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TMI Blog2020 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 528 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA. BRIEF FACTS OF THE CASE 1. M/s. Vijay Baburao Shirke (herein after referred to as the "Respondent") is a proprietorship firm with GSTIN number 27ACMPS4462Q1ZM and registered address at 72-76, Industrial Estate, Mundhwa, Pune, Maharashtra - 411036. He inter-alia owns horses and is engaged in participation of horse races organized by the Royal Western India Turf Club (RWITC) located in Mumbai/Pune and also by the other race clubs in India. 2. The RWITC conducts horse races at Mumbai & Pune as per the schedule prescribed in its yearly Prospectus and invites race horse owners to participate in the race. The prospectus contains certain terms and conditions, which are applicable to all the race horse owners, who intend to participate in the race. One of the conditions is that the willing race horse owners, who intend to participate in the race, has to pay Entry Fees to RWITC. Apart from this, there are also certain conditions, viz. certificates in respect of the health of the participating horses from the regulatory or health authorities, which need to be satisfied for participating in the race. The Entry Fees are paid by the horse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019. 6. The Appellant, inter-alia, submitted that in pursuance to an oral enquiry made from the concerned officer of The Maharashtra Appellate Authority for Advance Ruling for Goods and Services Tax, it appeared that the separate application for COD in respect of the Revenue ought to be filed. 7. They, further, submitted that the crucial facts of this case were brought to the notice of the Appellant by the Additional Director, DGGI, Pune Zonal Unit vide letter dated 28.11.2019. It took considerable amount of time to come to the conclusion that an appeal is required to be filed against the impugned advance ruling order. Also, due to the nuances to the newly rolled out GST law, there has been a delay in filing this appeal. 8. The Appellant, therefore, prayed that based upon the totality of the circumstances mentioned above, this Hon'ble Maharashtra Appellate Authority for Advance Ruling for Goods and Services Tax, may consider the prayer of the applicant in granting the condonation for delay in filing the present appeal amounting to only 30 days for the justice and equity. They further submitted that on the other hand, if condonation of the above said delay was denied, it would se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment as provided under Section 73A(2) of the Finance Act, 1994 as well as Section 76 of CGST Act, 2017, however, he had discharged the service tax/GST liability partly by cash and partly by utilizing CENVAT credit/ITC; that he had availed CENVAT credit/ITC of the service tax/GST levied on the charges paid to the horse trainers and as well as the Entry Fees paid to the RWITC for allowing his horses to participate in the race; that the services provided by the trainers by way of training given to his horses, and services provided by RWITC by way of allowing his horses to participate in race do not qualify as "input services", as the said services are not used for the provision/supply of any taxable services; that Mr. V. S. Hasolkar, Vice President, Finance and Accounts of Shirke Group of Companies, was authorized to represent Mr. Vijay B. Shirke, who was examined under Section 83 of Finance Act 1994 read with Section 174 of the CGST Act, 2017 and his statement was recorded on 25.06.2019 and 03.07.2019; that Shri Hasolkar in his statement dated 03.07.2019, inter-alia, stated that the prize money/stakes, earned by way of winning or getting place in a race is not a consideration for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money/stakes are not being given for the participation in the race, but for the winning or getting a place in the race. (iv) that receiving prize money/stakes is a consequence of chance, skill and circumstance, therefore, there is no certainty in this regard and hence, the prize money/stakes would not be treated as 'consideration' against the owners' participation in the race. 14. The Appellant further submitted that in view of the above submissions and contentions, it is clear that the participation of the owners in horse race is not a service rendered to RWITC and the prize money/stakes is not a 'consideration' paid to the owners by RWITC for provision of any services; that, this activity does not fall under clause (a) of Section 7(1) CGST Act, 2017, as the essential ingredients of supply is missing in the activity undertaken by the Respondent by way of making his horse participate in the race as the Respondent is not getting any consideration against this very activity, i.e. participation in the horse race events. Hence, the Appellant submitted that the activity undertaken by the Respondent would not be considered as 'Supply' under the CGST Act, 2017. 