Page 249 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : SIEMENS LTD. 495
Steel Tubes (P) Ltd., 1995 (75) E.L.T. 17 (S.C.) and Mittal Engineering Works (P) Ltd.,
1996 (88) E.L.T. 622 (S.C.). In the case of Quality Steel Tubes (cited supra), the
Court held that goods which are attached to earth and thus become immovable
did not satisfy the test of being goods within the meaning of the Act. It held that
tube mill or welding head is immovable property. In the case of Mittal Engineer-
ing Works, the issue was whether mono vertical crystallizers is goods (in which
case it would be excisable or immovable property). The mono vertical crystalliz-
ers is fixed on solid RCC Slab. It consists of bottom plates, tanks, coils, drive
frames, supports etc. It is a tall structure rather like a tower with a platform. It
was decided by the Court that the said product has to be assembled, erected and
attached to the earth by a foundation and therefore not goods but immovable
property.
56. We shall also refer to the Supreme Court decision in the case of
Duncans Industries Ltd. v. State of U.P. & Ors. on 3 December, 1999 where the SC
had to decide whether the ‘plant and machinery’ in the fertilizer is ‘goods’ or
‘immoveable property. The Apex Court held that the same is immoveable prop-
erty and observed the following -
.. “The question whether a machinery which is embedded in the earth is
movable property or an immovable property, depends upon the facts and
circumstances of each case. Primarily, the Court will have to take into con-
sideration the intention of the parties when it decided to embed the ma-
chinery whether such embedment was intended to be temporary or perma-
nent. A careful perusal of the agreement of sale and the conveyance deed
along with the attendant circumstances and taking into consideration the
nature of machineries involved clearly shows that the machineries which
have been embedded in the earth to constitute a fertilizer plant in the in-
stant case, are definitely embedded permanently with a view to utilize the
same as a fertilizers plant. The description of the machines as seen in the
Schedule attached to the deed of conveyance also shows without any doubt
that they were set up permanently in the land in question with a view to
operate a fertilizer plant and the same was not embedded to dismantle and
remove the same for the purpose of sale as machinery at any point of time.
The facts as could be found also show that the purpose for which these ma-
chines were embedded was to use the plant as a factory for the manufacture
of fertilizer at various stages of its production. Hence, the contention that
these machines should be treated as movables cannot be accepted.”
Thus, what can be seen from the above is that when machines are embedded
with no visible intention to dismantle them and they are intended to be used for
a fairly long period of time, they are ‘immoveable property’.
The judgment relied by the appellant regarding immovability are not
applicable as the facts in the present case and in the judgments cited are differ-
ent. Rather ratios in judgments of M/s. T.T.G. Industries Ltd. v. Collector of Central
Excise; Mittal Engineering Works (P) Ltd., 1996 (88) E.L.T. 622 (S.C.) and M/s.
Dunkens Industries Ltd. are squarely applicable to the present case since the na-
ture of contracts and its execution show without any doubt that the complete set
up of the project in between Pugalur and North Trichur is permanent with a
view to operate the project by PGCIL and not to dismantle and remove the same
for any purpose at any point of time in future.

GST LAW TIMES  21st May 2020  249