Page 137 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] IN RE : SATYESH BRINECHEM PRIVATE LIMITED 95
Commissioner v. Rajasthan Spinning & Weaving Mills Ltd.
— 2010 (255) E.L.T. 481 (S.C.) — Referred ............................................................................... [Para 2.15]
Elecon Engineering Co. Ltd. — Supreme Court Order — Referred ............................................... [Para 2.11]
Jayaswal Neco Ltd. v. Commissioner — 2015 (319) E.L.T. 247 (S.C.) — Referred ....................... [Para 2.14]
Scientific Engineering House (P) Ltd. v. Commissioner of Income Tax
— 157 ITR 86 (S.C.) — Referred ............................................................................... [Paras 2.9, 2.10, 2.11]
Siddeshwari Cotton Mills (P) Ltd. v. Union of India
— 1989 (39) E.L.T. 498 (S.C.) — Referred ................................................................................. [Para 2.18]
State of Gujarat v. Pipavav Defense and Offshore Engineering Company Ltd.
— (2017) 105 VST 60 (Guj.) — Referred .................................................................................... [Para 2.16]
REPRESENTED BY : Shri Samir Sidhpuria, Advocate, for the Assessee.
[Order]. - The applicant, vide Form GST ARA-01, dated 22-2-2018, men-
tioned their queries as under :
Queries
Whether input tax credit is admissible to the applicant under the GST
Acts in respect of bunds which are constructed and used in the manufac-
ture of salt and bromine chemicals?
2. The Applicant is a private limited company engaged in the manufac-
ture and supply of salt and bromine chemicals. The applicant is setting up a
Greenfield project for manufacture of salt and bromine chemicals in the Greater
Rann of Kutch in the State of Gujarat. The salt manufactured by the applicant is
required to be exported as per condition and undertaking given to the Govt.
while taking land on lease basis. Therefore the manufactured salt is zero-rated
supply u/s. 16 of the IGST Act for the applicant.
2.1 Process of manufacturing salt and bromine chemicals :
(1) The applicant may point out that Salt and Brine are produced from
sea water which requires solar evaporation. For the purpose of
manufacturing salt the applicant has to construct “Bunds” which
are also known as “crystallizers” wherein Salt gets deposited. Due
to atmospheric heat and solar evaporation raw salt crystalize from
sea water in the crystallizers within 40 to 45 days. Later on the raw
salt thus deposited is harvested either manually or by machines.
(2) In order to produce industrial salt, the harvested salt in the form of
wet crystals is washed in the washery plant with brine to remove
insoluble matter as well as soluble impurities. The washery plant
consists of steel structures in which the applicant has to install
equipment like Belt conveyor, metallic screener, hopper, and lay the
civil foundation at different heights as per process requirement.
(3) After harvesting the raw salt, the remaining brine is discharged into
the circuit area and stored in the Reservoir for conversion into “bit-
tern” which is used as raw material in the manufacture of bromine.
In order to form such circuit the applicant requires “Bunds”.
“Bunds” are prepared by sub-contractor by using the material like
Soil, Terrazyme Chemical, HB Metal and LDPE film etc. The appli-
cant is paying GST on procurement of works contract services and
purchase of materials also. Without “bunds”/“crystallizers” activity
of manufacturing salt and bromine are not possible. Thereafter, the
Bittern is transferred through pipeline into the Bromine Plant.
GST LAW TIMES  7th May 2020  137