15. The Appellant, fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant-Respondent, the facts related to the initiation of the enquiry/investigation against the Applicant-Respondent in the same issue as that raised by the Applicant-Respondent in his advance ruling application filed before AAR, could not be brought to the knowledge of the AAR. 18. The Appellant cited the case of Gurdeep Singh Sachar (CPIL stamp No.22 of 2019) = 2019 (6) TMI 1008 - BOMBAY HIGH COURT, wherein the Hon'ble Bombay High Court observed as under:- 'In the instant case, admittedly, there is no dispute that the amounts pooled in the escrow account is an 'actionable claim', as the same is to be distributed amongst the winning participating members as per the outcome of a game. But, as held hereinabove since the activities of the respondent No.3 do not amount to lottery, betting and gambling, the said actionable claim would fall under Entry 6 of the Schedule III under Section 7 (2) of CGST Act. Therefore, this activity or transaction pertaining to such actionable claim can neither be considered as supply of goods nor supply of services, and is thus clearly exempted from levy of any GST. ...................... The scope of definition of 'consideration' extends only in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law and hence, needs to be upheld. The Honorable Advance Ruling Authority ('ARA') has passed a detailed and cogent order. The said order does not suffer from any infirmity or illegality. Therefore, the present appeal, being devoid of any merit, is liable to be rejected. The Present Appeal is time barred 24. The appellant-department has filed the present appeal along with application of condonation of delay for seeking condonation of thirty (30) days in filing the present appeal. The reason stated by the appellant-department for the said delay was that the crucial facts of this case were brought to the notice of the appellant-department by the Deputy Director, DGGI, Pune Zonal Unit vide letter dated 28.11.2019 and accordingly, the department has taken considerable time to decide whether the appeal is required to be filed or not. The appellant-department further stated that due to the nuances to the newly rolled out GST law also caused a delay in filing the present appeal. 25. The respondent submits that the above reasoning of the appellant-department is vague and absurd for the reasons stated infra. 26. First, Section 100 of the CGST Act, 2017 speaks about the filing of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y; equally there would be cases where the Court must exercise its discretion against the applicant for want of any of these ingredients or where it does not reflect 'sufficient cause' as understood in law. The expression 'sufficient cause' implies the presence of legal and adequate reasons. The words 'sufficient' means adequate enough, as much as may be necessary to answer the purpose intended. It embraces no more than that which provides a plentitude which, when done, suffices to accomplish the purpose intended in the light of existing circumstances and when viewed from the reasonable standard of practical and cautious men. The sufficient cause should be such as it would persuade the Court, in exercise of its judicial discretion, to treat the delay as an excusable one. These provisions give the Courts enough power and discretion to apply a law in a meaningful manner, while assuring that the purpose of enacting such a law does not stand frustrated. The party should show that besides acting bona fide, it had taken all possible steps within its power and control and had approached the Court without any unnecessary delay. The test is whether or not a cause is sufficient to see whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody including the Government. 13. In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the ARA about the investigations that had been initiated by the DGGI against Vijay Baburao Shirke. The appellant has stated that the Authority for Advance Ruling has not considered certain facts while passing the order in favour of the respondents. 35. At Para A of the present appeal, the appellant department has contended that the respondent has suppressed the very fact that an investigation/proceeding was pending against them by not stating/mentioning the source from which they have received advise for treating prize money as a service/supply. 36. It is pertinent to look into Section 104 of the act which reads as under:- "104. Advance ruling too be void in certain circumstances ,- (1) Where the Authority or the Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under subsection (1) of section 101 has been obtained by the applicant or the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant or the appellant as if such advance ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India V/s Hansoli Devi reported at (2002) 7 SCC 273 = 2002 (9) TMI 799 - SUPREME COURT the Hon'ble Supreme Court has observed that the legislature never waste's it words or say anything in vain and a construction which attributes redundancy to legislation will not be accepted except for compelling reasons. 41. The legislature is a perfect legislative body. It is presumed to know all the laws when it enacts any particular legislation. In Union of India V/s Hansoli Devi reported at (2002) 7 SCC 273 = 2002 (9) TMI 799 - SUPREME COURT the Hon'ble Supreme Court has observed that the legislature never wastes its words or say anything in vain and a construction which attributes redundancy to legislation will not be accepted except for compelling reasons. 42. In Sultana Begum v/s Premchand Jain reported at (1997) 1 SCC 373 = 1996 (12) TMI 388 - SUPREME COURT, at page 381, the Hon'ble Apex Court has held as under: "............................. 