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TMI Blog2023 (5) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... er's claim for benefit of budgetary support under a scheme on the ground that the benefit thereunder can only be allowed on goods manufactured under an 8-digit HSN code and cleared prior to 01.07.2017, and thus the petitioner is not eligible for the refund. 3. The said claim was made by the petitioner under a scheme prepared by the Government of India in 2017 for providing budgetary support, in lieu of excise duty tax exemption granted earlier for manufacturing certain goods by the manufacturing units in the State of Jammu and Kashmir as per the exemption notification issued earlier in this regard in 2010. 4. The Central Government in exercise of powers conferred under Section 5A (1) of the Central Excise Act, 1944, issued a Notification bearing No. 1/2010-CE on 06.02.2010 (hereinafter referred to as the Exemption Notification) which exempted from payment of excise duty or additional excise duty leviable on such goods as specified in the First and Second Schedules to the Central Excise Tariff Act, 1985 for a period of 10 years when these goods were cleared from a unit located in the State (now UT) of Jammu and Kashmir to boost industrial growth in the State (now UT). This exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, notified a "Budgetary Support Scheme" under the Goods and Services Tax regime to units located in the States of Jammu& Kashmir, Uttarakhand, Himachal Pradesh and the Northeast States including Sikkim (hereinafter referred as the "Scheme"). Under the Scheme, budgetary support was granted with effect from 01.07.2017 to all eligible units for the residual period in respect of the specified goods as defined in the new scheme. The eligible unit was to be provided reimbursement of the Central Government share of the cash component of the CGST and IGST, at 58% of CGST and 29% of IGST, in lieu of exemption provided earlier under the erstwhile Exemption Notification. 8. The mechanism for this support as offered in the Scheme was that a specified amount of budgetary support shall be provided in respect of "specified goods" manufactured and cleared by an eligible manufacturing unit for the residual period covered under the Exemption Notification. 9. Thus, what is contemplated under the new Scheme is that, those manufacturing units which were getting certain exemption of Central excise duty under the earlier Exemption Notification, would no longer get such exemption after the withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that under the Exemption Notification, "all goods" covered under Chapter 38 of the Tariff Act were eligible for exemption from Central Excise Duty and the said notification did not distinguish the goods classified under different sub-headings and sub-items within Chapter 38 for the purpose of grant of excise duty exemption. ii) Secondly, for the purpose of the Scheme, the "specified goods" can be read to mean any goods covered under Chapter 38 and not only goods under any particular sub-heading or entry as the respondents are seeking to restrict to. 14. The contention of the petitioner is that the petitioner's unit was manufacturing goods covered under Tariff Heading No. 3808 of Chapter 38 of the Tariff Act for which the petitioner was granted exemption of excise duty under the Exemption Notification and since the petitioner continued to manufacture goods which are covered under Tariff Heading No. 3808 after the Scheme came into operation, the petitioner will be entitled to budgetary support under the new Scheme in respect of any item falling under HSN Code 3808. According to the petitioner, the requirement is that the goods so manufactured after the Scheme came into opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 69 00 -- Other Kg. 12.5% - Other: 3808 91 -- Insecticides: 3808 91 11 ----Aluminium phosphate (for example phostoxin) Kg. 12.5% 3808 91 12 ---- Calcium cyanide Kg. 12.5% 3808 91 13 ----D.D.V.P. (Dimethyle-dichloro-vinyl- phosphate) Kg. 12.5% 3808 91 21 ---- Diaginal Kg. 12.5% 3808 91 22 ---- Methyl bromide Kg. 12.5% 3808 91 23 ---- Dimethoate, technical grade Kg. 12.5% 3808 91 24 ---- Melathion Kg. 12.5% 3808 91 31 ---- Endosulphan, technical grade Kg. 12.5% 3808 91 32 ---- Quinalphos Kg. 12.5% 3808 91 33 ---- Isoproturon Kg. 12.5% 3808 91 34 ---- Fenthion Kg. 12.5% 3808 91 35 ---- Cipermethrin, technical grade Kg. 12.5% 3808 91 36 ---- Allethrin Kg. 12.5% 3808 91 37 ---- Synthetic pyrethrum Kg. 12.5% --- Other 3808 91 91 ----Repellants for insects such as flies, mosquito Kg. 12.5% 3808 91 92 ----Paper impregnated or coated with insecticides such as D.D.T. coated paper Kg. 12.5% 3808 91 99 ---- Other Kg. 12.5% 3808 92 -- Fungicides: 3808 92 10 --- Maneb Kg. 12.5% 3808 92 20 ---Sodium pentachlorophenate (santrobrite) K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... broad classification of different goods enumerated in the Table of the different goods/items with 6-digit and 8-digit HSN codes. Under the broad category of 4-digit Tariff Item HSN Code 3808 under Chapter 38, all such goods with 8-digit HSN code falling under it would be eligible for the exemption from excise duty in the manner provided under the Exemption Notification. Thus, if the petitioner's unit manufactured any of the items with 8-digit code mentioned in the sub-items or sub-heads under the broad Tariff Item 3808, exemption could be sought under the aforesaid Notification in respect of the item with 8-digit HSN code. 19. It is also to be noted that the rate of tariff is not specified under the broad item of HSN Code 3808 code but against the individual sub-heads/ sub-items given with 8-digit. Broad Classification under 3808 code includes "Insecticide" as a sub-head with 6-digit HSN code 3808 91, yet no tariff rate is shown against 6-digit HSN code 3808 91. Under this sub-head of "Insecticide" with 6-digit HSN code 3808 91, there are several items with 8-digit HSN code against which the tariff rates are shown. Similarly, it is with "Fungicide", which is a sub-head with 6-dig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in the States of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim under different Industrial Promotion Schemes of the Government of India, for the residual period for which each of the units is eligible, and introduced and notified a new scheme on 5.10.2017 vide Notification dated 05.10.2017, (hereinafter referred to as the "Scheme"). This new Scheme was offered, as a measure of goodwill, only to the units which were eligible for drawing benefits under the earlier excise duty exemption/refund schemes but has otherwise no relation to the erstwhile schemes. 