M/s. Satyesh Brinehem Private Limited (herein after referred to as “the applicant”) raised the following question for advance ruling in the application for Advance Ruling filed by it.

“Whether input tax credit is admissible to the applicant under the GST Acts in respect of bunds which are constructed and used in the manufacture of salt and bromine chemicals?”

2.1 The applicant submitted in the application for Advance Ruling that the applicant is setting up a Greenfield project for manufacture of salt and bromine chemicals in the Greater Rann of Kutch in the State of Gujarat. The salt manufactured by the applicant is required to be exported as per condition and undertaking given to the Government while taking land on lease basis. Therefore the manufactured salt is ‘Zero Rated’ supply under section 16 of the Integrated Goods and Services Tax Act, 2017(herein after referred to as the “IGST Act, 2017”) for the applicant.

2.2 The applicant described the process of manufacturing salt and bromine chemicals. It was submitted that the material used for constructing bunds as well  as the services availed for construction of bunds are used in the course or furtherance of business, hence input tax credit is admissible under Section 16(1) of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 (herein after referred to as the “CGST Act, 2017” and the “GGST Act, 2017” respectively and collectively referred to as the “GST Acts”). It was submitted that “bunds” do not fall under any of the restrictive clauses of Section 17 of the GST Acts and hence input tax credit is admissible. It was further submitted that the “bunds” are plant and machinery used for manufacturing salt and bromine and hence clauses (c) and (d) of Section 17(5) of the Acts are in applicable. The applicant submitted that the “bunds” are directly used in the manufacturing process and hence they qualify as “plant and machinery”. The applicant cited several judgements in support of its contentions. As regards the phrase “any other civil structure” appearing in explanation to Section 17 of the GST Acts, the applicant submitted that the same is to be read’ ejusdem generis to the preceding words being land and building. It has been submitted that the phrase “any civil structures” is to be restricted to immovable property in the nature of land and building i.e. property which is as such only a place where the business is carried on or where manufacturing activity is undertaken. Any structure which is used as an apparatus in the manufacturing activity wiki not be “any other civil structure” and it will be “plant and machinery” for which input tax credit is admissible.

3. The Gujarat Authority for Advance Ruling (herein after referred to as ‘the GAAR’). vide Advance Ruling No. GUJ/GAAR/R/19/2019 dated 11.09.2019. inter-alia observed that as per section 16(2) of the IGST Act, 2017, input tax credit is available on inputs and’ input services to make Zero Rated supplies (such supply may be an exempt supply), subject to the provisions of sub-section (5) of section 17 of the CGST Act, 2017. It was also observed that as per clauses (c) and (d) of Section 17(5) of the GST Acts, input tax credit is not admissible in respect of works contract services or any goods and services for construction of immovable property (other than plant and machinery). Thus, a specific exception is made with regard to “plant and machinery”. In view of the foregoing, the GAAR ruled as follows :

“Question 1: Whether input tax credit is admissible to the applicant under the GST Acts in respect of bunds which are constructed and used in the manufacture of salt and bromine chemicals?

Answer: Input tax credit of GST paid on goods and services used to construct the “bunds” is admissible to M/s. Satyesh Brinechem Private Limited, provided that the bunds are used for making zero rated supplies and fulfill the conditions which are necessary for treating the bunds as “plant and machinery”.”

4. Aggrieved by the aforesaid ruling, the Deputy Commissioner, Central Goods and Services Tax, Division – VI, Ahmedabad – South Commissionerate (Jurisdictional Officer) (herein after referred to. as the “appellant”) has filed the present appeal.

5.1 It has been submitted in the grounds of appeal that the aforesaid Advance Ruling is based on erroneous interpretation of “Bunds” as and machinery’ whereas as per Section 17(5) of the CGST Act, 2017, “Bunds” qualifies as immovable property. Further, aforesaid Advance Ruling has erroneously allowed input tax credit on excluded category as marked in Section 17, clauses (c) and (d). It has been submitted that in the instant case, “Bunds” also fall in the category of exclusion mentioned in section 17 being a land, building or any other civil structure and shall not be considered as the apparatus, equipment and machinery,

5.2 It has been further submitted that the applicant themselves have submitted that the applicant has to construct “Bunds” with soil. However, as per explanation given in Section 17 of the CGST Act, 2017, the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes –

(i) land, building or any other civil structures;

(ii) telecommunication towers; and

(iii) pipelines laid outside the factory premises.

It has been submitted that the applicant themselves have categorized it as the immovable property by constructing it and shall fall under. the category of “land, building or any civil structure” and therefore as per the exclusion of Section 17(5), it does not qualify as the ‘plant and machinery’.

5.3 The decision in the case of M/s. Konkan LNG Pvt. Ltd. repotted at 2019 (27) GSTL 112 (AAR-GST) has been Cited and it has been submitted that it has been held in the said decision that Break Wall is an immovable property and does not fall within the ambit of ‘plant and machinery’ and as such input tax credit is not admissible. It has been submitted that the ratio of the above case law is squarely applicable to the facts of the present ease.

5.4 As regards the phrase “any other civil structure”, it has been submitted that the applicant themselves have stated that they are constructing the “bunds” by using the material like Soil, Terrazyme Chemical, HB Metal and LDPE Film etc., and therefore, it may be classified as the Civil Structure and an immovable property from where manufacturing is being carried out with the harvesting of the raw salt and so as per Section 17(5) of the CGST Act, 2017, they shall not be eligible for Input Tax Credit on construction of “bunds” being immovable property. It has been submitted that the applicant have further submitted that they use works contract services for construction of “bunds”. However, as per the exception mentioned in the section. 17(5) of the CGST Act, 2017, they shall not be eligible for availing the Input Tax Credit on activity of construction of immovable property i.e. “Bunds”.

6.1 The applicant has submitted counter reply to the Grounds of Appeal vide its letter dated 26.12.2019. The applicant has explained the process of industrial salt and has submitted that the “bunds” are prepared by using the material like Soil, Water, Terrazyme Chemical, GSB Metal, HB Metal, Steel, Cement, Box Culvert, LDPE Film, etc. It has been submitted that without “bunds”, production of salt and bromine are not possible and it is an integral part of the entire manufacturing process.

