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TMI Blog2024 (12) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... tories Limited vs. Union of India and Others], vide a common judgment, dated 12-09-2023, are being called into question in these appeals, being Writ Appeal No.09 of 2023 [Zydus Wellness Products Limited vs. Union of India and Others] and Writ Appeal No.10 of 2023 [Alkem Laboratories Limited vs. Union of India and Others]. The appeals are being disposed of by this common judgment. 2. To comprehend the matter in its proper perspective, it is imperative to briefly consider the genesis of the dispute. The appellant, in Writ Appeal No.09 of 2023, incorporated under the Companies Act, 2013, on 23-04-2010, is engaged in the manufacture and sale of pharmaceuticals, cosmetics, food and beverages, falling under Chapters 21 and 33 of the GST Tariff of India. It has two manufacturing Units, both located in Namchi, Sikkim. The appellant in Writ Appeal No.10 of 2023 has five manufacturing Units, all located in Namthang, Sikkim and are engaged in manufacturing medicaments and food, falling under Chapters 30 and 21 of the GST Tariff of India. 3. The respondent no.1, the Department of Revenue, Ministry of Finance, issued notification no.20/2007-CE, dated 25-04-2007, as amended by the notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner filed claim applications under the BSS for the period upto December, 2021 manually and as a matter of precaution after the allocation of UIDs, online as well, on the ACES-GST portal. The claim applications as detailed in the writ petition for Unit-I and Unit-II are still pending approval, except upto the period December, 2018, for which the budgetary reimbursement was allowed. 4. In the case of Alkem Laboratories Limited, reliance was placed on the same notifications supra. On 28-08-2019, Cachet Pharmaceutical Private Limited was acquired by the petitioner by way of slump sale. The said Unit under the notification of 2007, was entitled to exemption for a period of ten years, from the date of commercial production, i.e., upto 09-03-2027. On notification of the BSS on 05-10-2017, a new UID was allotted to the petitioner. On 05-12-2019, after the acquisition, the petitioner filed an application before the respondents no.3 and 4 seeking issuance of fresh UID for Unit-V, under the new GSTIN registration, this was denied, consequently, the petitioner could not file online claims for the budgetary support. The claims were thus filed manually for the said period. 5. The common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Under the CGST Act, 2017, it is the 'person' as defined under section 2(84) who is liable to the tax thereunder. Consequently, the Budgetary Support Scheme which is limited to the tax which accrues to the Central Government under the CGST Act, 2017 and IGST Act, 2017 is liable to be paid by the 'person'. Reading the definition of 'person' under section 2(84) and the requirement of registration under section 22 of such 'persons' makes it clear that Zydus Nutritions Limited (later Zydus Wellness Products Limited) and Alkem Laboratories Limited were required to be registered under section 22 after the change in ownership. Accordingly and admittedly, Zydus Nutritions Limited was registered under Rule 10(1) on 26.03.2019 and Alkem Laboratories Limited on 3.10.2019. Consequently, both the petitioners who were separate and distinct legal entities from the previous 'persons', i.e., Zydus Wellness-Sikkim and Cachet Pharmaceuticals Private Limited, who were eligible under exemption notification 20/2007-CE could not have filed the application for budgetary support under paragraph 7 of the Budgetary Support Scheme. The petitioners, as rightly contended by the respondents, were not 'eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mphasised that, the overall BSS was to be valid upto 30-06-2027 as provided in paragraph 5.3 of the BSS. That, in the assailed judgment reference was made to paragraphs 5.7, 7.1 and 7.2 of the said BSS, which are in fact procedural provisions for payments of the budgetary support and the word 'manufacturer' in paragraphs 5.7 and 7.1 of the BSS means the "eligible Unit". That, paragraphs 5.9.1, 8.1, 8.2, 8.5, 9.1, 9.3 and 9.5 of the BSS clarify this aspect. Thus, a person having a different GST registration is a mere matter of procedure and has no bearing to the eligibility for budgetary support when the 'Unit' remains in the same location, the specified goods manufactured remain the same as also the date of commencement of commercial production. The learned Single Judge was of the view that the manufacturer must be a person and in case of change of ownership or expansion, the person (transferee) claiming budgetary support, becomes different from the person, who made the investment to set up the Unit. It was observed that a GST registered person, who is different from the GST registered person who invested and set up the Unit, is not entitled to the BSS benefit. Learned Senior Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first navigate the contents of the notification no.20/2007-CE, dated 25-04-2007, which was rescinded vide notification no.21/2017-CE, dated 18-07-2017. The relevant paragraph of the notification provides as follows; ".............................................................. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) other than those mentioned in the Annexure and cleared from a unit located in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim, as the case may be, from so much of the duty of excise leviable thereon under the said Act as is equivalent to the duty payable on value addition undertaken in the manufacture of the said goods by the said unit. .............................................................." [emphasis supplied] 13. The notification of 2007 was issued with the specific purpose of (i) exempting the goods specified in the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 1.2 Units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance, as listed under para 2 below would be considered eligible under this scheme. All such notifications have ceased to apply w.e.f. 01.07.2017 and stands rescinded on 18.07.2017 vide notification no. 21/2017 dated 18.07.2017. The scheme shall be 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. 