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TMI Blog2019 (11) TMI 1697X X X X Extracts X X X X X X X X Extracts X X X X ..... d the connected machineries, by itself will loss its identity as 'steel and cement', but it gets merged as a final plant with a specific purpose. The 'silos' cannot be identified as mere 'civil structure' falling within the negative list under S.R.O. 324/2005. The 'silos' which forms integral part of the machinery has the real characteristics of a plant or machinery, mentioned in the definition contained in Section 2(x) of the K.V.A.T. Act, which makes them to fall within the category 'capital goods' for which input tax credit can be allowed. The revision petitioner/state is not in a position to establish with any substantial credence that the view taken is in any manner illegal, erroneous or improper, warranting interference by this court in exercise of the revisional jurisdiction - Tax Revision Cases deserve no merit and is dismissed. - O.T. Rev. Nos. 60 and 63 of 2017 - - - Dated:- 12-11-2019 - C.K. Abdul Rehim and Amit Rawal, JJ. For Appellant: V.K. Shamsudheen, Sr. Government Pleader For Respondents: K.B. Muhammed Kutty, Sr. Advocate, K.M. Firoz and M. Shajna ORDER C.K. Abdul Rehim, J. 1. An interesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd machinery and therefore it cannot be considered as civil structure, included in the negative list. Accordingly the claim made by the assessee for input tax credit was allowed in total. It is aggrieved by the said decision the State had preferred these revision petitions. 5. Section 11 of the KVAT Act provides for allowing input tax credits. It provides that, a dealer liable to pay tax under sub-section (1) of Section 6 shall be eligible for input tax credit, subject to the restrictions provided therein. Sub-section (2) specifies that, with respect to capital goods purchased by the dealer, where the value of the goods exceeds such limits as may be prescribed, input tax credit will be allowed over a period of three years from the date of commencement of commercial production or from the date on which the capital goods are put to use, whichever is later, in such manner and subject to such conditions as may be prescribed. The term 'capital goods' is defined under Section 2 (x) as follows. Capital goods means plant, machinery, equipments, including pollution/quality control, lab and cold storage equipments used in manufacture, processing, packing or storage of goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which are not coming within the negative list under S.R.O. 324/2005. Since the definition of 'capital goods' under Section 2 (x) covers the plant, machinery, equipments etc, tax paid for purchase of those goods are entitled for set-off against output tax payable. We do not think that the revision petitioners/State can raise any valid contentions with respect to those items since those items are indisputably part of machineries which are not taken out from the definition of 'capital goods' through the negative list notified under S.R.O. 324/2005. Contention with respect to those goods is that, those are 'building materials' and 'factories' used in the construction activities, made out of steel and cement. But from the very reading of description of those goods extracted as above, it is clear that those are machineries intended for various purposes in the activity carried on by the assessee, with respect to which they were registered as dealer under the K.V.A.T. Act. Merely because the components used for manufacture of those items includes 'steel and cement' it cannot be termed that those items are building materials and fixtures used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed that, item No. 7 in SRO 324/2005 excludes only the machineries used in connection with supply of services. Other machineries excluded are specifically mentioned as, all kinds of cranes, earth movers, JCB Excavators, Road rollers, Concrete Mixing Machineries. Those 6 types of machineries specifically contained in SI. No. 7 in S.R.O. 324/2005, can no doubt be said as machineries connected with construction activities or infrastructure in the industry. In other words, those are machineries which can be used in supply of labour and services. But it was observed that, the 'silo' and connected machinery is a distinct plant having specific industrial function and will not fall within item No. 7 in the negative list. Contention raised in the present revision petitions is mainly that, even if the item 'silo' and connected installations will not come within the purview of item No. 7 of S.R.O. 324/2005, it will fall within the ambit of item No. 2 in S.R.O. 324/2005, which is 'civil structure' and 'immovable goods'. The Tribunal had referred to the dictionary meaning of the term 'plant', which provides, whatever apparatus used by a business man for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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