Page 145 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : JSW ENERGY LIMITED 471
(1) A registered person (hereafter in this section referred to as the “princi-
pal”) may under intimation and subject to such conditions as may be pre-
scribed, send any inputs or capital goods, without payment of tax, to a job
worker for job work and from there subsequently send to another job
worker and likewise, and shall, -
(a) bring back inputs, after completion of job work or otherwise,
or capital goods, other than moulds and dies, jigs and fixtures,
or tools, within one year and three years, respectively, of their
being sent out, to any of his place of business, without pay-
ment of tax;
RULE 45. Stipulates the Conditions and restrictions in respect of inputs
and capital goods sent to the job worker. - (1) The inputs, semi-finished
goods or capital goods shall be sent to the job worker under the cover of a
challan issued by the principal, including where such goods are sent direct-
ly to a job worker, and where the goods are sent from one job worker to an-
other job worker, the challan may be issued either by the principal or the
job worker sending the goods to another job worker
From the above definitions, it is clear that job work involves (i) two per-
sons, (ii) goods, and (iii) process/treatment on the goods. Also, the proce-
dure for job work is prescribed under Section 143 of CGST Act and Rule 45
of the CGST Rules.
47. On a harmonious reading of the definition of Job Work and the pro-
cedure for the same, it is construed that the Principal will send the inputs to the
job worker for conducting any treatment/process (which may or may not
amount to manufacture) and shall bring back the same after completion of job
work or otherwise. Therefore, the goods sent to the job worker should be the In-
puts of the Principal. Here M/s. JSL are acting as the Principal, so the Inputs
should belong to them. However, in the present case, the goods being proposed
to be sent to M/s. JEL, i.e. coal, are inputs for M/s. JEL itself for their final prod-
uct i.e. Electricity and not the inputs for the Principal, i.e. M/s. JSL as they are
manufacturer of Steel and not power.
48. M/s. JEL has not clarified whether they would be sending the gen-
erated electricity only to M/s. JSL and nobody else on commercial basis as they
have done in past. From the affidavit in support of petition filed before MERC by
Maharashtra State Electricity Distribution Company Limited (MSEDCL), it can
be seen that M/s JEL had entered into a Power Purchase Agreement (PPA) with
MSEDCL
49. Para 3.4.1 of the petition clarifies that the seller (M/s. JEL) would
supply power to the extent of contracted capacity to MSEDCL, where the seller
(M/s. JEL) shall not itself use any of the electricity generated by the unit, to the
extent of its contracted capacity.
M/s. JSL in engaged in manufacture of steel and M/s. JEL is engaged in
production of electricity which it appears would not solelv be for its own con-
sumption, the electricity generated at M/s. JEL is said to be transmitted through
electrical grid of MSEDCL to the consuming Steel manufacturing unit of M/s.
JSL, however as there is no agreement between M/s. JEL and MSEDCL available,
how would M/s. JSL ensure that electricity transmitted would be sent to them
and not be utilized somewhere else by MSEDCL.
50. As per the provision of Section 143(1)(a) of the CGST Act, 2017,
there should be involvement of only two persons i.e. one principal and another
job worker for any transaction to be falling under the ambit of job work, which is
GST LAW TIMES  23rd April 2020  265