6.2 The applicant has mentioned that the Jurisdictional Authority had not furnished any submissions / comments in the matter, which has been recorded by the GAAR in the impugned order. The applicant has submitted that the authorization issued by the Principal Commissioner to file appeal, in exercise of the powers conferred under Section 107(2) of the CGST Act, 2017 is erroneous and as the authorization itself being fundamentally wrong, the appeal filed by exercising the said authorization would be void and liable to be quashed. The applicant has relied-upon-the decision in case of M/s. Tiger Services Vs. CCE, Madurai [2009-TIOL-607-CESTAT-MAD]

6.3 The applicant has further submitted that the reliance placed on the decision in the case of Konkan LNG Private Limited [2019 (27) GSTL 112 (AAR-GST)] is not sustainable in the facts of the present case. It has been submitted that as per Section 103 of the CGST Act, 2017, Advance Ruling pronounced under Chapter XVII is binding only on the applicant who had sought the advance ruling and the jurisdictional officer in respect of the applicant who has sought the ruling. It has been submitted that on the contrary, the observations made by the AAR in Konkan LNG (supra) favours the applicant and may have persuasive value.

6.4 The applicant has submitted that the “bunds” (crystallizers) are covered in the ambit of the plant and therefore are eligible for input tax credit. It has been submitted that while input tax credit is not admissible in respect of works contract services or any goods and services for construction of immovable property, generally, a specific exception is made with regard to ‘plant and machinery’. The applicant has also referred to the definition of the phrase ‘plant and machinery’ given in explanation to Section 17 of the CGST Act, 2017 and submitted that an essential component of plant and machinery is that it should be used for making outward supply of goods. It has been submitted that “bunds” are an indispensable part of manufacturing process of salt, since without “bunds”, the applicant would not be able to commence the evaporation process, a critical activity in the entire process of manufacturing salt. The applicant has placed reliance on the following case laws

(i) The State of Gujarat Vs. M/s. Pipavav Defense and Offshore Engineering Company Limited [2017-TIOL-1018-HC-AHM-VAT]

(ii) Inland Revenue Commissioner Vs. Barclay, Curle & Company Limited [(1970) 76 ITR 62 (HL)]

(iii) Scientific Engineering House (P) Ltd. vs. CIT [2002-TIOL-665-SC-IT]

(iv) CIT Vs. Elecon Engineering Company Limited [2003-TIOL-275-HC-AHM]

(v) Collector of Central’ Excise Vs. Rajasthan State Chemical Works [1991 (9) TMI 73-Supreme court]

6.5 The applicant has submitted that salt manufacturing process has to be viewed from independent of a traditional manufacturing process leading to manufacture of goods in a factory and outward supply therefrom. “Bunds” are not mere immovable property, the “bund” itself plays an essential part in the manufacturing process. The applicant also submitted their ‘site plant’.

6.6 The applicant has submitted that the appeal filed by the department assumes that ‘immovable property’ automatically stands outside the scope of input tax-credit scheme, which in applicant’s view is based on incorrect interpretation of law. The appeal concedes the fact that Soil, Water, Terrazyme Chemical, GSB Metal, HB Metal, Steel, Cement, Box Culvert, LDPE Film etc. are used in the construction of the “bund”. The GST Law does not mandate disallowance of input tax credit merely because various GST suffered material together become immovable post its erection/ construction post its receipt in the factory. For examples various machineries received in a factory may become a cement or sugar plant which is immovable in nature, however, the immovability in itself would not warrant denial of input tax credit under GST law, especially plant and machinery’ is excluded from the restrictive provisions by way of sub-clause (c) and (d) of Section 17(5) of the CGST Act, 2017. In view of these submissions, the applicant has submitted that since “bunds” (crystallizers) are covered within the ambit of ‘plant’, the applicant is eligible for input tax credit on services received for such bunds,

6.7 The applicant has further submitted that the “bunds” (crystallizers) are not ‘land, building and any other civil structure’ which is excluded from the ambit of ‘plant and machinery’. It has been submitted that the applicant has nowhere concurred that the “bund” falls in the category of ‘land, building or any civil structure. On the contrary, it has stated in the application for advance ruling that the bund covered in the ambit of plant and machinery’ as per the explanation provided in Section 17(5) of the CGST Act, 2017. It has been submitted that it has been merely stated in the appeal that “bunds” are covered under land, building and civil structure, without providing any reason for such an inclusion. The applicant has submitted that the phrase ‘any other civil structures’ as appearing in explanation to Section 17(5) of the GST Acts is to be read ejusdem generis to the preceding words being land and building. The applicant has cited judgements of Hon’ble Supreme Court in the case of Collector of Central Excise, Bombay Vs. Maharashtra Fur Fabric Limited [2002 (145) ELT 287 (SC)] and judgement in the case of Amar Chandra Chakraborty Vs. Collector of Central Excise [AIR 1972 SC 1863)], in this regard. It has been submitted that the “bunds” are neither land nor building, accordingly, applying the principle of ejusdem generis, “bunds” (crystallizers) can neither be constructed as any other civil structure.

6.8 The applicant has further submitted that the GST law hag not clearly delineated whether the salt works, i.e. salt pans reservoirs and condensers etc. are covered under the meaning of plant. Under such circumstance, inference has to be drawn from other legislations. It has been submitted that the Income Tax Act, 1961 clearly provides the treatment of Salt Works as the depreciation schedule under the Income Tax Act, 1961 covers Salt Works. It has been submitted that once the Salt Works are covered under the ambit of plant and machinery under the Income Tax Act, 1961, it would be plausible to infer that the same element would retain its identity as a plant and machinery even under the GST law. The principles laid down under the Income Tax Act, 1961 may be applied to draw an analogy even under the GST law, given the fact there is no detailed aspect provided under the GST law to classify an item as a plant and machinery.

6.9 The applicant has requested to set aside the appeal filed by the Assistant Commissioner and consider (crystallizers) as plant and’ machinery allowing input tax credit thereon.

7, The Personal Hearing in this case was held on 30.12.2019 wherein Shri Mahendra Kumar, Assistant Commissioner, Division VI, CGST, Ahmedabad South Commissionerate reiterated points made in appeal memorandum and Shri Manakiwala, CA reiterated the points made in written and counter submissions dated 26.12.2019.

8. The applicant vide letter dated 02.01.2020 Submitted that they would like to place additional submission and appear in person for personal hearing and requested to grant an opportunity for personal hearing and written submission. Accordingly, an opportunity of Personal Hearing has again been granted on 13.01.2020, wherein Shri Paresh M. Dave, Shai Amal p. Dave and Shri Ashish Shah appeared on behalf of the applicant and submitted detailed written submission of dated 13.01.2020, a synopsis and copies of relied upon circular and judgements in support of their arguments. Shri Mahendra Kumar, Assistant Commissioner appeared on behalf of the appellant department.

