TMI Blog2022 (4) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2017, any application for advance ruling involving questions already pending or decided in any proceedings in the case of the applicant under any of the provisions of this Act shall not be admitted - In the applicant case, it is seen that the State authorities have already made investigations regarding the taxability of the products for which Advance Ruling is sought for and the questions raised by the applicant in their Advance Ruling application is one of the grounds raised in the Appeal filed by the Department against the order passed by the State Tax officer, Intelligence, O/o Deputy Commissioner (ST) Intelligence, Madurai seeking reassessment. In view of the specific embargo of Section 98(2) of the CGST Act, 2017, the Advance ruling application submitted by the applicant cannot be admitted by this Authority as the proceedings are pending on the issues on which the Advance Ruling is sought for - The application is not admitted under first proviso to Section 98 (2) of the CGST/TNGST Act 2017. - TN/09/ARA/2022 - - - Dated:- 22-3-2022 - SHRI T.G. VENKATESH, I.R.S., AND TMT. K. LATHA, M.SC., (AGRI), MEMBER, Note: Any appeal against the Advance Ruling order shall be fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of the above Job Work, the Principal Manufacturer sends the Copra Cake to the applicant and the latter process the same and extracts Coconut Oil and De-oiled Coconut Cake. Similarly, they also process the Rice Bran owned by other Principal Manufacturers and extracts Rice Bran Oil and De-oiled Rice Bran, on a Job work basis. All the above Job work is done in compliance with the Job work procedures laid down in Sec 143 of Central Goods and Service Tax Act (hereinafter referred to as CGST Act ) 2.2 On interpretation of law, the applicant has referred to Sec 9(1) of CGST Act, and definition of Supply under Sec 7 of CGST Act, which covers supply of goods as well as services. The applicant has stated that they are engaged in Supply as per Sec 7 of CGST Act, as they have contractually agreed with their customers to do an activity in the nature of Job work in relation to manufacture for consideration. However, to determine whether the activity of such job work in relation to extraction of Coconut Oil and Coconut De-oiled Cake from Copra Cake or extraction of Rice Bran oil and De-oiled Rice Bran from Rice Bran, is a supply of goods or services, they have referred to Sec 7(1A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Manufacturer accordingly as per Sec 2(72) of CGST Act. Hence in the given context they will be called as Job Work Manufacturer . In view of the aforementioned facts, they have stated that they are engaged in supply of manufacturing services by way of job work and their services are classified under SAC Code 9988 in Sl. No. 26 of Notification No. 11/2017 - CT(Rate) dated 28.06.2017. As far as rate of tax is concerned, it is submitted that they are processing the Copra Cake and extracting primary output of Coconut Oil which is classified by the Principal Manufacturers or Customers under Tariff heading 1513 11 00 in Chapter 15 of First Schedule to the Customs Tariff Act, 1975 as a Vegetable fats and oils. In the same manufacturing process of conversion of Copra cake into Coconut oil, the applicant is extracting a residue product which is identified as Coconut De-oiled cake in the market and is classified by the Principal Manufacturers or Customers under Tariff heading 2306 50 20 in Chapter 23 of First Schedule to the Customs Tariff Act, 1975 as a Residue and waste from the food industries. The applicant has submitted that if a Job Worker manufacturer is engaged in the manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey can levy GST at 5% [CGST - 2.50%; SGST - 2.50%] conversion charges / Job work charges levied on the Customers / Principal Manufacturers for such Coconut De-Oiled Cake, in case of Intra-state supply whereas IGST - 5% in case of Inter-state supply under the Heading 998814 - Vegetable and animal oil and fat manufacturing services. 