15. On a conspectus of the case low indicated above, the following principles ore clearly discernible: 1) It is the duty of the courts to ovoid a head-on clash between two sections of the Act and to construe the provisions which appear to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in meaning is to see the skin and miss the soul. Words, phrases and rules occurring in a statute are to be read together and not in an isolated manner. The legislation never intends to give one from one hand and take away from other hand. Hence, the present appeal is not maintainable and deserves to be dismissed, in limine. 45. There is yet another reason which supports the above submission of the respondent. The above provision section 104 would be applicable only in case where the applicant (assessee) is the appellant. The appellate authority would pass an order on the appeal of the appellant (assessee). Such an order can be recalled if the appellant (assessee) is guilty of fraud, suppression of material facts or misrepresentation of facts. It cannot be gainsaid that the revenue would be guilty of fraud, suppression of material facts or misrepresentation of facts. 46. If the DGGI was so convincing, they could have convinced the Authority for Advance ruling to recall its order and hold that the same is void, by moving an appropriate application before it, in terms of section 104 of the Act ibid. Having failed to do so, the present appeal is a back door entry. It should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be rejected. 53. At Para K of the department appeal, the appellant-department has alleged that the respondent even after being aware of the investigation conducted against him by DGGI, Pune, chose to file the application before Authority for Advance Ruling, Maharashtra. Hence, the respondent has suppressed the very fact that an enquiry or a proceeding was initiated against them under section 98(2) of the CGST Act, 2017. 54. The respondent submits that the above contention of the appellant-department is without any logic, basis and reasoning. It is wholly perverse. It is mala fide. It is far from truth. 55. At the outset, the respondent wishes to submit that the proceedings/enquiry initiated against the respondent relates to the erstwhile service tax regime. Vide letter dated 08.04.2019 (Annexure 5), DGGI, Pune stated that recovery of service tax from clubs on the prize money won in horse races is not permissible in as much as the participation in horse races is not a 'service'. Accordingly, no cenvat credit can be taken on the inputs in as much as the participation in horse races is an outward activity for the clubs and not for the owners. Accordingly, the respondent was asked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the applicability of GST to the present transaction. Hence, the department cannot place reliance on proceedings/enquiry conducted regarding the service tax to negate the applicability of GST on the present transaction. There was no proceeding or enquiry pending under the GST law on the date of filing the application. Hence, the Revenue is completely misdirected in alleging that the applicant has suppressed any fact from the authority. This is nothing but false. 58. If such a contention were to be accepted as correct, then no assessee who has been issued a show cause notice or has any proceedings pending against him under the service tax regime would be able to apply for an advance ruling under GST law. This is nothing but absurd. The provisions of Advance ruling are incorporated only with intent to avoid litigation. However, the appellant revenue seems be doing exactly the opposite. 59. Even otherwise, the ruling by the Ld. Authority for Advance Ruling would be applicable under the GST regime. The same need not be binding on the department for the service tax regime. The department is free to take any opinion or view under the service tax regime. The respondent had clearly stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 63. The statement made by Shri V. S. Hasolkar is only an opinion or his interpretation of the Finance Act, 1994. If Shri Hasolkar had stated that service tax is chargeable on prize money, would the DGGI have accepted his statement as Law? Opinion from expert consultants who are far more knowledgeable in matters of interpretation, were presented to the DGGI by the same Shri Hasolkar, which stated the prize money was liable to service tax. Why was this opinion not accepted by DGGI?. How did Shri Hasolkar give a contrary opinion in his statement when he was fully aware of the consultant's opinion? In the same opinion, High Court and Supreme Court judgments have been quoted which state that when output tax has been paid and accepted, even if such tax was not payable, then input tax credit need not be reversed. Mr. Hasolkar was fully aware of these judgments. Why would he then say in this statement that the input tax needs to be reversed and he is agreeable to do so? Serious consideration needs to be given to this issue. The DGGI refuses to consider Court judgments quoted in the same opinions, but is pointing out to certain opinions of the consultants which are convenient to them. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keys/trainers. 