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TMI Blog2019 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is that there is transfer in the form of goods since the agreement has described it as providing PVC chairs on stainless steel framework . One has to look at the work description as such extracted herein above as available in the Annexure attached to the agreement. The description of the work as enumerated to the Department by the awarder also assumes significance - the Tribunal has correctly answered the question based on the various facts as found in the agreement and answer the question, though on facts, in favour of the assessee and against the Revenue. Revision dismissed. - O.T. Rev.No.176 of 2014 - - - Dated:- 21-2-2019 - MR K. VINOD CHANDRAN AND MR ASHOK MENON, JJ. For The Petitioner : ADV. GOVERNMENT PLEADER For The Respondent : ADVS. SRI. K. N. SREEKUMARAN, SRI. N. SANTHOSHKUMAR AND SRI. P. J. ANILKUMAR (A-1768) ORDER Vinod Chandran, J . The issue arising in the above revision is basically on facts; but, however, various decisions have been placed on record by learned Senior Government Pleader Sri.V.K.Shamdudheen, which requires us to consider the question as to whether the specific contract entered into by the assessee he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision to those works contracts in which there is transfer effected, not in the form of goods. Indian Hume Pipe Co. Ltd. was a case in which there was a pipeline contract, which, as held by the Hon'ble Supreme Court, is a works contract, but the transfer in the form of goods. 6. Sri.Sreekumar, learned Counsel for the assessee, however, relies on the decision of the Hon'ble Supreme Court in Kone Elevator India Pvt. Ltd . v . State of Tamil Nadu Ors . [ ( 2014) 22 KTR 371 (SC) ]. 7. Sri.Shamsudheen sought to distinguish Kone Elevator India Pvt. Ltd . [ ( 2014) 22 KTR 371 (SC) ] on the ground that the issue therein was installation of a lift requiring very skilled operations and involves fitting of various components, both mechanical and electrical as also fabrication work. The complex work involved would commend an interpretation of that being a works contract, where transfer is not in the form of goods. However, in the present case it is essentially a transfer in the form of goods, as can be seen from B.Narasamma . 8. As was argued, EDRSF Association specifically looked at a contract which provided for fabrication and installation of rolling shutte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter proceeded to state about the major component facet and how the skill and labour employed for converting the main components into the end product was only incidental and arrived at the conclusion that it was a contract for sale. The principal logic applied, i.e., the incidental facet of labour and service, according to us, is not correct. It may be noted here that in all the cases that have been brought before us, there is a composite contract for the purchase and installation of the lift. The price quoted is a composite one for both. As has been held by the High Court of Bombay in Otis Elevator (1969) 24 STC 535 (Bom), various technical aspects go into the installation of the lift. There has to be a safety device. In certain States, it is controlled by the legislative enactment and the rules. In certain States, it is not, but the fact remains that a lift is installed on certain norms and parameters keeping in view numerous factors. The installation requires considerable skill and experience. The labour and service element is obvious. What has been taken note of in Kone Elevators (2005) 4 RC 318, is that the company had brochures for various types of lifts and one is requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cteristics of works contract are satisfied. Thus analysed, we conclude and hold that the decision rendered in Kone Elevators (2005) 140 STC 22 (SC); (2005) 4 RC 318 does not correctly lay down the law and it is, accordingly, overruled . We are of the opinion that the above dictum squarely applies to the facts of the present case also. 11. Sri.Shamsudheen, however, has sought to rely on the decisions in Indian Hume Pipe Co. Ltd. and B.Narasamma. In Indian Hume Pipe Co. Ltd. , the contract was of laying pipelines and the claim was of works contract in which the pipe lines were laid, with jointing materials, valves anchor blocks etc., making the transfer to be not in the form of goods. However, the Hon'ble Supreme Court found that there is a divisible contract as found by the fact finding authorities and the High Court. The contract was of two parts, one of supply of pipes, valves etc. and that of labour and services involved in laying them. The Assessing Authority had scrutinised the agreement and returned a finding of fact that manufacture and supply of PVC pipes, jointing materials specials, valves, anchor blocks, etc. do not fall within the scope of buildings, bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitute a manufacturing process and no new commodity is produced before incorporation into the works . It was found that bars and rods which were used for reinforcing the concrete had been joined together, loosely with binding wires, without hampering the elasticity of the steel bar/road. The steel reinforcement rods and bars are subjected to only a bending at its end after cutting off to the required size. The above facts, coupled with the question of the said issue having come under the CST Act, persuades us to find that the dictum laid down is quite distinguishable on the facts herein; especially since the rods and bars were used in the works without any work being carried out on it. The Hon'ble Supreme Court emphasised the fact of the steel bars being embedded in the works as it is, without loosing its identity and on accretion in the works, there occurring a transfer in the form of goods. The Court negatived the contention of the State that the transfer being of the building itself the same has to be deemed to be a transfer not in the form of goods. The Court noticed the decisions in Builders Association of India Vs. Union of India [(1989) 2 SCC 645] and Gannon Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the outer end of pipe with stainless steel flange is also included. 86% of PAC of work involves fabrication and 14% involves supply of poly propylene chair. Hence the said work may be treated as a work contract rather than supply order . 14. At the outset it has to be emphasised that it is a composite contract of supply of materials and labour. The work is of supply of materials which are to be fabricated in accordance with the specifications and measurements as stipulated by the awarder, attached to the plastic moulds of seats and fixed in the stadium. Going by the description of the work as also the classification of the different works involved, 86% involves fabrication and 14% involves supply of poly propylene chair which are also fixed in the fabricated steel frames. Definitely we have to come to the conclusion that the transfer is not in the form of goods. The goods in the form of stainless steel sheets are cut to size and fabricated into frames to which is fixed the seating element made of PVC, which as stand alone cannot be used as seats or sold as such in the market. 15. As was noticed initially, in this case the State does not contest that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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