Page 170 - GSTL_3rd September 2020_Vol 40_Part 1

104 GST LAW TIMES [ Vol. 40
o It is settled law that clauses in the agreement should be read
as a whole and not in isolation to understand the tenor and
intention of the contracting parties.
o The Appellant had explained in their application about the
civil works on which the Appellant does not intend to claim
credit. The Appellant further made submissions that it is only
Package III rail network that is outside the factory which has
been duly recorded in Para 4 of the Order.
o The Appellant draws attention the scope of work given pack-
age-wise in their submissions dated 13-3-2019.
o Denial of credit only on the ground the contract involves civil
work is unsustainable. Basis the above table, it is clear that
the contract is for railway siding works and apart from the
civil works involved in the contract, the Appellant is eligible
to take credit of taxes paid by it.
(h) That, the Hon’ble Supreme Court in the case of Jayaswal Neco Ltd.
[2015 (319) E.L.T. 247 (S.C.)] has held that Railway track was han-
dling system for raw material and processed material. Their use in-
side plant formed process of manufacturing. It was integral part of
process as without activity for which railway tracks are used, manu-
facturing/commercial production of pig iron was not possible.
Hence, railway track was capital goods, on which assessee was enti-
tled to take credit of duty paid by them. The relevant Para is quoted
below for your reference :
“18. We find from the order of the Commissioner that in spite of
taking note of the aforesaid use of the railway tracks and accepting
the same as correct, the Commissioner denied the relief to the ap-
pellant on an extraneous ground, i.e., railway tracks were used for
other purposes as well, namely, apart from conveying hot metal
and hot pigs, it was used for carrying raw materials and finished
goods as well. This can hardly be a ground to deny the relief inas-
much as by incidental use of the railway tracks for some other in-
nocuous purpose, it does not lose the character of being an integral
part of the manufacturing process. The Commissioner has further
observed in his order that the railway track is not utilized directly
or indirectly for producing or processing of goods or bringing about
any change for manufacture of final product. This conclusion, obvi-
ously, is completely erroneous and amounts to misreading of the
process. Such an error has occurred because the Commissioner did
not keep in mind the principle of law laid down by this Court in
M/s. J.K. Cotton Spinning & Weaving Mills Co. Ltd.’s case, highlighted
above.
(i) When we read the order of the CEGAT, we find that CEGAT has
not even adverted to and examined the issue from the aforesaid an-
gle, which was the only method for arriving at a finding as to
whether the railway tracks installed within the plant would come
within the definition of capital goods under Rule 57Q of the Rules
or not. The order of the CEGAT is stoically silent. It has affirmed the
order of the Commissioner by simply observing that the Commis-
sioner has arrived at the conclusion that these goods are not being
used directly or indirectly for producing or processing the goods or
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