9.1 In the written submission dated 13.01.2020, the applicant has, inter-alia submitted that the bunds are clearly “Plant and machinery” as they arc the tools of the trade and without them manufacture of salt is impossible. It has been submitted that the appellant department has not disputed that bunds do not qualify as ‘plant and machinery’, however, the dispute raised by the appellant department is based on the exception to ‘plant and machinery’ as laid down in the explanation to section 17 of the CGST Act, 2017. It has been submitted that on the basis of the definition of the expression “plant and machinery”, the bone of contention of the appellant is that bunds fall in the exception (i) of “land, building or any other civil structure” and it is therefore not a ‘plant and machinery’. In this regard, the applicant has submitted that the dispute involved in this case is regarding admissibility of input, tax credit, which is an integral part of the substantive provisions of the GST Acts. It has been submitted that it is well settled that substantive provisions of taxing statutes are to be strictly construed. The applicant relied upon the decisions. In the case of The State of West Bengal Vs. Kesoram Industries Ltd. and Others [JT 2004 (1) SC 375], Commissioner of Sales Tax, Uttar Pradesh vs. Modi sugar Mills Ltd. [12 STC 182 (SC)] and State of Gujarat vs. Reliance Industries Ltd. [(2018) 50 GSTR 14 (SC)]

9.2 The applicant has further submitted. that the phrase “any other civil structures” as appearing in clause (i) of Explanation to Section 17 of the GST Acts is to be read ejusdem generis to the preceding words being ‘land and building’. The applicant relied upon the decisions in the case of Amar Chandra Chakraborty Vs. Collector of Central Excise [AIR 1972 SC 1863] and Siddeshwari Cotton Mills (P) Ltd. Vs. Union of India [AIR 1989 SC 1019]. It has been submitted that by applying the principle of ejusdem generis, the phrase “any other civil structures” in clause (i) of the Explanation to section 17 of the GST Acts is to be restricted to immovable property in the nature of land and building i.e. property which is as such only a place where the business is carried on or where manufacturing activity is undertaken. Any structure which is used as an apparatus in the manufacturing activity and with the help of which the process of manufacture is undertaken will not be “any other civil structure” within the meaning of that clause. It has been therefore submitted that bunds are “plant and machinery” and therefore input tax credit is admissible to it. The applicant has submitted that the submission of the appellant department that bunds are civil structures and therefore they are not plant and machinery is incorrect and should be rejected.

9.3 It has been submitted by the applicant that the emphasis of the appellant that bunds are constructed by the respondent and are therefore immovable property and hence input tax credit is not admissible, is unwarranted and unjustified. It has been submitted by the applicant that even if what is constructed is Immovable property, if it qualifies as plant and machinery, then input tax credit is admissible under the GST Acts. The applicant referred to the definition of “works contract” given under section 2(119) of the GST Acts and submitted that the works contract necessarily relates to immovable property and when plant and machinery is carved out as an exception to works contract for granting input tax credit, it is a provision granting input tax credit even if plant and machinery is immovable property. It has been further submitted that machinery or equipment fixed to earth by foundation or structural support which is specified as plant and machinery for admissibility of input tax credit is immovable property only. They relied on the decisions in case of Madras Petrochem Ltd. Vs. Commercial Tax Officer and Others [103 STC 54 (TNTST)]. Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam Vs. Bobby Rubber Industries [108 STC 410 (Ker.)], Commissioner, Sales Tax, U.P., Lucknow Vs. Prahlad Industries [112 STC 548 (All.)], Karthik Engineering Works vs. state of Karnataka [119 STC 88 (Kar,)], Commissioner Trade Tax, UP Vs. Gulshan Sugar And Chemicals Ltd. [25 VST 505 (All.)], Commissioner Trade Tax, UP Vs. Triveni N. L. Ltd. [72 VST 448 (All.)], Petrofils Co. Op. Ltd. Vs. The State of Gujarat [2008 GSTB 177] = , C.G. Glass Ltd. vs. the State of Gujarat [2008 GSTB 237] and Rama Newsprint and papers Ltd. (2011 GSTB 282], wherein plant and machinery embedded to earth were held as immovable property.

9.4 The applicant also made an alternative submission that presuming without admitting that bunds are civil structures, then also since bunds are directly used for the manufacture of salt which is exported. input tax credit is admissible to the respondent. The decision in the case of Safari Retreats Pvt. Ltd. Vs. Chief Commissioner of Central Goods and Services Tax and Others [67 GSTR 16 (Ori.)] has been relied in support of this submission. It is submitted that the applicant exports the salt manufactured with the help of bunds and therefore they being zero rated supplies, input tax credit and consequently refund is admissible to the applicant under the GST Acts.

9.5 It has also been submitted that the granting of refund of tax paid on purchases of goods used for exports is also in consonance with the national policy of avoiding tax burden on exported goods so as to permit trade and industry of the country to withstand global competition. It has been submitted that keeping this wider national interest in mind also, it is required to be held that the applicant is entitled to input tax credit and consequently refund of tax paid on the purchases of goods and procurement of services for the construction of bunds.

9.6 It is the submission of the applicant that the appellant department has erred in relying upon the submission of the applicant in the application for advance ruling for not falling in the exception relating to plant and machinery pertaining to land or building or any other civil structure, to contend that since the applicant has categorized it as immovable property, it is not entitled to input tax credit. It has been submitted that since the applicant is seeking input tax credit on the ground that bunds are used as plant and machinery in the manufacture of salt, it has to satisfy all the conditions for treating bunds as plant and machinery. It is for that reason that in the application submitted for advance ruling, apart from submitting that bunds qualify as plant and machinery as per the decided cases, it was submitted as to why it does not fall in the exception relating to land or building or any other civil structure. The applicant has submitted that unless the contention about applicability of principle of ejusdem generis for finding out the true meaning of civil structure used along with land and building in the exception clause giving explanation of plant and machinery is rejected, simply based on submission of the respondent as to why that exception clause is not applicable to its case, the appellant department has erred in contending that the respondent has accepted that bunds fall under the exception clause (i) of the explanation to section 17 of the GST Acts.

10.1 In the synopsis submitted at the time of personal hearing, it has been submitted that bunds are ‘plant and machinery’, inasmuch as they are directly used for production of salt and chemicals and use of bunds is undisputedly inevitable for processes like evaporation, crystallization, harvesting and the like.

10.2 it has been submitted that only because a plant and / or machinery was “constructed”, it would not fall under, the excluded category of clause (i) of explanation under Section 17. It has been submitted that plants and various machinery are also “constructed” and plant and machinery are also often permanently fixed or embedded to earth by foundation; and hence immovable property, but still they are considered and referred to as ‘plant and machinery” in commercial parlance. Circular No. 58/1/2002-CX dated 15.01.2002 of the Central Board of Excise and Customs (herein after referred to as the ‘CBEC’) has been relied in this context. It has been submitted that the input tax credit of plant and machinery is specifically allowed under section 17(5)(c) and (d) of the GST Acts and therefore the department’s case that any and every immovable property is excluded from scheme of input tax credit is incorrect and unjustified.

