cattle feed plant along with services would qualify as composite supply and would be classifiable under the heading 8436 attracting GST @12%. In case of supply of cattle feed plant with civil work, the appellant submitted that above supply would result into immovable property and hence would be classifiable as works contract. 6. The Gujarat Authority for Advance Ruling (for short 'GAAR'), vide Advance Ruling No. GUJ/GAAR/R/2022/14 dated 14.03.2022 , ruled as follows:- Supply of a functional Cattle Feed Plant, inclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills Ltd [2002-TIOL-200-SC-CX] wherein it was held that paper making machine cannot be construed as immovable property since the whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency and also for safety. 9. The appellant further submitted that GAAR departed from their own view on various advance rulings wherein installation and erection without civil work has been held as supply of movable property. (i) In case of Air Control and Chemical Engineering Company Ltd [2021-TIOL-85-AAR-GST] GAAR observed that supply, testing and commissioning of 160 TR chilled water plant to naval dockyard is composite supply with the principal supply being of goods viz. '160 TR Chilled Water Plant'/ 'Chiller'. (ii) Further, in case of NEC Technologies India Pvt Ltd, GAAR vide Advance Ruling No. GUJ/GAAR/R/2020/07 dated 19.05.2020 held that design, development and supply of Automatic Fare Collection (AFC) System does not qualify as works contract as installed AFC System cannot be said to result in emergence of immovable property. 10. Appellant also relied upon the ruling of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies by the appellant are works contract service under GST or otherwise. 16. The term 'works contracts' has been defined under Section 2(119) of CGST Act, 2017 as below: works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out. improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of properly in goods (whether as goods or in some other form) is involved in the execution of such contract. From the above, it is evident that for any supply to be classified under works contract services the same should be with respect to an immovable property. 17. The term 'immovable property' is not defined under GST law. But the Section 3(26) of the General Clauses Act says '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. As per Transfer of Property Act, 'attached to the earth' means: (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the machineries which formed the fertilizer plant, were permanently embedded in the earth with an intention of running the fertilizer factory and while embedding these machineries the intention of the party was not to remove the same for the purpose of any sale of the same either as a part of a machinery or scrap and in the very nature of the user of these machineries, it was necessary that these machineries be permanently fixed to the ground. Therefore, it came to the conclusion that these machineries were immovable property which were permanently attached to the land in question. While coming to this conclusion the learned Judge relied upon the observations found in the case of Reynolds v. Ashby Son (1904 AC 466) and Official Liquidator v. Sri Krishna Deo Ors. (AIR 1959 AU. 247). We are inclined to agree with the above finding of the High Court that the plant and machinery in the instant case are immovable properties. The question whether a machinery which is embedded in the earth is movable property or an immovable property, depends upon the fads and circumstances of each case. Primarily, the court will have to take into consideration the intention of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing attached to earth like a building or a tree. The Tribunal has pointed out that it was for the operational efficiency of the machine that it was attached to earth. If the appellant wanted to sell the papermaking machine it could always remove it from its base and sell it. From the above observations, it is clear that this Court has decided the issue in that case based on the facts and circumstances pertaining to that case hence the same will not help the appellant in supporting its contention in this case where after perusing the documents and other attending circumstances available in this case, we have come to the conclusion that the plant and machinery in this case cannot but be described as an immovable property. Hence, we agree with the High Court on this point. [emphasis supplied] In the present case too we find from the photographs of cattle feed plant submitted by the appellant and also the work order dated 16.01.19 of Deshratna Dr. Rajendra Prasad Dugdh Utpadak Sahakari Sangh Ltd., that the equipments and machineries which formed the Cattle Feed Plant were permanently embedded in the earth with an intention of running the Cattle Feed factory. These machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y virtue of erection of the storage tanks. Considering from this perspective we have no hesitation to hold that the petroleum storage tanks are structures or things attached to the land within the definition of Sections 3 (s) and 3 (r) of the Act. Thereby they are exigible to property lax. In this view the appeal is allowed and the judgment of the High Court is reversed and that of the Court of Small Causes is affirmed. But in the circumstances each party is directed to pay and receive their respective costs throughout, [emphasis supplied) Relying on the ratio laid down in the above case we find the Cattle Feed Plant supplied by the appellant cannot be moved in the same position to any other place without being dismantled and re-erected. Therefore the plant and machineries for Cattle Feed Plant supplied by the appellant is immovable and attached to earth. 24. The appellant we find has relied upon the case of Solid Correct Engineering Works and Ors [2010 (252) ELT 481 (SC)] wherein it was held that machine, fixed by nuts and bolts to a foundation to provide wobble free operation to the machine, is not immovable property. On going through the above referred judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isable goods. Answering the question in negative this Court held that tube mill and welding head erected and installed in the premises and embedded to earth ceased to be goods within the meaning of Section 3 of the Act as the same no longer remained moveable goods that could be brought to market for being bought and sold. We do not see any comparison between the erection and installation of a tube mill which involved a comprehensive process of installing slitting line, tube rolling plant, welding plant, testing equipment and galvanizing etc., referred to in the decision of this Court with the setting up of a hot mix plant as in this case. As observed by this Court in Triveni Engineering Industries case (supra), the fads and circumstances of each case shall have to be examined for determining not only the factum of fastening/attachment to the earth but also the intention behind the same. 32. So also in T.T.G. Industries Ltd. v. CCE, Raipur - 2004 (167) E.L.T. 501 (S.C), the machinery was erected at the site by the assessee on a specially made concrete platform at a level of 25 ft. height. Considering the weight and volume of the machine and the processes involved in its ere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed plant, storage silo plant and steam generation plant. iv. The supply involves cable trench layout; electrical drawings, ETP drawings including civil construction work, including drawings of civil structure. v. The mechanical installation comprises supply and installation of structural platforms and tables. vi. The supply comprises final adjustment of the foundations including alignment and dressing of foundation surface, embedding and grouting of anchor bolts and bedplates. vii. Appellant shall only after the alignment has been checked by it and witnessed by the Purchaser, then afterwards only, permanently bolt down the equipment to foundations/ structure. viii. Appellant shall supply, fix and maintain, at its own cost, during the erection work, all the necessary centering, scaffolding, staging required not only for proper execution and protection of the said work but also for protection of the surrounding plant and equipment. ix. Appellant shall supply box type platforms, pipe support bridges/gantry. x. Appellant shall install all pipes, valves and specialities being procured from other sources. xi. The supply includes Testing and Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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