2021 (7) TMI 1370 - AAAR - GST

Maintainability of appeal - Admissibility of input tax credit - inward supply of local scrap and sponge iron used by the appellant for manufacture of M.S. billets - procedure adopted and the documents/records maintained by the appellant can be deemed to be a sufficient compliance of the conditions and restrictions or not - Section 16 of GST Act and Rule 36 of GST Rules - HELD THAT - It is found that the first proviso to section 98(2) of CGST Act, 2017 is very clear, that the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in case of an applicant under any of provisions of this Act. Section 100(1) mandates that only a ruling pronounced under sub-section (4) of section 98 of CGST, Act, 2017 can be appealed before the Appellate Authority for Advance Ruling. The instant application is not maintainable because it is covered in the first proviso to section 98(2) of the Act - Appeal dismissed.

Issues Involved:
1. Procedural compliance for input tax credit (ITC) admissibility.
2. Jurisdiction and scope of Authority for Advance Ruling (AAR).
3. Investigation and adjudication status affecting AAR application.
4. Applicability of Section 97(2) and Section 98(2) of the CGST Act, 2017.

Issue-wise Detailed Analysis:

1. Procedural Compliance for Input Tax Credit (ITC) Admissibility:
The appellant, M/s Jaideep Ispat And Alloys Pvt. Ltd., sought an advance ruling on whether their procedure and documentation for procuring scrap and sponge iron comply with the conditions for claiming ITC under Section 16 of the GST Act and Rule 36 of the GST Rules. The appellant detailed their process, including contracts with vendors, purchase orders, invoices, goods receipt, quality inspection, and verification of vendor GST compliance. They argued that these steps ensure compliance with the conditions for ITC, such as possession of tax-paying documents, receipt of goods, tax payment, and return filing.

2. Jurisdiction and Scope of Authority for Advance Ruling (AAR):
The AAR ruled that the appellant's question was procedural and not covered under Section 97(2) of the CGST Act, 2017, which outlines the scope of questions for advance rulings. The appellant contended that their question was about the admissibility of ITC, not merely procedural compliance. However, the AAR maintained that validating procedures or documents for ITC claims is outside their purview.

3. Investigation and Adjudication Status Affecting AAR Application:
The appellant's application was rejected by the AAR under the first proviso to Section 98(2) of the CGST Act, 2017, which prohibits admitting applications if the question is already pending or decided in any proceedings. The appellant's unit had been investigated, and adjudication was ongoing, which made their application inadmissible. The appellant argued that their unit was separate, but the authority found it to be the same entity under investigation.

4. Applicability of Section 97(2) and Section 98(2) of the CGST Act, 2017:
The appellate authority upheld the AAR's decision, stating that the appellant's question did not fall under any clause of Section 97(2). The authority also noted that the application was rightly rejected under Section 98(2) as the issues were already adjudicated. The appeal was dismissed as it did not meet the criteria for an advance ruling under Section 98(4).

Conclusion:
The appellate authority upheld the AAR's rejection of the appellant's application for an advance ruling, citing non-compliance with Section 97(2) and Section 98(2) of the CGST Act, 2017. The appeal was dismissed on all counts, affirming that the procedural validation sought by the appellant was outside the scope of advance rulings and that the ongoing investigation precluded the application.

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