TMI Blog2024 (3) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... fter offering an opportunity of personal hearing to the appellant - The matter is remanded to the Lower Authority for re-examination and passing of appropriate fresh orders into the matter, after following the principles of natural justice. - DR. RAM NIWAS AND DR. D. JAGANNATHAN, MEMBER Represented by : Mr. S. Harishankar, Chartered Accountant. S Chandrakumar, Director. (Passed by Tamil Nadu State Appellate Authority for Advance Ruling under Section 101(1) of the Tamil Nadu Goods and Services Tax Act, 2017) Preamble 1. In terms of Section 102 of the Central Goods Services Tax Act 2017/Tamil Nadu Goods Services Tax Act 2017 ( the Act , in Short), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer or the applicant within a period of six months from the date of the Order. Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application number GST-ARA-01 dated 12 th August 2022 sought an advanced ruling, as to whether The classification of output, as supply of goods, is correct? The classification Water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) under heading 2201, is correct? 2.2 After detailed submissions, and after hearing the appellant, the Advance Ruling Authority, passed a ruling vide its order 20/ARA/2023 dated 19.06.2023, holding that, Classification of outputs, as sale of goods is correct, subject to the conditions that applicant follows the guidelines mentioned in para 4.9 of the order. The classification of water sold by the applicant is correctly classifiable as per notification No. 2/2017-Central tax rate, as under: SI.No. Heading Description Rate 99 2201 Water (other than aerated, mineral, distilled, medicinal, ionic, battery, demineralized and water sold in sealed container) NIL 3. Aggrieved, M/s Mannarai Common Effluent Treatment Plant (P) Limited preferred the subject appeal. In the grounds of appeal, they stated, inter alia, that The order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of M/s Palsana Enviro Protection Ltd (Gujarat AAR) and M/s Kasipalayam CETP (TN AAR). They submitted that according to them the subject goods would fall under CTH 2853 - Other inorganic compounds and not under CTH 2201. They submitted that according to them even if considered as water (CTH 2201), it should be treated as demineralized water. 5. Under the additional submissions made by the AR on behalf of the appellant, documents like test report No. V2300446A dated 12.10.2023 of M/s. South India Textile Research Association (SITRA), Process Explanation, Additional Written submissions, Consent Order dated 24.03.2023 of Tamilnadu Pollution Control Board, relevant case laws, CBIC Circular No. 179/11/2022-GST dated 03.08.2022, etc., have been furnished by the appellant. Further, under the additional written submissions, the following points were highlighted, viz., The input in the treatment processing done by their plant is the effluent discharged from the textile dyeing industries. The effluent contains dyes, chemicals, salts etc. and the total dissolved solids is 7932 mg/1. The effluent is subject to extensive processing at the treatment plant which includes equalization, biologica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nodal organization, specifies the name of the product as RO Permeate (Trade Effluent II) and the only specified use permitted is reuse by the dyeing units. Hence the RO permeate is prohibited from being used for any other purpose such as drinking, irrigation, river discharge, and therefore cannot be termed as water falling under heading 2201. c) Applicant's RO Permeate cannot be equated with Sewage treatment The advanced ruling authority has equated sewage treatment plant with the effluent treatment plant run by the applicant. The authority has failed to appreciate the fact that the characteristics of the dyeing effluent and sewage are entirely different. Further the norms for sewage plants are different, as the treated sewage water is allowed to be permitted to be used for irrigation, discharged into water bodies. But the RO Permeate can only be discharged for reuse in dyeing units and cannot be used for irrigation or discharged into water bodies. Hence the exemption given to treated sewage water under the heading 2201 is not applicable to the RO permeate. This has been upheld by Gujarat AAR in case of Palsano Enviro while holding, This clearly shows the intention of the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 2201, and held as exempted from payment of GST as laid down in SI. No. 99 of the Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017. 6.2 We observe that in order to arrive at the said decision, the Advance Ruling Authority has considered the Test report No. V2000610 dated 30.03.2021 furnished by M/s. South India Textile Research Association (SITRA) Textile Testing and Service Centre, in respect of a sample relating to M/s. Kasipalayam Common Effluent Treatment Plant (P) Ltd. Further, it has been stated in the said order that treated sewage water attracts 'Nil' rate of GST, as clarified in CBIC Circular No. 179/11/2022 dated 03.08.2022, and that the same analogy would apply to the case in hand. 6.3 Apart from the Appeal filed in Form GST ARA-02 dated 23.09.2023, before the Appellate Authority for Advance Ruling (received on 26.09.2023), it is seen that the appellant has also filed additional submissions during the personal hearing on 07.12.2023, wherein the applicant had furnished additional grounds/documents in respect of their appeal, which has been reproduced in detail in para 5 above. 6.4 Under the additional submissions made, the appellant brings to our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue in the instant case requires a re-examination by the AAR, especially in view of the fact that a test report is now available in respect of a sample of the appellant themselves, and in view of the fact that such other documents like consent letter, process explanation, etc., have also been adduced by the appellant. 6.7 Accordingly, we hold that interest of justice will be met by remanding the case to the lower authority, with a direction to re-visit the issue, take into cognizance the documents now available such as the test report, consent order, etc., and to pass necessary orders as per the provisions of law, after offering an opportunity of personal hearing to the appellant. All aspects of the matter are kept open for decision by the AAR. We further find that this authority is empowered vide Section 101(1) of the CGST/TNGST Acts, 2017 to pass such orders as deemed fit. 7. In view of the above, we order as under ORDER The Advance Ruling No. 20/AAR/2023 dated 19.06.2023 passed by the Lower Authority in the case of the appellant is set aside. The matter is remanded to the Lower Authority for re-examination and passing of appropriate fresh orders into the matter, after follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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