10.3 The applicant has submitted that section 17(5)(c) specifically allows input tax credit of works contract services for construction of plant and machinery. They referred the definition of the term “works contract” under Section 2(119) and submitted that works contract service necessarily involves construction of immovable properties, but such service is covered under the scheme of input tax credit by virtue of section 17(5)(c) and therefore also the department’s case that any activity in the nature of construction of any immovable property is excluded from the input tax credit scheme is incorrect and unjustified.

10.4 It has been submitted that “other civil structure” should be in the nature of land and building, because these two words precede the expression “any other civil structure” and therefore this expression takes colour from the preceding words. It has been submitted that civil structures like land and building only are excluded from input tax credit scheme and not civil structures which directly contribute to production and consequently supply of goods. It has been submitted that bunds are not immovable properties like land and building, and hence not excluded from input tax credit scheme only because they are “constructed” and they are in the nature of “immovable property”.

11.1 The appellant department has, vide letter dated 16.01.2020 inter-alia submitted that “bunds” also fall in the category of exclusion mentioned in section 17, being land, building or any other civil structure and shall not be considered as the apparatus, equipment and machinery. The judgement of Hon’ble High Court of Calcutta in the case of Singh Alloys & Steel Ltd. Vs. Assistant Collector of Central Excise [1993 (66) ELT 594 (Cal.)] has been relied wherein the terms ‘apparatus’, ‘appliance’, ‘equipment’, ‘machine’, ‘machinery’, ‘plant’ and ‘tool’ have been examined.

11.2 It has been submitted that the “bunds” are constructed by using the material like Soil, Terrazyme Chemical, HB Metal and LDPE Film etc. and therefore it may be classified as the Civil Structure and an immovable property from where manufacturing is being carried out with the harvesting of the raw salt and so therefore as per section 17(5) of the CGST Act, 2017, they shall not be eligible for  input tax credit on construction of “bunds” being immovable property.

12.1 In response to the aforesaid submission dated 16.01.2020 of the appellant department, the applicant vide letter dated 20.01.2020 has submitted that the judgement in the case of Singh Alloys & Steel Ltd. (supra) is in respect of old Modvat Credit Scheme under the Central Excise Rules, 1944 and it involves “chemicals” used for protecting the equipment. It has been submitted that the provisions of Modvat scheme were material different from the scheme of input tax credit under sections 16 and 17 of the CGST Act and it was nobody’s claim that the chemicals involved in the case before the Hon’ble High Court of Calcutta were in any way used for, or contributed to, the, manufacture of any goods. It has been submitted that the facts in the of Singh Alloys & Steel Ltd, were totally different but the principle of ejusdem generis is applied by the Hon’ble High Court for interpreting a general expression preceded by specific category of words.

12.2 The applicant has submitted that “bunds” are not a place (like land and / or building) from where manufacturing is carried out but with the help of which manufacturing activity is carried out; but bunds are admittedly and undisputedly crystallizers (plant and machinery) where raw salt is harvested and the goods in question. namely, salt and chemicals are produced. It has been submitted that the bunds” are not in the nature of an immovable property from where manufacturing is being carried out, but bunds are in the nature of a plant where manufacturing is carried out. Such immovable property with the help of which manufacturing is being carried out, is not excluded from input tax credit scheme, and such immovable property where manufacturing is actually carried out is quite different from immovable properties like land and building are used only for installation of a factory or for housing and protecting machineries, equipment etc., whereas manufacturing of salt and chemicals is actually undertaken by using bunds and therefore builds are actually contributing directly to manufacture of the goods

12.3 The applicant has requested to reject the appeal filed by the appellant department with all consequential benefit to the applicant.

FINDINGS :-

13. We have carefully gone through and considered the appeal and written submissions filed by the CGST department, written submissions and synopsis filed by the applicant, submission made at the time of personal hearing, Advance Ruling given by the GAAR and other material available on record.

14. As regards the submission of the applicant that the appeal authorization has been issued under Section 107(2) of the CGST Act, 2017, which is improper hence appeal filed by exercising the said authorization would be void and liable to be quashed, it is observed that the appeal in the present case has been filed in prescribed Form ARA-03 under Rule 106(2) of the Central Goods and Services Tax Rules, 2017. Review Order No. 02/2019-20 as well as the forwarding letter clearly mentions that the appeal is tiled under Section 100(1) of the CGST Act, 2017. Even the subject of the authorization letter refers to filing an appeal under sub-section (i) of Section 100 of CGST Act, 2017. Therefore, the present appeal does not become void merely on the ground of mention of Section 107(2) of the CGST Act, 2017 in authorizations letter.

15.1 The applicant bas submitted that it is engaged in manufacture arid supply of salt and bromine chemicals. It has been submitted that the salt manufactured by the applicant is required to be exported as pet condition and undertaking given to the Government, therefore the manufactured salt would be ‘zero rated supply’ in terms of the provisions of Section 16 of the IGST Act, 2017, hence input tax credit and consequently refund is admissible to the applicant under the GST Acts. In this regard, the provisions of Section 16 of the IGST Act, 2017 may be referred, which reads as follows :-

“SECTION 16. Zero rated supply. – (1) “zero rated supply” means any of the following supplies of goods or services or both, namely

(a) export of goods or services or both; or

(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

(2) Subject to-the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.

(3)… …. ….. ….”

15.2 Since the salt would be exported, the same would be considered as ‘zero rated supply’ and object to the provisions of section 17(5) of the CGST Act, 2017, credit of input tax may be availed for making such zero rated supplies. In view of the provisions of section 16 of the IGST Act, 2017. It is seen that these facts are not in dispute.

16.1 The main issue to be decided in the present case is whether the credit of input tax on goods and services used for making ‘bunds’ is admissible to the applicant or otherwise. In this regard, the issues that arise for consideration and decision are

(i) whether input tax credit is admissible on ‘bunds’ on the ground that the ‘bunds’ are indispensible in the process of manufacture of salt?

(ii) whether input tax credit is inadmissible on the ‘bunds’ on the ground that it is immovable property?;

(iii) whether ‘bunds’ are ‘plant and machinery’? ; and

(iv) whether ‘bunds’ are ‘any other civil structure’ as mentioned in clause (i) of explanation below Section 17 of the GST Acts ?

16.2 Before proceeding to examine these issues, the process of manufacture of salt and construction of ‘bunds, submitted by the applicant well relevant provisions of GST Acts may be referred.