69. At Para E of the present appeal, the appellant-department has contended that not all horse owners are treating the prize money received as consideration for a supply/service. Only few owners have charged and recovered service tax on prize money/stakes from RWITC Mumbai and Pune on monthly/quarterly basis by issuing invoices/bills. As per the appeal, 95-96% of the horse owners have not considered the amount of prize money/stakes as consideration for taxable supplies. Hence, they have neither charged nor paid service tax on the said amount. It is also contended that race clubs in Kolkata, Hyderabad, Madras, Bangalore and Mysore are also not paying service tax on such prize money won by race horse owners. 70. The respondent submits that the above grounds taken by the appellant-department are absurd and incongruous. What is being done by other horse owners is not a basis to decide the present appeal. The present appeal needs to be decided on the facts of the present case. The Appellant seems to suggest that since 90-95% have not considered the amount of stakes received by them as a taxable service, the interpretation of a tax law should be based on the percentage o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not covered under the said provision of law. As per the appeal, the respondent has asked a question pertaining to the payment of GST on prize money won by the competitors. The same is not covered under the provisions under section 97(2) of the CGST Act, 2017. 75. First, the question raised by the respondent squarely falls under clause (d) and (e) of section 9/ of the C CST Act, 2017. Relevant extract of the same is reproduced as under for reference - "97. (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such tee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought under this Act, shall be in respect of, - a) classification of any goods or services or both; b) applicability of a notification issued under the provisions of this Act; c) determination of time and value of supply of goods or services or both; d) admissibility of input tax credit of tax paid or deemed to have been paid; e) determination of the liability to pay tax on any goods or services or both; f) whether applicant is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of owners is not an activity carried out by a person on behest of or for the other. The prize money is given to only that horse owner who wins the race. There are several owners who do not win the race and no prize money is given to them. There is no quid pro quo. Prize money is not won for participation in the horse race. There is no certainty of winning the prize money for horse races. 82. At Para H of the department appeal, the appellant-department has contended that there is no service rendered to RWITC and the prize money is not a consideration paid to the owners by RWITC for provision of any services. The Suo-moto participation of horse owner in a race is not a activity as per section 65B (44) of the Finance Act, 1994 and hence service tax is not payable. Accordingly, as per the appeal, the activity does not fall under clause (a) of section 2(17) of the CGST Act, 2017 in as much as the ingredients of supply are not being satisfied. 83. At Para M of the department appeal, the appellant-department has contended that the respondent has not provided any services by way of making his horse participate in the race in as much as he has not provided any specialized or trained h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that "supply" includes:- a) all forms of supply of goods or services or both such os sole, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; b) import of services for a consideration whether or not in the course or furtherance of business; c) the activities specified in Schedule I, made or agreed to be made without a consideration; and d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II". 88. Section 9 is the charging section. It provides for levy of tax called the CGST on all intrastate supplies of goods or services or both and at such rates, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. 89. Section 2(101) of CGST Act, 2017 defines "Service" as: "anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inning or upon attaining the position 2nd, 3rd, 4th, 5th, or 6th as stated in the prospectus. Thus, the contract between the parties is conditional in as much as it is dependent upon the success of a horse owner in the race. 95. In the instant case, RWITC has issued prospectus to the horse owners. The contract contains the general terms and conditions along with the guidelines for participation in the race. The prizes are to be distributed in the manner provided for in the prospectus. Hence, the prospectus is binding upon the parties. It is a valid contract. Reliance is placed on Kanchan Vora and Bepin Voravs. West Bengal Housing Board reported at MANU/WB/0724/1989 = 1989 (3) TMI 400 - CALCUTTA HIGH COURT, wherein it was held that a brochure providing for manner of allotment of flats is a valid contract. 96. In the instant case, the respondent has accepted the offer in the prospectus from RWITC by way of participation in the race. Through acceptance of the conditions in the prospectus, the respondent has concluded a contract for provision of service/supply by way of participation in the race for which they are receiving consideration in the form of prize money. 