23. Under the new Scheme, all units which were eligible under the erstwhile schemes and were in operation through notifications issued by the Department of Revenue in the Ministry of Finance, including Exemption Notification for the State (now UT) of Jammu & Kashmir were considered eligible. Under this new Scheme, the benefit is limited to the tax which accrues to the Central Government under Central Goods and Service Act, 2017 and Integrated Goods and Services Act, 2017, after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above. 31. "Specified goods" has been defined under para 4.2 of the Scheme notification, as to mean the goods specified under exemption notifications, which were eligible for exemption under the said notifications, and which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption from the premises under Central Excise with a registration number, as it existed prior to migration to GST etc., which is reproduced herein below. "4.2 'Specified goods' means the goods specified under exemption notifications, listed in paragraph 2, which were eligible for exemption under the said notifications, and which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption, from: (a) the premises under Central Excise with a registration number, as it existed prior to migration to GST; or (b) the manufacturing premises registered in GST as a place of business from where the said goods under exemption notification no. 49/2003-CE dated 10.06.2003 and 50/2003-CE dated 10.06.2003 were being cleared." (emphasis added) Thus, "specified goods" means those which were being manufactured and cleared by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid position in mind, we will examine the case in hand. 36. In the speaking order dt. 07.12.2020 issued by the Assistant Commissioner, respondent no. 4, it has been mentioned in paragraph 10 thereof, that without having manufactured and availed area based exemption of a single rupee, in respect of goods falling under tariff headings 38089113, 38089290, 38089340, 38089350, 38089390, 380 89910 and 38089990 prior to 01.07.2017, the petitioner cannot be presumed to be availing the said exemption in terms of the provision of Para 4.2 of the Exemption Notification. The stand of the respondents is very clear that since the petitioner did not manufacture the items falling under the aforesaid tariff headings and did not avail the excise duty exemption in terms of the earlier Exemption Notification, the petitioner cannot be granted budgetary support under the new Scheme. 37. On the other hand, it is the case of the petitioner that what is required to be fulfilled by the unit for the purpose or availing the budgetary support is that the unit must have manufactured and availed excise duty exemption under the broad Tariff heading of 3808 under Exemption Notification and if the unit contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the sub-heads with 6-digit HSN code. It was only such item with 8-digit HSN code which was manufactured and eligible for excise duty exemption under the Exemption Notification. It will be only such items or goods in respect of which excise duty exemption was availed under the Exemption Notification, if continued to be manufactured after the Scheme of 2017 was notified, which would be eligible for claim of budgetary support under the new Scheme. 40. The aforesaid position is clearly indicated in Para 3.1, Para 4.1.,Para 4.2, and Para 5 of the Scheme. Para 3.1 of the Scheme provides that the scheme shall remain in operation for residual for each of the eligible unit in respect of specified goods as defined in Para 4.2. Para 4.1 defines an "eligible unit". Since there is no dispute about the eligibility of the petitioner's unit, it may not be necessary to dwell further on the issue of eligibility. Para 4.2 defines "specified goods" as the goods specified under exemption notifications, which were eligible for exemption under the said notifications, and which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption. Para 5 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... digit items which fall under the broad Tariff Head of 3808, and since the petitioner was availing tax exemption in respect of some other item falling under Tariff Head of 3808, the petitioner's unit would be eligible to claim budgetary support under the Scheme. The said plea does not appear to be correct. 45. We are also not able to accept the submission of the petitioner that the Scheme contains no prescription whatsoever to the effect that the budgetary support is available only for such goods which are identifiable with reference to their 8-digit classification. We are also not convinced with the submission of the petitioner that the respondent's contention that the goods manufactured and cleared before and after the repeal of the Exemption Notification should have been identical in their 8-digit HSN code classification and that this is an attempt by the respondents to supply additional words to the Scheme notification which are neither found in the provisions nor ever intended by the Central Government. 46. The contention of the petitioner that the Central Government intended the category of goods specified in the Exemption Notification shall be eligible goods under the Schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... berally construed, does not merit consideration, in view of the fact that the language used in this scheme is very clear about conditions to be fulfilled for availing the benefit of budgetary support. Had there been some ambiguity in the language under this Scheme, the said contention of the petitioner could have been considered. In view of the specific requirements of the nature of goods to avail the benefit of budgetary support, having been very clearly defined under Para of 4.2of the Scheme "specified goods" as discussed above, there is no scope for any liberal interpretation of the words and languages used in the Scheme. In view of the above, it may not be necessary to discuss the cases laws cited by the petitioner and by the respondents in rebuttal in this regard. 50. Accordingly, we are in agreement with a view taken by the respondents as mentioned in the impugned speaking rejection order dated 07.12.2020 that if the provisions of the Scheme Notification are given the meaning as sought to be done by the petitioner, every unit which was eligible to avail exemption under any specified notification and started manufacturing new items after 01.07.2017 would claim to be eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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