Page 141 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : JSW ENERGY LIMITED 467
tion of minor items by the job-worker would not detract from the nature and char-
acter of his work......
(Emphasis Supplied)
26. Seeking reference to the aforesaid paragraph, the Ld. Appellate Au-
thority has emphasized that air and water constitute a major input for generation
of power and accordingly supply of the same by the Appellant would exclude
the underlying transaction from the category of a ‘Job Work’. However, on refer-
ring the aforesaid cost analysis, the Appellant submits that the conclusion drawn
by the Appellate Authority is grossly erroneous and the coal to be provided by
the Principal would in fact constitute more than 95% of the cost for generation of
power. Further, the air and water to be provided by the job worker does not even
constitute more than 0.5% of the overall cost as can be observed from the above.
Accordingly, as per the principle laid down in the case of Prestige Engineering
(India) Limited (supra) additions of minor materials by the Job Worker (such as air
and water) would not alter the nature and character of the underlying transac-
tion. It would still be considered as a job work transaction.
27. Further, reference can also be placed on the decision of the Hon’ble
Orissa High Court in the case of Odisha Power Generation Corporation Ltd. v. State
of Odisha [(2015) 81 VST 138 (Ori.)], wherein based on the process of generation of
power in a thermal power plant, the Hon’ble High Court held that coal is the
primary raw material for generation of such power. The relevant paragraph of
the said judgment is reproduced as follows :
28. The above process clearly demonstrates that coal is the primary raw
material for generation/production of electricity in thermal power plant and
without coal, no electricity can be produced/ generated/ manufactured.
29. Basis the above, the Appellant humbly submits that the conclusion
drawn by the Appellate [Authority] on the grounds that air and water constitute
a major input which is provided by the Job Worker is grossly erroneous and is
liable to be set aside.
Submission of other documentary evidences/details :
30. The Appellant humbly submits that it was alleged by the Appellate
Authority that certain documentary evidences/details were not submitted to
justify the Job Work activity. To the same, following are the Appellant’s respons-
es :
31. Agreement or Proposed Agreement to understand the quantity and
value of inputs being supplied by the Principal and the amount and quantity of
inputs/materials being used by the job worker.
To the above, the Appellant submits that the transaction is at a conceptu-
alization stage and there is no proposed agreement. However, illustrative clauses
of the proposed agreement between JEL and JSL were already provided in the
Advance Ruling Application filed before the Advance Ruling Authority.
32. Further, the quantum of inputs to be sent to the Job Worker would
be dependent on the power supply required by the Principal, which in turn is
dependent on the estimated production of steel. Hence it would be difficult to
document the same, for the purpose of incorporating it in an agreement.
33. However, vide this additional submission, the Appellant has sub-
mitted a cost sheet which represents the per unit cost of power and accordingly
the corresponding quantum of inputs that would be required by the Job Worker.
GST LAW TIMES  23rd April 2020  261