97. It is a well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e race is the choice of the owner. There is no pre-agreement with RWITC. This is clearly incorrect. The choice to participate in the race is of the respondent. However, the club (RWITC) allows the respondent to participate in the said race. There is an obligation on part of the respondent to make his horse available for the race. It is here that there is an agreement between the said parties. Let us explain with the aid of a simple illustration. When a buyer enters a shopping mall, he enters on his own choice. However, when we intend to buy any goods, there is an agreement to sell between the buyer and the shop owner. Once the said is concluded, there is a contract of sale. This is fundamental and basic concept of contract law, which, obviously, the appellant department seems to be unaware of. 101. Fourth, the reproduction of section 65B (44) of the Finance Act, 1994 bears no relevance in the instant case in as much as the respondent have filed an application before Authority of Advance Ruling, Maharashtra for clarity on the subject issue under GST and not service tax. Hence, reliance on erstwhile laws bears no relevance. 102. Fifth, the department is unable to decide on the taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, the appellant-department has reproduced section 7 of the CGST Act, 2017 to suggest that the prize money won in horse races by the respondent is an actionable claim. 108. The above submission of the appellant Revenue is without any legal basis. The uncertainty of winning of the prize money cannot be a ground to suggest that is not a consideration for the supply. It is a consideration for running. It is, in fact, the sole intention with which the owners participate in the race. Without participating in the race, it is not possible for anyone to win the race. Hence, the prize money can be awarded to only participating and winning horses. The fact that the said consideration is paid only to some and not to all others cannot be a ground to suggest that it is not a consideration for participating in the race. Therefore, it would be a fallacy to suggest that there is no consideration. There is no certainty of receipt of consideration for supply of services and goods. There are bad debts. However, it cannot be gain said that there is no consideration. Hence, being bereft of any merit, the present appeal is liable to be rejected. 109. At Para P of the departmental appeal, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue is devoid of any merit. 114. At Para S & T of the department appeal, the appellant-department has cited the decision in the case of Gurdeep Singh Sachar (CPIL Stamp no.22 of 2019) = 2019 (6) TMI 1008 - BOMBAY HIGH COURT passed by the Hon'ble Bombay High Court to suggest that no tax is payable on actionable claims related to online fantasy sport gaming. Reliance placed on the said decision by the appellant Revenue is totally misplaced and out of context. The facts of the case are different with that of the present case. Unlike the facts of the cited case, where the money from the escrow account is distributed to the owners, the prize money is not redistributed from the pool of entry fee or from the bets that the public may place on the outcome of a particular race. The prize money is a guaranteed amount which the club pays to the winning or placed horses as stated in the prospectus. This amount has nothing to do with the entry fees recovered or the betting money that may take place on the outcome of the race. These amounts are a part of the income of the club, but in no way affect the prize money guaranteed by the club. Hence, no reliance can be placed on the same. 115. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse, is liable to GST in the hands of the participant or not. Hence, the said ruling would be of no assistance to the case of the Revenue. 116. The Appellant seems to be confused between "participating in the race" and "betting on such race". Betting in a race could be a game of chance or luck. However, the outcome of a race is entirely different from owner's horses participating in a race and winning prize money. Without participating, no one can win. This is trite. Betting on the outcome of a race and owners owning horses and participating in a race are two entirely different activities. The club conducts races in which the owner's horses participate. They get prize money based on their performance. The public may bet on the outcome of these races. The owner of the horse has nothing to do with the activity of betting. However, this aspect of the matter seems to have been lost sight of by the Revenue. 117. In Vikas Sales Corporation Vs. Commissioner of Commercial Taxes AIR 1996 SC 2082 = 1996 (5) TMI 363 - SUPREME COURT, the question before the Hon'ble Supreme Court was whether the transfer of "import license" called REP License by the holders thereof to another person constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cited case, the issue before the Hon'ble High Court was whether fees received by court receiver appointed by the court could be subject to GST or not. The court replied in the negative and held that a court receiver is an employee of the High Court and hence, fell within Serial No.2 of Schedule III of the CGST Act. Further, the court held that there would be no GST on royalty as it may be in the nature of potential award for damages or mesne profits. The facts of the present case are totally different and distinguishable. 