16.3 The applicant has submitted the process of manufacture of salt and brine as follows :-

(i) Salt and Brine are produced from sea water which requires solar evaporation. For the purpose of manufacturing salt the applicant has to construct “Bunds”. which are also known as “crystallizers” wherein Salt gets deposited Due to atmospheric heat and solar evaporation, raw salt crystallize from sea water in the crystallizers within 40 to 45 days. Later on the raw salt thus deposited is harvested either manually or by machines,

(ii) In order-to produce industrial salt, the harvested salt in the form of wet crystals is washed in the washery plant with brine to remove insoluble matter as well as soluble impurities. The washery plant consists of steel structures in which the applicant has to install equipment like Belt conveyor, metallic screener, hopper, and lay the civil foundation at different heights as per process requirement.

(iii) After harvesting the raw salt, the remaining brine is discharged into the circuit area and stored in the Reservoir for conversion into “Bittern” which is used as raw material in the manufacture of bromine. In order to form such circuit the applicant requires “Bunds”. “Bunds” are prepared by sub-contractor by using the material like Soil, Terrazyme Chemical, HB Metal and LDPE film etc. The applicant is paying GST on procurement of works contract services and purchase of materials also, Without “bunds/ crystallizers” activity of manufacturing salt and bromine are not possible, Thereafter, the Bittern is transferred through pipeline into the Bromine Plant.

(iv) Thus “bunds” / “crystallizers” are an indispensible part of the apparatus used for manufacturing salt and bromine. It is in fact impossible to manufacture salt and bromine without bunds.

16.3 The applicant has submitted that process of construction of bunds and crystallizers is as follows :-

(i) Thu “bunds” / “crystallizers” channels are primarily made of dugged Soil. Such dugged soil is spread / stacked up to a height of 1.5 to 2.5 meters and after drying, it is rolled, compacted & dressed to a proper shape and slope to give it stability to withstand storage of huge quantity of water, which is essential to produce salt and bromine.

(ii) Since bunds require holding of huge quantity of water into it, it is necessary to make it solid enough, therefore while making these bunds, a mixture of Chemical namely Terrazyme, GSB metal, along with water is mixed into the dugged soil, a LDPE film Is also layed into it wherever required which gives sufficient strength to these bunds to hold such huge quantity of water and to rotate water into it to make raw material for producing Salt & Bromine.

(iii) These bunds/ crystallizers/ channels are also inter-connected with box culverts which are installed on rabble soling PCC foundation. The water into these crystallizers are charged through these box culverts and also discharged through the said box culverts into the channels to rotate the water into channels.

(iv) Once the Salt is formed into these crystallizers and the water gain desired level of degree, the remaining water is discharged through these box eulverts into the channels and from these channels, by rotating the discharged water, brine is made which is diverted into the Bromine plant via circuit to extract the bromine from it.

16.4 The relevant provisions related to input tax credit contained in Section 16 and 17 of the GST Acts are as follows :-

“SECTION 16. Eligibility and conditions for taking Input tax credit. –

(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

(2) … … … … …

(3) … … … … …

(4) … … … … …

SECTION 17. Apportionment of credit and blocked credits.

(1) … … … … …

(2) … … … … …

(3) … … … … …

(4) … … … … …

(5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:-

(a) … … …

(b) … … …

(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such foods or services or both are used in the course or furtherance of business.

Explanation.- For the purposes of clauses (c) and (d), the expression “construction “ includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

(e) … … …

(f) … … …

(g) … … …

(h) … … …

(i) … … …

(6) … … … … … …

Explanation. – For the purposes of this Chapter and Chapter VI, the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes –

(i) land building or any other civil structures;

(ii) telecommunication towers; and

(iii) pipelines laid outside the factory premises.”

‘Bunds’ are indispensible in the process of manufacture of salt

17.1 In support of the argument that credit of taxes charged on goods and services used for constructing bunds/ crystallizers is admissible, the applicant has submitted that the “bunds” / “crystallizers” are indispensible part of the manufacturing of salt and bromine and it is in fact impossible to manufacture salt and bromine without bunds. The applicant has referred to Section 16(1) of the GST Acts.

17.2 We find that sub-section (5) of section 17 of the GST Acts starts with non-obstane clause and will have overriding effect on the provisions of Section 16(1) of the GST Acts. Therefore,’ if the goods and/ or services are covered under sub-section (5) of Section 17 of the GST Acts, the input tax credit Shall be available.

17.3 it may also be pointed out here that credit of input tax may be availed for making zero rated supplies in view of the provisions of sub-section (2) of section 16 of the IGST Act, 2017. However, this provision in also subject to the provision of of sub-section (5) of section 17 of the CGST Act, 2017.

17.4 We therefore hold that the input-tax credit shall not be available on goods or services covered by sub-section (5) of section 17 of the GST Acts, even if the same are indispensible in the process of manufacture.

Whether input tax credit is inadmissible on the ‘bunds’ on the ground that it is immovable property.

18.1 The issue therefore arises whether the goods and services used by the applicant for construction of “bunds” / “crystallizers” are covered under sub-section (5) of section 17 of the GST Acts or otherwise.

18.2 ‘The works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service’ is covered under clause (c) of Section 17(5) of the GST Acts. ‘The goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business’ is covered under clause (d) of Section 17(5) of the GST Acts. It is seen from the process of construction of bunds/ crystallizers submitted by the applicant that works contract services as well as goods and services on applicant’s own account are used for construction of bunds / crystallizers, which are immovable property. The works contract services used by the applicant are not an input service for further supply of works contract service. Thus, the works contract service and goods and services used by the applicant for construction of bunds crystallizers are covered under clause (c) and (d) of Section 17(S) of the CGST Act, 2017. However, it is pertinent to note that the said clauses (c) and (d) covers the works contract services and goods and/ or service received for construction of immovable property, other than plant and machinery. Thus, even if the works contract service and goods and / or services are received for construction of immovable property, if such construction of immovable property is ‘plant and machinery’, the same would be outside the purview of clauses (c) and (d) of Section 17(5) of the CGST Act, 2017 and eligible for input tax credit. The question to be decided is whether the bunds / crystallizers can be considered as ‘plant and machinery’ oi not.

18.3 The applicant has submitted that the input tax credit cannot be denied on the ground that ‘bunds’ are immovable property, as machinery or equipment fixed to earth by foundation or structural support is specified as ‘plant and machinery’ for admissibility of input tax credit. They have referred to various decisions on this issue. However, in the said decision relied upon by the applicant, the issue before the Hon’ble Court or Tribunal was whether the plant and machinery embedded to earth were immovable property or otherwise, in the context of the provision of respective State Sales Tax Law / Value Added Tax Law. The issue under consideration in the present case is not whether or not input tax credit is admissible on immovable property. As already; noted, ‘plant and machinery’ would be outside the purview of clauses (c) and (d) of Section 17(5) of the CGST Act, 2017 and would be eligible for input tax credit. However, it is required to be examined whether the bunds / crystallizers can be considered as ‘plant and machinery’ or not.