2.4 They have further stated that the Customer is sending Rice Bran to them for extraction of Rice Bran Oil for a consideration in the form of Job Work after complying with the procedures laid down in Sec 143 of CGST Act. The applicant in the course of conversion of Rice Bran into Rice Bran Oil / De-oiled Rice Bran have to naturally undergo certain manufacturing process and thereby a new product has emerged having a distinct name, character and use. As mentioned in para supra their services are classified under SAC Code 9988 in Sl. No. 26 of Notification No. 11/2017 - CT(Rate) dated 28.06.2017. As far as rate of tax is concerned, they are processing the Rice Bran and extracting primary output of Rice Bran Oil which is classified by the Principal Manufacturers or Customers under Tariff heading 15159040 in Chapter 15 of First Schedule to the Customs Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. Intimation of Superintendent of CGST Central Excise, North Range, Madurai with respect to blocking of Electronic, Credit Ledger for irregular availment of ITC d. Recording of Statement in Mahazar, by Directorate General of GST Intelligence, Madurai Regional Unit, Madurai e. Summary of the issues f. Conversion Agreement with respect to Job Work for conversion of copra Cake into Coconut Oil/ De-Oiled Cake g. Conversion Agreement with respect to Job Work for conversion of Rice Bran into Rice Bran Oil / De-Oiled Rice Bran h. Invoice Copies for Conversion of Copra Cake into Coconut Oil ; De-Oiled Copra Cake i. Invoice Copies for Conversion of Rice Bran into Rice Bran Oil / De-Oiled Rice Bran The applicant also requested to grant another hearing to put forth their contentions and explain their submissions before passing any order in this regard: 3.3 The applicant was given another opportunity to be heard virtually on 20.01.2022. The Authorised Representative, Shri. J. Balasubramanian, Chartered Accountant appeared for the hearing virtually. He reiterated their submissions in detail. He was asked to submit documents for receipt and delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 01.07.2017 to 24.01.2018 and they also furnished copy Of the incident report. 5. The State Authority, Joint Commissioner(ST), Intelligence, Madurai vide letter RC.No. 3226/2021/A9 dated 29.11.2021 has stated that as per authorization issued, the place of business of the applicant was inspected by the inspection officials. The taxpayer's reply to the notice issued by the inspecting official, is that it is a Centre case and the same place was inspected by the Deputy Director GST Intelligence and some records were taken over by them and they have not produced the required documents for the assessment. As time bound to pass Adjudication Order the Adjudicating Authority passed the adjudication order for the years 2017-18, 2018-19 and 2019-20 on the basis of the available records on hand and points which were mentioned in the Investigation file only i.e, Excess turnover reported in GSTR-1 and GSTR 3B; Difference noticed between GSTR 2A and 3B; Huge difference between inward and outward supply as per e-way bill and GSTR 2A; Stock difference. The GST rate applicable for Job work service relating to the Tax payer was not incorporated in the adjudication order. Against the adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxability of the products for which Advance Ruling is sought. Section 98 of the CGST Act 2017 /TNGST Act 2017 provides the procedure to be followed on receipt of the application and the first proviso to Section 98(2) states that the application is not to be admitted when the question raised in the application is already pending or decided in any proceedings in the applicant's case. The statutory provision is given below for ease of reference: 98 (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided that the Authority 'shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act: In the instant case, the applicant has sought the classification of the supply as to whether, it is a supply of Goods or services and GST rate applicable on the said job work activity undertaken by them. As per the remarks of the Centre Jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and as time bound to pass Adjudication Order, the proper officer passed the adjudication order for the years 2017-18, 2018-19 and 2019-20 on the basis of the available records on hand and points which were mentioned in the Investigation file only i.e, 1) Excess turnover reported in GSTR-1 and GSTR 3B 2) Difference noticed between GSTR 2A and 3B 3) Huge difference between inward and outward supply as per e-way bill and GSTR 2A 4) Stock difference. However, the GST rate applicable for Job work activities relating to the Tax payer was not incorporated in the said adjudication order. 7.3 Against the said adjudication order, GST appeal is filed by the State Department before the Appellate Authority to make reassessment on the grounds that there is variation while comparing the Adjudication order and the credit and liability statement. In the Grounds of Appeal in Form GST APL-03 filed for the period of dispute July 2017 to March 2018, April 2018 to March 2019 and April 2019 to October 2019, among the various points discussed, point No.14 pertains to Rate of Tax and Exempted turnover which is extracted below: 14. Rate of tax and exempted turnover: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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