121. At Para W of the departmental appeal, the appellant-department has reproduced Para 2.3 of CBEC Education Guide to suggest that no service tax was payable on an award received as consideration for contribution over a life time or even a singular achievement carried out independently or without reciprocity to the amount received as consideration. 122. The reliance placed on the said clarification is, yet again, out of context and misplaced. An award is not something which we work for. It is a recognition of the work carried out and contribution to the particular field or profession or organization. A life time achievement award cannot be compared with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be reversed in as much as there is no output supply being made by the respondent. 126. The applicant submits that input tax credit availed on GST paid on prize money need not be reversed. 127. First, even if it is held that no GST is applicable on the transaction in question, the applicant has erred in favor of the Revenue / Department by depositing the same to the credit of the Government. Thus, there is no loss to the exchequer. In such situation, there should not be any demand for reversal of input tax credit. 128. Second, once GST has been accepted by the department treating the transaction in question as a taxable supply, then, thereafter, the department cannot turn around and argue to the contrary seeking to recover input tax credit. In CCE vs. Ajinkya Enterprises reported at 2013 (294) ELT 203 (Bom) = 2012 (7) TMI 141 - BOMBAY HIGH COURT, the appellant considered their activity to be one of manufacture and accordingly, paid central excise duty by utilizing cenvat credit. The department contended that the appellant's activity did not amount to manufacture and therefore, the cenvat credit taken by the appellant should be recovered with interest and penalties thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling application filed by him before AAR, hence the advance ruling obtained by the Applicant- Respondent is liable to be declared void ab- initio in terms of the provision of section 104 (1) of the CGST Act, 2017. Now, let us examine the merits in the aforesaid allegations made by the Appellant- Department in light of the provisions of section 104 of the CGST Act, 2017, which is being reproduced herein under: 104. (1) Where the Authority or the Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of section 101 has been obtained by the applicant or the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant or the appellant as if such advance ruling had never been made : Provided that no order shall be passed under this sub-section unless an opportunity of being heard has been given to the applicant or the appellant. In the above provision, there is mention of both the authorities, i.e. Advance Ruling Authority as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent to the racing clubs for the Prize money/ stakes received from such clubs, as it is not in dispute that not all horse owners, who agree to provide their horses to such race organising clubs, get this consideration in the form of the said prize money/ stake from such clubs. Only those horse owners receive these considerations whose horses win the races organized by such clubs. Thus, there is no direct nexus between the activities carried out by the horse owners, viz.by providing thoroughbred horses to race clubs for organising horse race events, and the prize money received by such horse owners. The Applicant-Respondent has himself contended in their submissions as reproduced herein above that for the occurrence of any taxable event, there must be direct and immediate link between the supply made and the consideration received. He has also cited few judicial pronouncements to strengthen his arguments. However, as discussed above, in the present facts and circumstances, this clause of direct and immediate link between the supply and consideration is absolutely absent in the present situation. As such, it would not be construed as taxable supply /events. Participation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be a conditional contract here and we might assume that for the moment. But not every contract becomes taxable under the CGST law. Every supply is a contract but not every contract is a supply. In order to levy tax under the CGST Act there should be supply of goods/ service and there should be consideration. We have already delineated in detail as to how there is no service provided in the present case and therefore the argument of the appellant is not acceptable. 138. Now, we proceed to decide the second question asked by the Applicant- Respondent as to whether they would be eligible to avail ITC in respect of the expenses incurred on the entry fee paid to the horse racing clubs, training charges paid to the trainers, amount paid to the jockeys, etc. As regards this question, it is stated that since there is no taxable supply by the Applicant Respondent in the present arrangement, there is no question of availment of ICT as per the provisions of section 17 (2) of the CGST Act, 2017, which is being reproduced herein under:- "(2) where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero- rated supplies under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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