Whether ‘bunds’ are ‘plant and machinery’

19.1 The expression ‘plant and machinery’ has been defined in the explanation below sub-section (6) of section 17 of the GST Acts, As per the said definition, ‘plant and machinery’ means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services” or both and includes such foundation” and structural supports. However, (i) land, building or any other civil structures; (ii) telecommunication towers; -and (iii) pipelines laid outside the factory premises, have been specifically kept outside the purview of the definition of the expression ‘plant and machinery.

19.2 The expression ‘plant and machinery’ is specifically defined in the GST Acts. In the explanation below section 17 of the GST Acts, the definition ‘plant and machinery’ uses the term ‘means’. As per the principles of interpretation of law laid down by the higher judiciary, the definition using the term ‘means’ has to be strictly construed to mean only what is stated therein, nothing more, nothing less. In this regard, the judgement of Hon’ble High Court of Kerala in the case of Kerala Public Service Commission Vs. State Information Commission, Kerala [2011 (272) E.L.T. 18 (Ker.)], may be referred, wherein it has been held as follows:-

“6. … … … … When the statutory provision defining a particular term says that the said term shall mean what is stated in that definition clause, it shall mean only that; nothing more, nothing less; for the purpose of the statute which carries that definition. When a statute says that a word or phrase shall “mean” – not merely that it shall “include” ~ certain things or acts, the definition is a hard-and-fast one, and no other meaning can be assigned to the expression than the one put down in definition. A definition is an explicit statement of the full connotation of a term. – See Punjab Land Development and Reclamation Corpn. Ltd. v. Presiding Officer [(1990) 3 SCC 682] and P. Kasilingam v. P.S.G. College of Technology [1995 Supp (2) SCC 348] rendered relying on Gough v. Gough [(1891) 2 QB 665 : 65 LT 110]. As noticed in S.N.College, the Legislature has the power to define a word even artificially. When a statute says that a word or phrase shall “mean” a particular thing, certain things or acts, that definition is a hard-and-fast one and no other meaning can be assigned to the expression than is put down in that definition. That definition is an explicit statement of the full connotation of a term.”

19.3.1 AS per the definition, the expression ‘plan and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support. The terms apparatus, equipment and machinery have not been defined in the GST Acts. Therefore, the natural or dictionary meaning of these terms may be taken into consideration.

19.3.2 In case of Singh Alloys & Steel Ltd, ‘(supra) relied upon by the appellant department, the issue under consideration of Hon’ble High Court was the definition of “inputs” under Rule 57A of the Central Excise Rules, 1944, which did not include machines, machinery, plant, equipment, apparatus, tools or appliances etc. In the said judgement, the terms apparatus, equipment and machinery defined in Mc-Graw Hill dictionary have been referred, which are as follows :-

Apparatus           –              A compound instrument designed to carry out a specific function

Equipment          –              One or more assemblies capable of performing a complete function.

Machinery           –              A group of parts or machines arranged to perform a useful function.

19.3.3 Similarly, in the case of Modern Malleable Ltd. Vs. Commissioner of Central Excise, Calcutta-II [2008 (228) ELT 460 (Tri, – Kolkata)], definitions of the term ‘apparatus’ given in different dictionaries have been referred, which are as follows:-

19.3.4 The applicant has stated that the judgement in the case of Singh Alloys & Steel Ltd. (supra) is not relevant as the same was in the context of MODVAT Credit Scheme under the Central Excise Rules; 1944. However, this argument is not acceptable, as the definition of ‘Apparatus’, ‘Equipment? and ‘Machinery relied in this judgement is based on different dictionaries and in the absence of any specific definition in statute, the dictionary meaning will be relevant for understanding the scope of these terms.

19.3.5 It is seen from the meaning of the terms ‘apparatus’, ‘equipment’ and ‘machinery’ as well as from the process of construction of bunds / crystallizers and process of manufacture of salt and brine submitted by the applicant that the ‘bunds’ are neither apparatus, nor equipment nor machinery. The bunds/ crystallizers cannot be termed as compound instrument designed to carry out a specific function. The bunds/ crystallizers can neither be termed as complex machine, device or system nor can ‘bund’ be termed as collection or set of materials, instruments, appliances or machinery designed for a particular use, Bunds/ crystallizers are not group or aggregate of instruments, machinery, tools, materials etc. having a particular function or intended for a specific use. Thus, the bunds / crystallizers are not ‘apparatus’. Further, the bund/ crystallizer is not one or more assemblies capable of performing a complete function. Therefore, the bund/ crystallizer cannot be termed as ‘equipment’. The bund/ crystallizer is not a group of parts or machines arranged to perform a useful function, Therefore, bund/ crystallizer cannot be termed as ‘machinery’. As the-bund/ crystallizer is neither apparatus, nor equipment and nor machinery, the same do not qualify to be termed as ‘plant and machinery 9 within the meaning of the said term defined in the explanation below Section 17(6) of the GST Acts.

19.4 The applicant has submitted that an essential component of plant and machinery is that it should be used for making outward supply of goods. However, we notice that the applicant has relied upon only part of definition of ‘plant and machinery’ which has been defined to mean apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both. As the ‘bunds’ are not covered in the first limb of the definition of ‘plant and machinery’ as ‘bunds’ are not apparatus, equipment or machinery, they cannot be considered to be covered in the said definition.

19.5 The definition of ‘plant and machinery’ given in the GST Acts is very specific. Therefore, when the ‘bunds’ are not covered in the said definition, the fact that the ‘bunds’ are essentially used in the manufacturing process would not make any difference and the ‘bunds’ would not get covered under ‘plant and machinery’ on this ground, as pleaded by the applicant.

19.6 The applicant has pleaded that plants and various machinery are also “constructed”. and plant and machinery are also often permanently fixed or embedded to earth by foundation, and hence immovable property, but still they are considered and referred to as ‘plant and machinery” in commercial parlance. They have referred to Circular No. 58/1/2002-CX dated ‘15.01.2002 of the CBEC. In this regard, it is seen that the said Circular was issued by the CBEC to clarify the issue relating to excisability and stage of excisability of plant and machinery assembled at site in view of various judgements of Hon’ble Supreme Court regarding non-excisability of immovable property. As the CBEC Circular has been issued in the context of provisions of the Central Excise Act, 1944, the same has no applicability per se in respect of GST Acts. Further, in the present case, it is not the case of the applicant that in order to construct ‘bunds’, apparatus, equipment and / or machinery is fixed to earth by foundation or structural support. Furthermore, when a specific definition of ‘plant and machinery’ is given in the statute, there arises no occasion for us to refer to commercial parlance or common parlance meaning of the phrase ‘plant and machinery’.

