Case Law Details
In re Konkan LNG Private Limited. (GST AAAR Maharashtra)
The Maharashtra Appellate Authority confirmed the Maharashtra Advance Ruling Autority Order by holding that the Appellant is not eligible for taking ITC in terms of section 16 read with section 17 of the MGST ACT / CGST ACT ( CGST/ SGST / IGST ) on construction of the above said Breakwater.
‘Plant’ generally means and includes a place where industrial activity takes place or a factory where certain material is produced or big machinery used to carry out certain processes of production. The term ‘plant and machinery’ is used in conjunction with each other and by the application of the principle of ‘ejusdem generis’, it is clear that the meaning to be given to the term ‘machinery’ should take its color from the word ‘plant’. The term ‘plant and machinery’ therefore should be interpreted to mean a place where certain commercial /manufacturing activities/ processes of production are carried out with the help of inputs. In the present case, the breakwater wall or the Accopods that are an essential part of it certainly do not qualify as ‘plant and machinery’.The explanation to section 17(5)(d) says that the term ‘plant and machinery’ covers apparatus, equipment and machinery. The break water wall constructed on the sea to protect the ship from high waves can hardly be called machinery or apparatus or equipment. Neither in common parlance nor in technical parlance would one associate a civil structure like a breakwall to be ‘plant and machinery’or ‘machinery, apparatus or equipment. Machines are something which employ power to achieve. Equipment and apparatus mean tools for a particular purpose. The term ‘tool’ here is very important. It is meant to be a device or implement, especially one held in the hand, used to carry out a particular function. The breakwater wall does not remotely fall under any of these description. The images of the project show that it is essentially a wall or a civil structure meant to protect the jetty from tides and waves. In regard with our finding that the breakwater does not come under the definition of plant and machinery, there seems no purpose in examining whether it is used for making outward supplies.
Break water not only comprises piling of Accropods on top of each other but involves extensive civil work and foundation laying in order to build the break water wall and the Accropods is only a part of it. It is therefore an immoveable structure though not plant and machinery. It is seen from the explanation that land, building and civil structures are specifically excluded from the scope of ‘plant and machinery’. Therefore even though assuming that the structure is a plant and machinery ( which it is not as we have concluded in the preceding paragraph) it will be excluded by virtue of it being a civil structure. The extensive earthwork as well as civil work which has gone into the making of the breakwater wall makes it clear that the entire thing is nothing but a civil structure. The terminology itself says that it is a wall.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, MAHARASHTRA
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