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2021 (3) TMI 1145 - AAAR - GSTRectification of Mistake - error apparent on the face of record - Applicant submits that the lower authority (AAR) had held that their activity would qualify as supply of goods attracting 12% whereas in the impugned order dated 27.9.2020, their activity has been classified as attracting 18% - Applicant submits that it is erroneously concluded from the submission of the appellant that it is 'impossible to satisfy the 25% criteria' under Entry 3A of the subject notification; that this is factually incorrect and misconstruction of the submissions made by the Appellant. HELD THAT - Section 102 of the CGST Act provides that the Appellate Authority may amend any order passed by it under Section 101 so as to rectify any error apparent on the face of the record. What constitutes an error apparent on the face of the record has been laid down by the Supreme Court in the case of ASSISTANT COMMISSIONER, INCOME TAX, RAJKOT VERSUS SAURASHTRA KUTCH STOCK EXCHANGE LTD 2008 (9) TMI 11 - SUPREME COURT . The Apex Court held that a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. In this case, the question on which an advance ruling was sought was whether the supply is a supply of goods or supply of service or a composite supply. Additionally, a ruling was also sought on the rate of tax applicable for the nature of supply. The lower Authority had held that the supply in this case was a composite supply where the principle supply was a supply of goods and the rate of tax applicable is 12%. Before us, this finding by the lower Authority was assailed and it was the argument of the Appellant that the supply is a supply of service and they were eligible for the exemption given to pure services rendered to the municipal authority. This argument did not find favour with us and on a complete examination of the case which included taking into consideration the terms of the Agreement with the Thane Municipal Corporation as well as the citations relied upon by the Appellant, we have concluded that the supply of the Appellant is a composite supply with supply of service being the principle supply. The principle supply was classified under 999112 where the applicable rate of tax is 18%. The ruling given by the lower Authority was modified accordingly. The supply is a composite supply with the principal supply being a supply of service. Since the determination of the rate of tax was also a subject matter in appeal before us, we have examined the applicant's eligibility to exemption as pure services under entry 3 of Notf No 12/2017 CT(R), and also their alternate claim for exemption under entry 3A of the said exemption notification. Having found that they are not eligible for either entry under the exemption notification, we have proceeded to pass an order on the applicable rate of tax for the said service which we held to be 18%. Therefore, there is no error in the impugned order which requires to be rectified. A mistake apparent from the record is one to point out and for which no elaborate argument is required. It must be a glaring, obvious or self-evident mistake. A mistake which is not gatherable from the record as it stands and requires for being shown to be a mistake, matter or evidence extraneous to record is not a mistake apparent from the record. In a nutshell we hold that the provisions of Section 102 of the CGST Act cannot be pressed into play in order to make a revision in a matter on which there could be two plausible interpretations. - a decision on a debatable point of law or facts is not a mistake apparent from the record and the debatable issue cannot be the subject of an order of rectification. There is absolutely no question of any error apparent from the face of record in the impugned appeal order, as is being made out by the Applicant. ROM application dismissed.
Issues Involved:
1. Classification of the activity and applicable tax rate. 2. Interpretation of Clause 27 of the Agreement with Thane Municipal Corporation. 3. Compliance with the 25% criteria under Entry 3A of Notification No 12/2017 CT (R). 4. Consideration of rulings in similar cases. Issue-wise Detailed Analysis: 1. Classification of the Activity and Applicable Tax Rate: The applicant argued that the lower authority classified their activity as a supply of goods attracting 12%, whereas the appellate authority reclassified it as attracting 18%. The appellate authority clarified that in examining the appeal, they considered the nature of the supply and the applicable tax rate, which were part of the original application for advance ruling. They concluded that the supply was a composite supply with the principal supply being a service classified under 999112, attracting an 18% tax rate. The authority emphasized that the principle of "no reformatio in peius" does not apply as the appeal covered all issues originally present in the application for advance ruling. 2. Interpretation of Clause 27 of the Agreement with Thane Municipal Corporation: The applicant contended that Clause 27, which states that the transfer of goods is contingent on the renewal of the contract, was not correctly interpreted. The appellate authority maintained that this clause was considered and discussed in the impugned order. They concluded that the applicant's attempt to re-open the appeal under the guise of rectification was not permissible. The authority reiterated that the transfer of goods during the contract period was anticipated and thus classified the supply as a composite supply. 3. Compliance with the 25% Criteria under Entry 3A of Notification No 12/2017 CT (R): The applicant argued that the impugned order erroneously concluded that they could not meet the 25% criteria. They asserted that the contract did not envisage a supply of goods and that the supply of goods, if any, was contingent on the renewal of the contract. The appellate authority found that the applicant was attempting to re-open the appeal and emphasized that the eligibility for exemption under Entry 3A was discussed in detail in the impugned order. They concluded that the decision on this matter was not an error apparent on the face of the record and did not warrant rectification. 4. Consideration of Rulings in Similar Cases: The applicant claimed that the impugned order failed to consider rulings in similar cases, such as VFS Global Services Pvt Ltd and Super Wealth Financial Enterprises Pvt Ltd. The appellate authority noted that the ruling in VFS Global Services was based on different facts and circumstances and did not have persuasive value. The ruling in Super Wealth Financial Services was not relied upon during the personal hearing nor included in the additional submissions. The authority held that the applicant's reliance on rulings in other cases was an attempt to review the order, which was beyond the scope of rectification. Conclusion: The appellate authority concluded that the issues raised by the applicant in the ROM application were debatable and not errors apparent on the face of the record. They emphasized that rectification under Section 102 of the CGST Act is limited to patent, manifest, and self-evident errors that do not require elaborate discussion or argument. As such, they rejected the ROM application filed by the applicant.
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