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TMI Blog2019 (7) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further, henceforth for the purposes of this Advance Ruling, a reference to 'GST ACT' would mean CGST Act / MGST ACT. 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE QUESTION AS PROVIDED IN ANNEXURE -1 1. Brief background: 1.1 Bauli India Bakes & Sweets Private Limited (hereinafter referred to as "Bauli" or "the Applicant") is a company incorporated under the provisions of the Companies Act, 1956 and having its place of business at Baramati. 1.2 The Applicant was initially engaged in the business of trading in bakery products. In 2016, Bauli started setting up a factory for the manufacture of such goods, Accordingly, Bauli had obtained its Central Excise Registration as a "Manufacturer" on 27 December 2016 and was also filing its Central Excise Returns on a periodical basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempt goods 1.1.1 In the present case, at the time when the capital goods were received in the factory the final products for which they were intended to be used were liable to excise duty at NIL rate. Accordingly, whether or not credit should be made available in such a case needs to be determined in terms of the provisions of the CCR. 1.1.2 Rule 6(4) of CCR deals with the provisions relating to availment of credit in case of capital goods which are used in the manufacture of exempt goods or for provisions of exempt services. 1.1.3 Prior to 01 April 2016, Rule 6(4) of the CCR read as under: 'No CENVAT credit shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt from the whole of duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year' [Copy of Rule 6(4) prior to amendment is attached herewith and marked as Exhibit 'A') 1.1.4 The aforesaid rule provides that if the capital goods are used exclusively for production of exempted goods then CENVAT credit on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a period of two years from the date of commencement of the commercial production or provision of services, as the case may be, other than the final products or output services which are exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made or services provided in a financial year....' 1.1.9 It can be observed from the aforesaid rule that credit of such capital goods will not be available which are exclusively used for manufacture of exempt goods for a period of two years or more. The definition of exempt goods as defined in Rule 2(d) of the CCR includes goods which are chargeable to NIL rate of duty. The credit in such cases would be available only if the capital goods are not used for manufacture of exempted goods for more than two years from the date of commencement of production. However, if the capital goods are used for manufacture of dutiable or taxable goods within the period of 2 years, it would be eligible for full credit in terms of the above Rule 6(4) contained in CCR. 1.1.10 In the current case, the final goods in question have become taxable under GST at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revive anything not in force or existing at the time of such amendment or repeal; or (b) affect the previous operation of the amended Act or repealed Acts and orders or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Acts or orders under such repealed or amended Acts:....... 2.2 Section 174 of the CGST Act, 2017 clearly mentions that any 'right', 'obligation' or "liability' which was acquired, accrued or incurred under the repealed acts will not be affected by repealing of erstwhile Central Excise Regulations. Similarly, section 6 of the General Clauses Act, 1897, which deals with 'Effect of Repeal', reads as under: "6. Effect of repeal. Where this Act, or any (Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a). (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de substantial benefits. It is submitted that when it comes to substantive provisions, the new law should be in conformity with the old law and the same should not be dented under the transition provisions. [Copy of the above case-law is attached herewith and marked as Exhibit 'G'] Attention is also invited to the case of Gammon India Limited wherein the Apex Court laid down that if a later enactment supersedes an earlier enactment or puts an end to an earlier law, presumption as to the continuance of the rights accrued and liabilities incurred under the superseded enactment remains, unless there were sufficient indications, express or implied, in the later enactment so as to obliterate the earlier law. It was held that whenever there was repeal and simultaneous re-enactment, it has to be considered as reaffirmation of the old law and provisions of the repealed Act would continue in force uninterrupted unless the re-enacted enactment reveals contrary intention to the provisions of the repealed Act. [Copy of the above case-law is attached herewith and marked as Exhibit 'H'] 2.8 Therefore, in view of the above it is submitted that in terms of Section 174 contained in the CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is eligible to avail the on 01 July 2017 in terms of Rule 6(4) of the CCR read with section 174(2) and ion 18(1) (d) of the CGST Act since its final products became liable to GST in the regime. 4.2 Further, under GST regulations, such capital goods would be eligible for input tax credit as they would be used in the course of or for the furtherance of the business of the Applicant and would have been capitalized in its books of accounts. It is note-worthy that capital goods in the present case are in the nature of plant and machinery and as such are not covered in any of the negative items specified in the GST regulations which are not eligible for input tax credit. Therefore, in our view the capital goods in the present case are admissible for input tax credit under GST regulations as well. 5. CONCLUSION Based on the above submissions, the Applicant submits that it should be allowed to avail CENVAT credit of capital goods procured prior to the GST Regime as opening CGST credit in terms of Section 174(2) and section of the CGST Act. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- M/s. Bahuli India Bakes & Sweet Pvt Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods prior to 01 July 2017. As per the erstwhile Central Excise Tariff Act, 1975, nil duty was attracted on the manufactured product up to 30.6.2017. With the advent of GST, the final products manufactured by the Applicant are taxable under GST from 1 July 2017. Now applicant wishes to understand whether the CENVATABLE duties namely Central Excise Duty, CVD or SACD paid on such capital goods prior to the GST Regime could be availed as input tax credit under the CGST Act 2017 for discharging output liability. The questions posed by the applicant before us are reproduced as follows. 1) Whether the input tax credit availed by the applicant in respect of capital goods received prior to 01 July 201 7 is admissible to the applicant? 2) Whether while determining the liability to pay tax on the outward supplies made by the applicant, the applicant can adjust the input tax credit in respect of the capital goods procured by it prior to 01 July 2017? We find that the issue is limited and related to the availment of input tax credit (ITC) paid on the capital goods of plant and machinery pre GST period which in turn is used in the manufacturing activity of the finished products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act; (d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or (e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy; The above definitions help us to understand that the input tax sought in the present application is not in respect of input tax credit of tax paid or deemed to have been paid under the GST Act, We are of the clear view from the collective readings of provisions viz. - Clause (63) and (62) of Section 2 of the CGST Act that, the question enumerated at (d) of Section 97(2), supra does not deal with the admissibility of the credit of taxes paid other than the taxes mentioned in the Clause (62) of Section 2 of the CGST Act, 2017, which has been cited herein above. In other words. Section 97(2), which encompasses the questions, for the ruling by the AAR does not deal with the input tax credit of the service tax or VAT paid under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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