19.7 The applicant has submitted that the GST law has not clearly delineated whether the salt works, i.e. salt pans reservoirs and condensers etc. are covered under the meaning of plant and therefore inference has to be drawn from other legislations. The applicant has submitted that the Income Tax Act, 1961 clearly provides the treatment of Salt Works as ‘plant and machinery’ as the depreciation schedule under the Income Tax Act, 1961 covers Salt Works. However, as already discussed, a specific definition of ‘plant and machinery’ has been given under the GST Acts. Therefore, definition of ‘plant’ in the Income Tax Act. 1961 or treatment of Salt Works under depreciation schedule of the Income Tax Act, 1961 is not required to be adopted in the present case.

19.8 The applicant has cited several judgements in support of the contention that the bund/ crystallizer can be termed as ‘plant and machinery’. We have gone through these judgements.

(i) Scientific Engineering House (P) Ltd. Vs. Commissioner of income Tax, Andhra Pradesh [157 ITR 86 (S.C)]

In this case, the issue. before the Hon’ble Supreme Court was whether the acquisition of capital asset of technical knowhow in the shape of drawings, design, charts, plans, processing data and other literature etc., is depreciable asset or not (for the purpose of income Tux Act) ? In this Judgement, it was observed that under section 32 of the Income Tax Act, depreciation allowance is permissible in respect of certain assets specified therein, namely, buildings, machinery, plant and furniture owned by the assessee and used for the purpose of business while section 43(3) of the Income Tax Act defines ‘plant’ in very wide terms saying “plant includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purpose of the business”. In this context, Hon’ble Supreme Court decided whether technical knowhow in the shape of drawings, designs, charts, plans, processing data and other literature etc. falls within the definition of ‘plant.

(ii) Commissioner of Income Tax, Gujarat Vs. Elecon Engineering Co, Ltd. [1974 96 ITR 672 Guj,]

In this case also, the issue before the’ ‘Hon’ble High Court was whether drawings and patterns received by an assessee from a foreign company under a collaboration agreement can be said to be “plant” on which depreciation is allowable under section 32 of the Income Tax Act, 1961.

In the present case, the definition of ‘plant and machinery’ given in Section 17 of the GST Acts is different than the definition of ‘plant’ under Income Tax Act, which was under consideration before the Hon’ble Supreme Court in the case of Specific Engineering House (P) Ltd. (supra) and before the Hon’ble High Court in the case of Elecon Engineering Co. Ltd. (supra). The subject matter of dispute (bund) in the present case is also different.

(iii) Jayaswal Neco Ltd. Vs. Commissioner of Central Excise, Raipur [2015 (319) E.L.T. 247 (S.C.)]

In this case, the Hon’ble Supreme Court examined the definition of ‘capital goods’ given in Rule 57Q of the Central Excise Rules, 1944 and in that context examined whether the Railways Tracks installed within plant would be considered as ‘capital goods’

(iv) Commissioner of Central Excise, Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. [2010 (255) E.L.T. 481 (S.C.)]

In this case also, the Hon’ble Supreme Court examined the definition of ‘capital goods’ given in Rule 57Q of the Central Excise Rules, 1944 and in that context examined whether the credit was admissible on Steel Plates and M.S. Channels used in fabrication of chimney for diesel generating set. In the present case, the definition of ‘Plant and machinery’ given in Section 17 of the GST Acts is different than the definition of ‘capital goods’ – under Central Excise Rules, 1944, which was under consideration before the Hon’ble Supreme Court in the case of Jayaswal Neco Ltd. (supra) and in the case of Rajasthan Spinning & Weaving Mills Ltd.(supra). The subject matter of dispute (bund) in the present case is also different.

(v) The State of Gujarat Vs. Pipavav Defence and Offshore Engineering Company Ltd. [2017-TIOL-1018-HC-AHM-VAT]

In this case, the Hon’ble High Court examined whether ‘Dry Dock and Fit Out Berth’ can be categorised as ‘capital goods’ as per definition given under section 2(5) of the Gujarat Value Added Tax Act, 2003, according to which, “‘Capital Goods” means plant and machinery (other than plant and machinery) meant for use in manufacture of taxable goods and accounted as capital assets in the books of accounts”. The expression ‘plant and machinery’ was not defined in the Gujarat Valued Added Tax Act, 2003. In the context of the said definition of ‘Capital Goods’, Hon’ble High Court held that Dry Dock and Fit Out Berth ate plant / capital goods.

In the present case, the definition of ‘plant and machinery’ has been specifically given in Section 17 of the GST Acts and the said definition is different than the definition of ‘capital goods’ given under the Gujarat Value Added Tax, 2003, which was under consideration before the Hon’ble High Court in the case of Pipavav Defence and Offshore Engineering (supra). The subject matter of dispute (bund) in the present case is also different.

As held by Hon’ble Apex Court in the case of Collector of Central Excise, Calcutta Vs. Alnoori Tobacco Products [2004 (170) ELT 135 (SC)], circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases; that disposal of cases by blindly placing reliance on a decision is not proper. Therefore, the aforesaid judgements relied upon by the applicant are found applicable in the present case.

19.9 In view of the foregoing, we hold that ‘bund’ / crystallizer’ are not covered within the definition of ‘plant and machinery’ given under Section 17 of the GST Acts.

Whether ‘bunds’ are ‘any other civil structure?

20.1 As the bunds/ crystallizer do not fall within the main part of the definition of ‘plant and machinery’ given in explanation under Section 17 of the GST Acts, it is not required to examine the exclusion part of the said definition. However, since the exclusion clause (i) (i.e. land, building or any other civil structures) and specifically the phrase ‘any’ other civil structures’ has been referred to by the appellant. department as well as by the applicant, the same has been examined to the extent it is relevant for the present case.

20.2. It has been pleaded by the applicant that principle of ejusdem generis should be applied in interpretation of the phrase ‘any other civil structures’ and the said phrase should be restricted to immovable property in the nature of land and building i.e. property which is as such only a place where the business is carried on or where manufacturing activity is undertaken.

20.2.2 In this regard, it is seen that the phrase ‘any other civil structures’ needs to be understood in the context of the definition of ‘plant and machinery’, which is kept outside the purview of blocked credit under clauses (c) and (d) of section 17(5) of the GST Acts. As per the said definition, ‘plant and machinery’ means apparatus, equipment, and machinery fixed to earth by foundation or structural support. The foundation or Structural support, which have been used to fix the apparatus, equipment, and machinery to earth, may be in the nature of civil structure, but such foundation and structural supports have been specifically included in the main part of the definition of ‘plant and machinery’. When the exclusion clause (i) excludes ‘land, building or any other civil structures’ from the purview of the definition of ‘plant and machinery’, the phrase ‘any other civil structures’ naturally refers to all other civil structures, other than foundation and structural supports used to fix the apparatus, equipment, and machinery to earth.

