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2020 (2) TMI 1607 - AAAR - GSTLevy of IGST - Job-work - import of iron ore for conversion into pellets and export the resultant product (Iron ore pellets) back to same supplier - import duty is not applicable in view of the exemption under General Exemption No. 66 (Exemption Notification No. 32/97-Cus dated 1st April 1997) for job work - liability of applicant as recipient of imported iron ore to pay the IGST - input tax credit - IGST so paid as per Section 16 of the CGST Act - refund of unutilised input tax credit on export of services as per Section 16(3)(a) of the IGST Act and 54(3) of the CGST Act - time limitation. HELD THAT - It is an admitted position of the appellant that after conversion of iron ore into pellets the pellets are exported to the non-resident party or to any other non-resident parties as nominated by the non-resident with whom they have/intend to have contract. Hence their contention that they are exporting only services but not goods is not tenable. Whether the said goods exported by appellant are subjected to export duty whereby the proviso to Sec. 54(3) ibid is attracted? - HELD THAT - The statutory provision i.e proviso to Sec.54 (3) ibid speaks of goods which are subject to export duty . The phrase subject to export deity is equivalent to leviable to export duty in the given context. It is not denied that the goods exported are covered under the Export Tariff as being subject to i.e. leviable to export duty though by an exemption Notification such export duty payable is NIL. It is well-settled principle that goods being exempted or chargeable to Nil rate of duty by virtue of Notifications etc. does not remove the goods from the category of those leviable to duty . In the instant case also the exported goods are specified in the Second Schedule to the Customs Tariff Act 1975 as subjected to export duty; while by a Notification issued under Section 25 (1) of the Customs Act the same were exempted. Hence the ratio of and principles laid down in the above decisions is clearly applicable whereby the goods have to be treated as falling within the criterion subject to export duty - the phrase subject to export duty is used in the proviso without any qualification/restriction such as other than those exempted or Nil rate as has been used in the clause (ii) immediately preceding the proviso to Section 54(3). It is well-settled that the words in a statute must be given their plain natural meaning and that the Legislature when used certain words/phrases in a given situation and not used such words/phrases in another situation there is a conscious legislative intent in such non-usage. We further find that the appellants have also not provided any authoritative texts/support to negate the finding of the lower authority in this regard. On a careful reading of the correct position of the statute vis-a-vis the appellant s contention it clearly emerges that the language employed in the statute as discussed in the paras above are plain and unambiguous and it amply conveys the legislative intent. Time Limitation - HELD THAT - The AAR decision was communicated to appellant on 21.05.2019. The appeal was filed on 26.06.2019 with regard to the ruling rendered vide point (4) mentioned therein. The same was filed in time and has been answered in the preceding paragraphs. However the additional grounds of appeal preferred by the appellant vide their letter Ref No. CCPL/GST/19-20/23 dated 16.01.2020 are barred by limitation as contained in Section 100(2) of the CGST Act 2017 as it is filed beyond a period of thirty days from the date on which the ruling sought to be appealed against is communicated to the concerned officer the jurisdictional officer and the applicant. The said additional grounds of appeal filed by the appellant vide their letter Ref No. CCPL/GST/19-20/23 dated 16.01.2020 is also barred by the further extended period of limitation as contained in the proviso to Section 100(2) of the CGST Act 2017 which provided a further period not exceeding thirty days - As the additional submissions vide which the additional grounds for appeal have been preferred are hit by limitation this Authority being bound by the statute is not empowered to entertain the same Hence the said additional ground is rejected on the grounds of limitation and thereby without any need to delve into the merits of the same. The Ruling given by AAR Goa being consistent with the extant statute is maintained. The appeal dated 26.06.2019 as well as the additional grounds of appeal dated 16.01.2020 of the appellant are rejected.
Issues Involved:
1. Applicability of IGST on import of iron ore for conversion into pellets and subsequent export. 2. Liability of the appellant to pay IGST on the imported iron ore. 3. Eligibility of the appellant to avail input tax credit for IGST paid. 4. Eligibility of the appellant to claim a refund of unutilized input tax credit on export of services. 5. Additional grounds of appeal regarding the applicability of IGST on imported iron ore. Detailed Analysis: 1. Applicability of IGST on Import of Iron Ore: The appellant sought an advance ruling on whether IGST at 5% is applicable on the import of iron ore for conversion into pellets and subsequent export. The lower authority held that the appellant is liable to pay IGST on the import of iron ore. 2. Liability to Pay IGST: The appellant contended that the lower authority erred in holding that they are liable to pay IGST on imported iron ore. They argued that the provisions of Section 3 of the Customs Tariff Act, 1975, read with Section 5(1) of the IGST Act, 2017, were not applicable. However, the appellate authority found that this ground of appeal was barred by limitation as it was filed beyond the statutory period. 3. Eligibility to Avail Input Tax Credit: The lower authority ruled that the appellant is eligible to avail input tax credit towards the payment of IGST under Section 16 of the IGST Act. This ruling was not contested by the appellant in the appeal. 4. Eligibility to Claim Refund of Unutilized Input Tax Credit: The appellant contested the lower authority's ruling that they are not eligible for a refund of unutilized input tax credit on the export of services. The appellant argued that they are exporting services, not goods, and thus the proviso to Section 54(3) of the CGST Act, which disallows refunds where goods exported are subject to export duty, should not apply. The appellate authority found that the appellant's contention was not tenable as the exported iron ore pellets are goods and are subject to export duty, even if the duty rate is nil. The appellate authority upheld the lower authority's ruling, stating that the statutory provision clearly disallows refunds for goods subject to export duty. 5. Additional Grounds of Appeal: The appellant introduced an additional ground of appeal, arguing that the lower authority erred in holding them liable to pay IGST on imported iron ore. The appellate authority found this additional ground to be barred by limitation, as it was filed beyond the statutory period allowed for appeals. Consequently, the additional ground was rejected without delving into its merits. Conclusion: The appellate authority upheld the lower authority's ruling that the appellant is liable to pay IGST on the import of iron ore, is eligible to avail input tax credit, but is not eligible for a refund of unutilized input tax credit on the export of goods or services. The additional grounds of appeal were rejected on the basis of being time-barred. The appeal dated 26.06.2019 and the additional grounds of appeal dated 16.01.2020 were both rejected.
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