2. The erstwhile Schemes which were in operation on 18.07.2017 were as follows: .................................................................................. 2.3 North East States including Sikkim- Notification no. 20/2007-CE dated 25.04.2007 as amended from time to the time. ......................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -CE dated 10.06.2003 were being cleared. 4.3 'Residual period' means the remaining period out of the total period not exceeding ten years, from the date of commencement of commercial production, as specified under the relevant notification listed in paragraph 2, during which the eligible unit would have been eligible to avail exemption for the specified goods. The documentary evidence regarding the date of commercial production shall be submitted in terms of para 5.7. ..................................................................." [emphasis supplied] The notification thus clarifies that the BSS is a measure of goodwill, only for the Units which were eligible for drawing benefits under the earlier excise duty exemption. It was emphasised that it otherwise had no relation to the erstwhile schemes. The notification further provided that such benefit would be provided to eligible existing manufacturing Unit as it existed prior to migration to GST, to a manufacturer that commences commercial production on or after 01-04-2007, but not later than 31-03-2017. 15. It is not in dispute that the Zydus Wellness - Sikkim was set up in Sikkim on 23-04-2010 and started its commercial pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mably as no such insertion materialised. 17. Paragraph 1.2 of the BSS, dated 05-10-2017, provides as follows; "1.2 Units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance, as listed under para 2 below would be considered eligible under this scheme. All such notifications have ceased to apply w.e.f. 01.07.2017 and stands rescinded on 18.07.2017 vide notification no. 21/2017 dated 18.07.2017. The scheme shall be 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." [emphasis supplied] 18. Paragraph 4.1 of the BSS defines "eligible Unit" which is as follows; "4.1 'Eligible unit' means a unit which was eligible before 1st day of July, 2017 to avail the benefit of ab-initio exemption or exemption by way of refund from payment of central excise duty under notifications, as the case may be, issued in this regard, listed in para 2 above and was availing the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.' Orders are not like old wine becoming better as they grow older." (iii) Reading more into the definition of "eligible Unit" by the learned Single Judge and interpreting it to mean that change in the person filing the claims would no longer qualify the manufacturers as eligible Units, appears to be a misreading/ misinterpretation of the provision by including dimensions and facets which the provision itself does not envision or even contemplate. It is a settled principle of law that the Courts should not read anything into a statutory provision which is plain and unambiguous. The language employed in a statute is the determinative factor of the legislative intent and the intention of the legislation must be found in the words used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DPIIT on the same has not yet been communicated to this office. However, the DPIIT vide OM F.No. 10/1/2021-GSTSS dated 20.10.2021 in the matter of eligibility of M/s. Pritika Autocast Ltd. following amalgamation with M/s. Pritika Auto Industries Ltd. has decided that "after due examination and discussion with CBIC and as per the Scheme guidelines, if any unit undergoes for relocation, expansion and change of ownership, is not eligible under the Scheme of Budgetary Support". 3. Since, the Scheme of Budgetary Support is introduced by the Department of Industrial Policy & Promotion, therefore, DPIIT is also requested take a call on the subject issue of change of constitution/ ownership in respect of the following units referred to this office by field formations and DPIIT respectively. ..................................................." [emphasis supplied] This observation vide the office memorandum, apparently remained uncommunicated to the appellants. It was further noted in the office memorandum (supra), that, in a case of change of ownership, M/s. Alkem Laboratories Limited did not appear to be eligible for the benefit under BSS as held by DPIIT in the similar case of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia as follows; "................................................................................. 2. In this regard, I am directed to inform that the reply on the issue of M/s Cipla Ltd. has already been sent to your office vide this office letter of even no. dated 21.12.2021 (copy enclosed) 3. Further, the matter related to eligibility of unit under the Budgetary Support Scheme in case of expansion, relocation of existing unit or change of ownership/constitution was referred to DPIIT for clarification vide this office OM of even no. dated 03.03.2022 (copy enclosed). 4. In this regard, the DPIIT vide their OM F.No.10/1/2021-GSTSS dated 31.03.2022 has referred to their letter dated 20.10.2021 (copy enclosed) wherein the matter of eligibility of M/s. Pritika Autocast Ltd. following amalgamation with M/s. Pritika Auto Industries Ltd. has been decided that "after due examination and discussion with CBIC and as per the Scheme guidelines, if any unit undergoes for relocation, expansion and change of ownership, is not eligible under the Scheme of Budgetary Support". 5. In view of the decision taken by DPIIT vide their above referred OM dated 20.10.2021, the issues of M/s Alke ..... X X X X Extracts X X X X X X X X Extracts X X X X
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