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TMI Blog2024 (10) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... WHEREAS proceedings on the same issue had already been commenced by the Gurugram Zonal Unit of the DGGI on 06.03.2019 which later culminated into Show Cause Notice dated 09.10.2020. Thus 'KBPL' has suppressed the material facts from the Authority of Advance Ruling. It is clear that M/s KBPL had mis-declared the facts before the Authority for Advance Ruling for obtaining the ruling; that the Appellant had filed the instant appeal before this authority (Appellate Authority for Advance Ruling); that thereafter informed the AAR about such mis-declaration of facts; that on being informed by the Appellant, the AAR had declared the Ruling to be VOID ab initio in terms of powers given under Section 104 of the Act. Since Ruling given has been held Void ab initio by the AAR, the appeal filed by the Appellant appears infructuous and merits to be dismissed. The appeal filed by the Commissioner, CSGT, Rohtak is dismissed as Infructuous. - SH. MANOJ KUMAR SRIVASTAVA, AND SH. ASHOK KUMAR MEENA, IAS, MEMBER, Represented By: Ms. Sofia Martin Joy, Commissioner, CGST, Rohtak (Haryana) ( Passed by Haryana Appellate Authority for Advance Ruling under Section 101 (1) of the Haryana Goods and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTS OF THE CASE: 1.1 M/s KSC Buildcon Private Limited (hereinafter also referred to as KBPL in short) are holding GST registration in Haryana State vide GSTIN-06AAECK5780G1ZF and their principal place of business is at 1st floor, near Kajal Nursing Home, KSC Tower, Circular Road, Meham Gate, Bhiwani, Haryana-127021. 'KBPL' are engaged in supply of goods as well as services. 1.2 The Department of Mines Geology, Govt. of Haryana is responsible for systematic development [exploration and, exploitation] of the mineral resources in the State. It operates the stone mines through Haryana State Industrial Infrastructures Corporation (HSIIDC), a public sector undertaking. 1.3 HSIIDC awarded a contract dated 27.07.2017to M/s KBPL for supply of machinery with manpower for excavation of stones at its (HSIIDC's) mining project at village Khanak, Tehsil Tosham, distt. Bhiwani under various terms and conditions as mentioned in the said Contract: 1.4 In the aforesaid gamut of facts and terms of Contract, M/s KBPL filed an application on 17.01.2020 under Section 97 of the CGST/SGST Act, 2017 seeking advance ruling from the Authority for Advance Ruling, Panchkula (Haryana)[AAR] on the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2017 and the corresponding State Tax notification under HGST Act, 2017, the work carried by the applicant is a Composite supply of work contract involving pre dominantly earth work provided to a Government Entity and thus attract 5% GST-(2.5% CGST +2.5% HGST). Thus, the Serial No. 3 of Notification No. 31/2017 Central Tax (Rate) dated 13.10.2017 under the CGST Act, 2017 is applicable to the applicant. 4. PRAYER OF 'APPELLANT': a) Set aside/modify the impugned advance ruling passed by the Authority for Advance Ruling as prayed above; b) Grant a personal hearing; and c) Pass any such further or other order(s) as may deem fit and proper in the facts and circumstances of the case. 5. GROUNDS OF APPEAL: The Ruling given by the AAR, Panchkula was appeared improper, illegal and unsustainable on the following grounds of appeal which are in the alternative, independent of and without prejudice to each other: 5.1 AAR has recorded a factually incorrect finding that Respondent's activities constitute a composite supply under Works contract: 5.1.1 It is submitted that concessional rate of tax under Sl. No. 3 (vii) of Notification No. 11/2017-CT(R), dated 28.06.2017 as amended by N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssional rate of tax under Sl. No. 3 of Notification No. 11/2017-CT(R) dated 28.06.2017 as amended by Notification No. 31/2017-CT(R) dated 13.10.2017. The Advance Ruling of the AAR is, therefore, liable to be set aside on this ground itself. 5.2 The AAR failed to appreciate that the nature of the respondent's activities is renting of machinery classifiable under Heading No. 9973 (Group-99731) 5.2.1 It is submitted that while applying for tender, M/s KBPL had quoted the rate of Rs. 41 per MT in response to the said tender and they were shortlisted as successful bidder as their quoted rate i.e. Rs. 41 per MT (inclusive of all taxes) was lowest and accordingly, they were issued work order. They entered in to agreement dated 27.07.2017 with HSIIDC. The scope of work as per the said agreement reads as follow: Whereas the Employer is desirous that the contractor shall rent the various mining machineries with manpower to produce 5 lakh Metric Ton (MT) Stones from port of its Mining Project of HSIIDC at village-Khanak, Distt.-Bhiwani, Haryana. 5.2.2 As is evident, the basic intent and purpose of executing the agreement is to hire mining machinery and equipment along with manpower. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clay. Hence, it was held by the AAR that work order qualifies for benefit under serial No. 3 of Notification No. 39/2017-I.T. (Rate) being composite supply of works contract. Relevant paras of the order are reproduced below: 12.1 The term Earth Work has not been defined under any GST provisions. The Webster Dictionary defines Earth Work as an embankment or construction made of earth specially one used as a field fortification. The Collins Dictionary defines Earth Work as excavation of earth, as in engineering construction; a fortification made of earth. The Wikipedia defines Earth Work as Earth work are engineering works through the processing of parts of earth surface involving quantities of soil or unformed rocks. After going through different definitions of earth work, we find that Bulk earth works include the removal, moving, or adding Large Quantities of soil or rock from a particular area to another. They are done in order to make an area of suitable height and level for a specific purpose. 12.2 It is evident that the work order is for supply of services with material. It is also seen from the work order that the first four part of the work order is related with clearing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. Hence, it is liable to be set aside. 6. RECORD OF PERSONAL HEARING: Smt. Sophia Martin Joy, Commissioner, CGST Rohtak, the 'Appellant' appeared for personal hearing on 19.06.2024 through virtual mode. She informed that investigation had already been initiated by DGGI on the same issue much before filing of application for advance ruling and that the AAR has already held its earlier Ruling as Void ab initio. 7. DISCUSSIONS AND FINDINGS: 7.1 We have gone through the records of the case and considered the submissions made by the 'Appellant' in the grounds of appeal as well as at the time of the personal hearing. 7.2 Briefly stated, M/s KSC Buildcon Private Limited (herein after referred to as 'KBPL') approached the Advance Ruling Authority on the question- Whether the Serial No. 3 of Notification No. 31/2017-Central Tax (Rate) dated 13th October, 2017 issued under the GST Act, being Composite supply of work contract as defined in clause 119 of Sec-2 of the CGST Act, 2017, involving pre-dominantly earth work i.e. constituting more than 75% of the value of work in contract provided to Central Government, State Government, Union Territory, Local authority, a g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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