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TMI Blog2024 (2) TMI 1357X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Services Tax Act, 2017 (hereinafter also referred to as 'the CGST Act') read with Section 100 of the Rajasthan Goods and Services Tax Act, 2017 (hereinafter also referred to as 'the RGST Act') by the Additional Commissioner, CGST & Central Excise Service Tax. Commissionerate. Udaipur (hereinafter also referred to as 'the appellant') against letter No. 01/Letter/AAR/State/2023-24 dated 11.07.2023 issued by the AAR. Rajasthan issued in respect of M/s Gyankeer Tobacco Products Pvt Ltd (M/s GTPPL. earlier known as M/s Gyankeer Products Pvt Ltd) 00, Factory premises, NH08, Miraj Campus, Nathdwara, Rajsamand. Rajasthan-313301. BRIEF FACTS OF THE CASE 3.1 M/s Gyankeer Tobacco Products Pvt Ltd (M/s GTPP), earlier known as M/s Gyankeer Products Pvt Ltd) (hereinafter referred to as 'the taxpayer' and also as 'the respondent') 00, Factory premises, NH08, Miraj Campus. Nathdwara. Rajsamand. Rajasthan-313301, hold the GST Registration No. 08AAHCG3822A1Z1. They are manufacturer of tobacco products. They filed an application before the AAR. Rajasthan to seek advance ruling for classification of their product "Keer Kokil" - tobacco premixed with lime to be classified as "unmanufactured tob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 350;ें पाउच पैक किये जाएंगे | 7. जिनका रु 5 या रु. 10 आदि स्वरुप में बाज़ार कि मांग के अनुसार 30, 15, 20 पाउच के पैकेट बनाये जाएंगे | 8. फिर बाज़ार में बिक्री के लिए भेजा जाएगा | 3.3 After furnishing of the revised manufacturing process dated 16.05.2022 by the taxpayer, the AAR vide Ruling No. RAJ/AAR/2022-23/07 dated 01.06.2022 classified the product Keer Kokil as ''unmanufactured tobacco" under CTH 24012090 - others attracting GST @ 28% and Compensation Cess @71% as mentioned at Sr. No. 5 of Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and raw tobacco is prepared with a machine and transmitted through a pipeline and conveyer belt to the 'Mixing Machine' where raw tobacco and lime paste are mixed by a rotation blade mechanism. After the mixing process, the mixture is put into storage hoppers on tractors through conveyer belts to place the mixture in an open space for drying. After drying, the mixture is strained/sorted with a strainer machine and stored. This stored mixture is transferred to the 'Coating Plant', where 'Lacquering' is done with 'Nut Mug Aroma', Menthol/Peppermint oil and water solution. The ingredients are then mixed together in the coating plant. After mixing, the mixture is sent to 'Steel Tanks' through conveyer belts from where it goes to the packing plant for packing in various quantities. 3.8 Based on above evidence, it was observed by CGST Udaipur that M/s GTPPL have obtained the Ruling No. Raj/AAR/2022-23/07 dated 01.06.2022 by misrepresenting the facts before the Authority for Advance Ruling: that M/s GTPPL appeared to have violated the ruling pronounced by the Authority for Advance Ruling. Rajasthan for Goods & Service Tax vide Advance Ruling No. Raj/AAR/2022-23/07 dated 01.06.2022 by man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.05.2022. All the relevant facts are on the record and discussed in advance ruling order. Advance ruling was pronounced on the classification of 'tobacco pre-mixed with lime' with addition of volatile flavours. "Keer Kokil" is brand name being used by applicant. It is necessary to mention that order No. RAJ/AAR/2022-23/07 dated 01/06/2022. pronounced in respect of classification of tobacco pre-mixed with lime ', not any brand name Accordingly, it may be concluded that in the light of above discussion the advance ruling made by Order No. RAJ/AAR/2022-23/07 dated 01.06.2022 is made about the product on the basis of facts submitted in the application of the applicant. Based on facts submitted before AAR and available on record, it is difficult to establish that M/s Gyankeer Tobacco Products Pvt ltd has obtained order No. RAJ/AAR/2022-23/07 dated 01/06/2022 by fraud or suppression of material facts or misrepresentation of facts. Thus, the submitted letter C. No. V(15)80/AE/Gr/IV/UDR 2023 dated 04.05.2023 and subsequent letter dated 19.05.2023 is not sustainable to consider under Section 104 of CGST/RGST Act. 2017. A mechanism for redressal of order by AAR is also available in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using additional raw ingredients "Nut Meg Aroma" and "Mentha Oil" in their product "Keer Kokil". 4.5 That the directors of M/s GTPPL in their recorded statement also admitted that initially they manufactured their product as per the process allowed by the AAR in their ruling and only after their product didn't gamer much success they adopted a new process involving use of machines and mixed extra ingredients which was not allowed in the ruling and is different Irom the one approved in the ruling by the AAR. Rajasthan. 4.6 That the findings of the investigation were reported to the AAR. Rajasthan by Anti Evasion Udaipur vide their letter C. No. V(15)80/AE/Gr IV/UDR/2023 dated 04.05.2023 and subsequently a request was made before the AAR vide their office letter dated 19.05.2023 to put forth the documentary evidence/records for their perusal. However, while deciding the matter the principles of natural justice were not followed and the appellant department was not given an opportunity to produce the records to the authority. The AAR. Rajasthan erred while issue this letter/order to not examine the material facts and investigation report to take necessary action under Section 104 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days. (3) Every appeal under this section shall be in such form, accompanied by such fee and verified in such manner as may be. 2. Mischievous Attempt to challenge the Advance Ruling: That the Appellant Department has filed the present appeal