Page 187 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : P.K. MAHAPATRA 121
such Drilling Machine and Mudguns are not equipment which are usually shift-
ed 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 within 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 ex-
cisable 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 therefore not goods but immovable property.
8.2 In the case of Duncans Industries Ltd. v. State of U.P. & Ors. on 3 De-
cember, 1999 Hon’ble Supreme Court had to decide whether the ‘plant and ma-
chinery’ 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
same 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.”
8.3 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 of construction of private Railway siding, these being intended to
be used for a fairly long period of time and on the basis of the scope of work it-
self as forthcoming from the documents supra issued by the Appellant M/s.
NMDC, we come to the considered conclusion that the said project of private
Railway siding, consists of civil structures with foundations and are immovable
in nature.
9. 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 laying of pri-
vate railway siding satisfies the definition of “plant and machinery” and that the
rail network, signaling system and other telecom network established can be re-
garded as an apparatus or an equipment. The test of immovable property is not
GST LAW TIMES  3rd September 2020  203