2024 (4) TMI 809 - HC - GST

Eligibility for concessional rate of GST in terms of Sr. No. 201A of Notification No. 01/2017-CGST (Rate) - Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heaters are Waste to Energy plant or not - HELD THAT - To get the benefit of lower rate of GST it was the Biomass / Agro Boilers as well as the Agro Waste Fluid Thermic Heaters produced by the petitioner does not fall under any category from (a) to (h). The claim of the petitioner is that it falls in the category of Waste to Energy Plant / devices is also not considered by the Appellate Authority on the ground of Waste to Energy Plant can be considered only the product which produces either by Biogas / Bio-CNG / enriched Biogas or Power from urban industrial and agricultural waste. The power used by the Government of India Ministry of Environment Forest and Climate Change Notification dated 8th April 2016 in the objectives of the scheme for Solid Wastes Management Rules the petitioner has tried to suggest that the power includes the steam as held by this Court in the decision in the case of Jay Chemical Industries Ltd 2020 (3) TMI 231 - GUJARAT HIGH COURT in which this Court has held that the steam can be considered as power to grant the benefit of deduction under Section 80IA(4) of Income Tax Act. Reference was also made by the Appellate Authority on the Gujarat Waste to Energy Policy 2016 dated 28th March 2016 which refers to the generation of the power in form of electricity power. Therefore while analyzing the Entry at Serial No. 234/201A the renewable energy devices and parts for the manufactured would refer to the Biogas Solar Power generating system Wind mills or Wind Mills Operating Electricity Generator and Waste to Energy Plant relating thereto only. Therefore in the facts of the case the petitioner is stated to have been manufacturing the Boilers / thermal heaters by using the non-conventional fuel would not be qualified for Waste to Energy Plants and devices as rightly held by the appellate authority. This petition being devoid of any merits is accordingly dismissed.

Summary

Issues Involved:

1. Classification of Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heaters.
2. Eligibility for concessional GST rate.
3. Validity of the orders passed by the Gujarat Advance Ruling Authority and the Gujarat Appellate Authority for Advance Ruling.
4. Entitlement for refund of differential tax.
5. Jurisdiction of the High Court under Article 226.

Summary:

1. Classification of Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heaters:
The petitioner is engaged in manufacturing various industrial boilers, including Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heaters, using non-conventional fuels like municipal wastes, biomass waste, and agro waste. The petitioner argued that these products should be classified under Chapter Heading No. 8402 19 90 of the Customs Tariff Act, 1975, as adopted for GST classification.

2. Eligibility for Concessional GST Rate:
The petitioner claimed eligibility for a lower GST rate of 5% or 12% based on Sr. No. 201A of Notification No. 01/2017-CGST (Rate), which prescribes rates for renewable energy devices. The Gujarat Advance Ruling Authority rejected this claim, stating that the petitioner did not provide sufficient evidence of using non-conventional fuel and relied on conventional fuel like coal and oil. The Gujarat Appellate Authority upheld this decision, emphasizing that the petitioner's products do not recover energy in the form of Biogas / Bio-CNG / Enriched Bio-gas / Power, as required for Waste to Energy Plants.

3. Validity of Orders by Gujarat Authorities:
The petitioner contested the orders of the Gujarat Advance Ruling Authority and the Gujarat Appellate Authority, arguing that their products exclusively use non-conventional fuel and should qualify for the lower GST rate. The petitioner cited the case of The Principal Commissioner of Income Tax-2 vs. Jay Chemical Industries Ltd to argue that steam should be considered as "power" and thus qualify as renewable energy. However, both authorities concluded that the petitioner's products do not meet the criteria for Waste to Energy Plants as defined in the relevant notifications and rules.

4. Entitlement for Refund of Differential Tax:
The petitioner sought a refund for the differential tax paid from 01.07.2017 onwards, which was contingent on the classification and eligibility for a lower GST rate. Since the petitioner's claim for a lower GST rate was rejected, the request for a refund was also implicitly denied.

5. Jurisdiction of the High Court under Article 226:
The respondents argued that the High Court's jurisdiction under Article 226 is limited and should not interfere with the factual findings of the Advance Ruling Authority and the Appellate Authority unless there is a flaw in the decision-making process. The Court agreed, finding no procedural errors or misapplication of the law in the authorities' decisions.

Conclusion:
The High Court dismissed the petition, upholding the decisions of the Gujarat Advance Ruling Authority and the Gujarat Appellate Authority for Advance Ruling. The petitioner's products were not eligible for the lower GST rate, and there was no basis for a refund of the differential tax. The Court found no grounds to interfere under its jurisdiction u/s Article 226 of the Constitution.