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2019 (12) TMI 1331 - AAAR - GSTRectification of error - mistake apparent on the face of the record - intermediary services - whether the services rendered by the Appellant was export of service or not, and not the classification of services as is being made out by the Appellant vide the submissions being made in present application? - HELD THAT - Under the GST law, there are certain goods and services, which have declared either as non-taxable supplies or as an exempt supply in terms of section 2(78) and section 2(47) of the CGST Act, 2017. While Schedule Ill to the CGST Act, 2017 enumerate the activities or transactions which shall be treated neither as a supply of goods nor a supply of services, goods and services, which have been declared exempt supply are notified by the Notification No. 2/2017-C.T. (Rate) dated 28.06.2017 and Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 respectively. Therefore, we are of the opinion that provision of section 97(2)(e) of the CGST Act, 2017 gives us the jurisdiction to decide whether any goods or services or both are liable to GST or not. The aforesaid provision does not enable us to determine the place of supply of any goods or services or both. Hence, the Appellant has misinterpreted the provision of section 97(2)(e) ibid - it is discernible that there is clearly dispute in the interpretation by the Appellate Authority and that of the Appellant with regard to section of the CGST Act, 2017. Since there is dispute in the interpretation of the legal provisions of section 97(2)(e) of the CGST Act, 2017, which certain leaves the scope for argument and debate, there is absolutely no question of any error apparent from the face of record, as was being made out by the Appellant - the allegations, made by the Appellant with regard to the error crept in the impugned order which is apparent from the face of record, is without any rationale, and hence do not merit consideration. Application rejected.
Issues Involved:
1. Alleged error of law by the Appellate Authority for Advance Ruling (AAAR). 2. Failure to consider CBIC Circular No. 107/29/2019-GST dated 18.07.2019. 3. Jurisdiction of the Appellate Authority to determine place of supply under Section 97(2) of the CGST Act, 2017. 4. Application of case laws and judicial pronouncements to the matter. Detailed Analysis: 1. Alleged Error of Law by the Appellate Authority for Advance Ruling (AAAR): The Appellant alleged that the AAAR committed an error of law apparent on the face of the record by not applying its mind to the provisions of law which give it jurisdiction. The Appellant drew an analogy between Section 102 of the CGST Act, 2017 and Order XLVII of the Civil Procedure Code, 1908, emphasizing the similar phraseologies "any error apparent on the face of record" and "mistake or error apparent on the face of the record." They cited several judicial pronouncements to support their contention, including: - Satya Narayan Laxmi Narayan Hegde Vs. Malikarajun Bhavanappa Tirumale [AIR (1960) SC 137] - T.S. Balaram, ITO vs. Volkart Bros. [(1971) 82 ITR 50 (SC)] - Sir Hari Shankar pal and Another Vs. Anath Nath Mitter and others [1949 FCR 36] - Parsion Devi and Others Vs. Sumitri Devi and Others [1997 (8) SCC 715] - Dinkar Khindria Vs. CCE, New Delhi, 2000 (38) RLT 442 The Appellant argued that the AAAR did not apply its mind to the true meaning of "intermediate services" and disposed of the case without discussing its ramifications, declaring it had no jurisdiction to determine the place of supply under Section 97(2) of the CGST Act, 2017. 2. Failure to Consider CBIC Circular No. 107/29/2019-GST dated 18.07.2019: The Appellant alleged that the AAAR failed to appreciate the ramifications of the CBIC Circular No. 107/29/2019-GST dated 18.07.2019, which clarifies issues relating to "intermediary services." The Circular provided specific exclusions for a person supplying goods or services on their own account. The Appellant contended that had the AAAR considered the Circular, it would have concluded that the Appellant's activities were covered by Section 13(2) of the IGST Act, making the location of the recipient the place of supply of service. The Appellant cited the Supreme Court judgment in Paper Products Ltd. Vs. Commissioner of Central Excise [1999 (112) E.L.T. 765 (S.C.)] to support their argument that Circulars are binding on the Department and should be applied retrospectively if beneficial to the assessee. 3. Jurisdiction of the Appellate Authority to Determine Place of Supply under Section 97(2) of the CGST Act, 2017: The Appellant argued that the statute conferred wide jurisdiction under Section 97(2)(e) of the CGST Act to determine the liability to pay tax on the impugned transaction of service. They cited the Supreme Court judgment in Smt. Ujjam Bai Vs. State of U.P. [1962 (4) TMI 90 - SUPREME COURT] to support their claim that the jurisdiction to determine liability to pay tax can extend to all related questions of law and fact. The Appellant contended that the AAAR's decision to sidestep its jurisdiction on the ground that Section 97(2) does not enumerate "determination of place of supply" was erroneous. 4. Application of Case Laws and Judicial Pronouncements to the Matter: The Appellant relied on several case laws to argue that the law declared by the Supreme Court or High Court operates retrospectively, and a clarificatory Circular issued under Section 168(1) of the CGST Act, 2017, should also have retrospective effect. They cited: - M.A. Murthy vs. State of Karnataka [2003] 185 CTR 194 (SC) - Salmond on Jurisprudence, Tenth Edition - Commissioner of Income Tax vs. Smt. Aruna Luthra [2001] 170 CTR 0073 (P&H) - Mepco Industries Ltd. Vs. CIT [2009] 319 ITR 208 (SC) The Appellant argued that the AAAR's order should be rectified based on the law declared by the Supreme Court or High Court and the CBIC Circular, as these have retrospective effect. Conclusion: The Appellate Authority rejected the application for rectification under Section 102 of the CGST Act, 2017, on the grounds that: - The primary issue raised by the Appellant was to determine whether the services rendered were export of service, not the classification of services. - The determination of export of services requires the determination of the place of supply, which is not specified under Section 97(2) of the CGST Act, 2017. - The Appellant misinterpreted Section 97(2)(e) of the CGST Act, 2017, as it does not confer jurisdiction to determine the place of supply. - There was no error apparent on the face of the record, as the issue involved a debatable point of law. The application filed by the Appellant seeking the amendment in the AAAR Order dated 22.03.2019 was rejected.
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