20.2.3 The above view is strengthened when the definition of ‘plant and machinery’ is seen in the context of clauses (c) and (d) of section 17(5) of the GST Acts. As per said clause (c), credit of input tax charged on works contract services, when supplied for construction of an immovable property (other than plant and machinery), is not admissible. ‘Works Contract’ has been defined under section 2(119) or the GST Acts to mean a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Thus, the phrase ‘any Other civil structures’ mentioned in the exclusion clause (i) of the definition of ‘plant and machinery’ would mean all other civil structures, other than foundation and structural supports used to fix the apparatus, equipment, and machinery to earth.

20.2.4 The applicant has relied upon the judgement of Hon’ble Supreme Court in the cases of Amar Chandra Chakraborty Vs. Collector of Central Excise [AIR 1972 SC 1863] and Siddeshwari Cotto Mills (P) Ltd. Vs. Union of India [AIR 1989 SC 1019]. In the case of Siddeshwari Cotton Mills (P) Ltd., Hon’ble Supreme Court inter-alia held that the preceding words in the statutory provision which, under this particular rule (ejusdem generis) of construction, control and limit the meaning of the subsequent words must represent a genus or a family which admits of a number of species or members, If there is only one species it cannot supply the idea of a genus. A reference may also be made to the judgement of Hon’ble Supreme Court in the case of Assistant Collector of Central Excise Vs. Ramdev Tobacco Company [1991. (51) ELT 631 (S.C.)] (wherein the judgement of Amar Chandra Chakraborty was also referred), wherein it has been held as follows

“6. The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristic and constitute a genus) is required to be determined. By the application of this rule the scope and ambit of the general words which follow certain specific words constituting a genus is restricted to things ejusdem generis with those preceding them, unless the context otherwise requires. General words must ordinarily bear their natural and larger meaning and need not be confined ejusdem generis to things previously enumerated unless the language of the statute spells out an intention to that effect. Courts have also limited the scope of the general words in cases where a larger meaning is likely to lead to absurd and unforeseen results. To put it differently, the general expression has to be read to comprehend things of the same kind as those referred to by the preceding specific things constituting a genus, unless of course from the language of the statute it can be inferred that the general words were not intended to be so limited and no absurdity or unintended and unforeseen complication is likely to result if they are allowed to take their natural meaning. The cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language of the statute gives a different indication or such meaning is likely to lead to absurd results in which case their meaning can be restricted by the application of this rule and they may be required to fall in line with the specific things designated by the preceding words. But unless there is a genus which can be comprehended from the preceding words, there can be no question of invoking this rule. Nor can this rule have any application where the general words precede specific words.”

[emphasis supplied]

Similarly, in the case of Commissioner VAT Vs.  Taneja Mines Pvt. Ltd. [2011 (273) E.L.T. 228 (Del.)], Hon’ble High Court of Delhi held as follows :-

“16. As regards the applicability of the principle of ejusdem generis sought to be pressed into service by the Department, it would be trite that the said principle is not an inviolable rule of law. It is only in the absence of any indication to the contrary that it may be pressed into service. When Entry No. 45 is absolutely clear and unambiguous, the rule of ejusdem generis can have no application. As held in Siddeshwari Cotton Mills (P) Ltd. (supra) and Grasim Industries Ltd. (supra), the said rule has to be applied with caution and not pushed too far. The rule reflects an attempt to reconcile incompatibility between the specific and general words and applies only where the context of the enactment does not require restricted meaning to be attached to the words of general import. But, as stated above, a note of caution has been sounded by the Apex Court in this regard, namely, that the rule is to be applied with care and caution and in the absence of any indication to the contrary. In the instant case, in our view, the said rule of ejusdem generis is wholly inapplicable.”

20.2.5 In the present case, the natural meaning of the phrase ‘any other civil structures’, as discussed herein above, is compatible with clauses (c) and (d) of Section 17(5) and definition of ‘plant and machinery’ given under Section 17 of the GST Acts. Even otherwise, the specific words ‘land’ and ‘building’ preceding general words ‘any other civil structures’ do not constitute a genus.

20.2.6 Therefore, the bunds constructed by mixing chemical Terrazyme, GSB Metal, Water with dugged aud laying LDPE film wherever required, can be said to be covered under ‘any other civil structures’.

20.3 The applicant has submitted that even if bunds are held as civil structure, input tax credit is admissible. They relied on the judgement of Hon’ble High Court of Orissa in the case of Safari Retreats Pvt. Ltd, and Another Vs. Chief Commissioner of Central Goods and Services Tax and Others [67 GSTR 16 (Ori.) = 2019 (25) GSTL 341 (Ori.)]. In that case, the issue before the Hon’ble High Court was whether clause (d) of sub-section (5) of section 17 of the GST Acts is applicable in the case of construction of immovable property (shopping mall) intended for letting out for rent. In this regard, it has been seen that the said judgement has not dealt with the definition of ‘plant and machinery’ given below section 17 of the GST Acts, which is under consideration in the present case. In any case, Special Leave Petition (Civil) No. 26696 of 2019 has been admitted by the Hon’ble Supreme Court against the said judgement of Hon’ble High Court of Orissa. As held by Hon’ble Supreme Court of India in the case of Union of India vs. west Coast Paper Mills Ltd. [2004 (164) E.L.T. 375 (S.C.)], once an appeal is filed before the Supreme Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy; that the subject matter of the lis unless determined by the last Court, cannot be said to have attained finality; that grant of stay of operation of the judgment may not be of much relevance once this Court (Supreme Court) grants special leave and decides to hear the matter on merit. Therefore, judgment in the case of Safari Retreats Pvt. Ltd. (supra) is not applicable in the present case.

21. The applicant has submitted that the granting of refund of tax paid on purchases of goods used for exports is also in consonance with the national policy of avoiding tax burden on exported goods so as to permit trade and industry of the country to withstand global competition. In this regard, suffice it to say that the refund of input tax on zero rated supplies is admissible in accordance with the provisions of GST Acts.

22. In View of foregoing, we modify the Advance Ruling No. GUJ/GAAR/R/19/2019 dated 11.09.2019 by holding that-

‘Bunds’ constructed by M/s. Satyesh Brinechem Private Limited, Ahmedabad [GSTIN 24AAUCS2572G1Z1) are not ‘plant-and machinery within the definition of the said term under Section 17 of the GST Acts, and therefore, in view of clauses (c) and (d) of. Section 19(5) read with explanation below Section 17 of the GST Acts, Input Tax Credit in respect of works contract service or goods or services used in construction of ‘bunds’ is not admissible to M/s. Satyesh Brinechem Private Limited, Ahmedabad.