Page 151 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] IN RE : P.K. MAHAPATRA 477
Drilling Machine and Mudguns are not equipment which are usually shifted one place to
another nor it is practicable to shift them frequently. The Court also referred to its
own judgments in the case of Quality 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 with-
in the meaning of the Act. It held that tube mill or welding head is immovable
property. In the case of Mittal Engineering Works, the issue was whether mono
vertical crystallisers is goods (in which case it would be excisable or immovable
property). The mono vertical crystallisers 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 there-
fore not goods but immovable property.
6.9 In the case of Duncans Industries Ltd. v. State of U.P. & Ors. on 3
December, 1999 Hon’ble Supreme Court had to decide whether the ‘plant and
machinery’ in the fertilizer is ‘goods’ or ‘immovable property. The Apex Court
held that the same is immovable property and observing as under :-
“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 fertiliser plant in the in-
stant case, are definitely embedded permanently with a view to utilise the
some as a fertiliser 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 fertiliser at various stages of its production. Hence, the contention that
these machines should be treated as movables cannot be accepted.”
6.10 In view of the discussions supra and as works contract, covers in
its ambit only certain works performed on immovable property we in affirmation
with the findings of the AAR and more so with no visible intention to dismantle
the said project for lighting and these being intended to be used for a fairly long
period of time and on the basis of the scope of work itself as forthcoming from
the contract agreement supra between the Appellant M/s. NMDC and M/s. Bajaj
Electricals, come to the considered conclusion that the resultant structures are
civil structures with foundations and are immovable in nature.
7. Now coming to the other issue raised by the Appellant, viz. whether
credit of the taxes paid on various items will be eligible if the said lighting project
satisfies the definition of “plant and machinery” and that Lighting of plant road
boundary & watchtower which comprises of items like street poles, fittings, avia-
tion lamps, switch box, pipes for laying the cables would qualify as an apparatus
or an equipment. The test of immovable property is not relevant for plant and
GST LAW TIMES  27th August 2020  151