with a malicious intent to challenge the order of Advance Ruling dated 01.06.2022. the appeal against which is otherwise barred by limitation under Section 100 of CGST/RGST Act. It is humbly submitted that the present Appeal is a mischievous attempt of the Appellant Department to challenge the Advance Ruling dated 01.06:2022 under the garb of challenging the letter dated 10.07.2023. That the Appellant Department is aware of the fact, that the period of 60 days (30 days + additional 30 days at the discretion of the Appellate Authority) tor filing an appeal against an Advance Ruling pronounced under Section 98 had lapsed and that they cannot challenge the Advance Ruling dated 01.06.2022 owing to such lapse. It is clear from the acts of the Appellant Department that, to avoid the question of limitation, they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the process first submitted by M/s GTPPL included use of machines for mixing, auto plant for drying, conveyors and hoppers, coating plant, adding additional substances such as Mentha Oil and Nutmeg Aroma. However, in their revised submissions dated 16.05.2022. they submitted a process in which neither any use of machines is shown until the stage of packaging nor addition of Mentha Oil and Nutmeg aroma is mentioned. The taxpayer submitted that raw tobacco will be mixed with lime with hands, afterwards it will be dried and then moisture will be added and then it will be packaged in various sizes. Now here in this process did they mention that the machines for mixing, conveying, drying and again adding moisture will be used. Further they did not mention in the new' process that Mentha Oil and Nutmeg Aroma will be added. Various machines like mixing plant of lime and raw tobacco, conveyor belts, hoppers (used to transport tobacco at various stages of manufacturing) coating plant where lacquering is being done, were used in the manufacturing process. The process was video-graphed during the search conducted at the premises of M/s GTPPL by Anti Evasion Branch, CGST Udaipur in April, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e process involving manual labor and did not add Nutmeg Aroma and Mentha Oil for production of their lime mixed tobacco product "Keer Kokil"(unmanufactured tobacco without lime tube" at their premises situated at Village Thamla, Tehsil Mawli, Distt Udaipur. The product however did not gamer any success and due to very low sales did not generate enough revenue. 6.6.2 He then came in contact with Vinod Kumar Jat, Director. M/s Mirage Developers Group, who suggested that M/s GPPL (now M/s GTPPL) can rent their plant at Jhar, Saadri to manufacture their tobacco product "Keer Kokil". Gyan Singh Jhala also slated that they came in contact with a firm M/s Mirage Realcon which agreed to provide their machines (already setup al the Jhar Saadri plant) on rent for the production of the product "Keer Kokil". He inter alia staled that M/s Mirage Sales and Marketing agreed to provide sales and marketing support lo promote and sell "Keer Koki" using their own market base. 6.6.3 Gyan Singh Jhala admitted that the product manufactured at Village Thamla. Tehsil Mawli. Distt Udaipur was different from the product manufactured at their plant at Jhar. Saadri. The former did not involve use of machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l RTDC, Bhalawato Ka Kheda. Kalan Kheri Kharu. Rajsamand. Rajasthan. 313301. M/s SPPL are also a manufacturer of tobacco product and is currently operating from their additional place of business at Khasra No. 1199-1202. Rabcha, Tehsil Delwara. Rajsamand-313301. M/s SPPL are also manufacturing a tobacco product under the brand name "Turant" which has similar packaging as "keer kokil" along with "mktd by mirage sales and marketing LLP" mentioned above their brand name. 6.11 M/s SPPL which was incorporated in May-2022 having three directors including Gagandeep Singh, had also filed an application before the AAR. Rajasthan seeking a Ruling in respect of classification of their tobacco product and to determine the applicable rate of GST & Compensation Cess. The AAR, Rajasthan vide their order RAJ/AAR/2022-23/16 dated 20.10.2022 pronounced a ruling that the product manufactured by M/s SPPL falls under the category of unmanufactured tobacco and therefore falls under CTH 2401 20 90 "Others" and the product attracts GST @28% and Compensation Cess as 71%. 6.12 Consequently, the AE Branch, CGST Udaipur conducted a search at the premises of M/s SPPL and during their investigation, it was fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-drive containing the videos of the manufacturing process adopted by M/s GTPPL with use of machines, videographed during the proceedings of search conducted on 25.04.2023. RECORDS OF PERSONAL HEARING 8. Personal hearing was scheduled in the matter on 09.11.2023. However, the respondent requested an adjournment of the same vide their email dated 09.11.2023. Consequently, the personal hearing was re-scheduled on 17.11.2023 which was attended by the appellant as well as the respondent. Sh. Jasveer Khichar. Joint Commissioner. CGST Udaipur appeared on behalf of the Revenue and Sh. Sanjay Jhanwar. Sr. Adv.. Sh. Keshav Maloo, CA. and Sh. Rahul Lakhwani. Adv attended the hearing on behalf of the taxpayer. 8.1 The Joint Commissioner contended that the original Ruling was pronounced after the lapse of 90 (ninety) days. As such, it is void ab-initio. He iterated the written submissions dated 08.11.2023 on merits. 8.2 The counsel for the taxpayer raised following three preliminary objections:- (i) An Appeal under Section 100 of the CGST Act 2017 before AAAR can be filed only against order under Section 98(4) whereas this appeal has been filed against letter under Section 104 dated 10.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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