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TMI Blog2019 (11) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/B-29 dated 19.03.2019 = 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA. Brief Facts of the case A. M/s Arihant Enterprises is a partnership firm with GSTIN number 27AAUFA0033D1ZT and registered address at Flat No. 2, Ajit Building, Mahavir Park Society, Aundh, Pune Maharashtra-411007.They are inter-alia engaged in the business of reselling of Ice Cream from its Ice cream parlour situated in Aurangabad. They are supplied with the said goods from its sole manufacturer, M/s. Kamaths Ourtimes Icecreams Pvt Ltd ("The Franchisor"). They exclusively deal in the Naturals brand Ice cream manufactured by "the franchisor". M/s Arihant Enterprises had made an application GST-ARA, Application No. 126 dated 25.02.2019 for advance ruling before the Maharashtra Authority for Advance Ruling, GST Bhavan, 8th floor, Fl-Wing, Mazgaon Mumbai-400010 on the issue of whether the supply of Ice Cream made by it from its retail outlet would be treated as supply of "goods" or supply of "service" or a " composite supply". In this context, after due consideration of various submissions made before it, The Hon'ble Maharashtra Authority For Advance Ruling issued an order of Advance Ruling No. GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural Ice cream outlets, that one of the key persons from each premise was examined under Section 70 of the CGST Act, 2017 on the spot and his statement was recorded, that the investigations carried out so far appears to reveal that franchisees of M/s KOTI have evaded GST amounting more than Rs. 40.00 Crs on two aspects (a) by way of misclassifying their activity as supply of goods under HSN 2105 instead of its correct classification as supply of service under SAC 9963 (b) Suppression of supplies made and GST evaded thereon, that accordingly, investigations to detect cases of evasion of GST by franchisees of M/s KOTI located all over India, including M/s Arihant Enterprises, Aurangabad having its registered office in Pune were in progress covering one by one. 3. That in the meantime, based on an application dated 25.02.2019 for Advance Ruling, made by M/s Arihant Enterprises, the Hon'ble Maharashtra Authority For Advance Ruling issued an order of Advance Ruling No. GST-ARA-126/2018-19/B-29 dated 19.03.2019 = 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, wherein, it is inter-alia held that the supply of ice cream by the applicant from its retail outlets would be trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken decision to file an application before the ARA through a common consultant Mr Chirag Mehta but the relevant details of these investigations initiated by DGGI was not incorporated in their application before the ARA. The relevant para of the statement is reproduced herein under for ready reference. A para from Statement dated 10.05.2019 of Mr Virendra Mehta; "On being asked about the application dated 25.02.2019 made by M/s Arihant Enterprises before Advance Ruling Authority, I undertake to produce the same by 13.05.2019. In the light of franchisee agreement with KOTI and with due consideration to its terms and conditions, classification of the product and taxation thereon is decided by KOTI, the franchisor, by way of supplying the spectrum software for billing to your firm, which is mandatorily to be used by each franchisee, under these circumstances on being asked as to how M/s Arihant Enterprises had filed an application for advance ruling on its own, I state that with due oral discussion with directors of KOTI, it was taken decision to file an application before Advance Ruling Authority through a common legal consultant, Mr. Chirag Mehta for taking an advance ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, would have rejected application being non-maintainable. It therefore appears that the present Advance Ruling has been obtained by way of suppressing the material facts from the Advance Ruling Authority. 7. It is also submitted that some of the major competitors in the field such as ice cream brands under trade names "Gelato", "Baskin Robbins", "Cafe Chokolade" etc have rightly classified their activity of serving of Ice Cream at parlour ends as 'supply of services' under HSN Code 996331 of the GST tariff of India and they have paid [email protected]% and [email protected]% or IGST @5% as the case may be, w.e.f. 15.11.2017 by following the amending Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017. An explanation to Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 reads as under: "For the removal of doubt, it is hereby clarified that, supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by restaurant, eating joints including mess, canteen, whether for consumption on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cream effected thereby. Thus, franchisees including M/s Arihant Enterprises have charged and recovered money in the name of GST @ 18 % instead of 5% without ITC benefits from their customers. Thus, it is a case of recovery of tax in excess from the customers but not being deposited in to government account which is not legal and is liable to be recovered 9. In view of above legal position, it appears that the activity of ice cream parlours of the franchisees of M/s KOTI are covered under the explanation to the said notification which categorically classify the same as service under SAC 9963 and shall attract Central Tax @ 2.5% without any Input Tax Credit. Accordingly, the subject Order of Advance Ruling appears to be not just and proper as it can't sustain on merits. 10. As per Longman Dictionary -what is ice cream parlour: 'a restaurant that only sells ice cream'. As per Wikipedia- Ice cream parlours are restaurants that sell ice cream. 11. The ratio of the Advance Ruling No. KAR ADRG 21/2018 dated 21st August, 2018 = 2018 (9) TMI 1042 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA given in the case of M/s Coffee Day Global Limited, 23/2, 6th Floor, Vittal Mallya Road, Bangalore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term 'Outdoor Catering' was defined under Section 65(76)(a) of the erstwhile Finance Act, 1994 as "Outdoor caterer means a caterer engaged in providing service in connection with catering at place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such service". On considering the common parlance meaning of 'Outdoor Catering' and its above definition for Service Tax, we come to the conclusion that the supply of food, soft drinks and snacks sold in the Food Court or Snack Bar of the Applicant cannot by any stretch of imagination, be treated as a part of outdoor catering. In view of the facts and circumstances, we are of the view that the services provided by the Applicant in Snack Bar would be classifiable under SAC 9963 and chargeable to GST @ 5% (CGST @ 2.5% + SGST @ 2.5%), provided they fulfil the conditions laid down under Notification No. 46/2017-Central Tax (Rate) and corresponding notifications issued under MGST Act, 2017." 13. The subject case is not simply an act of resale of ice cream purchased from KOTI. The transactions between KOTI and M/s Arihant Enterprises are governed by the franchise agreement agreed between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between franchisor and applicant was actually not a real sale transaction but it is a transfer of Ice cream from factory of the franchisor to the retail ice cream parlours under the KOTI scheme of franchise agreement so as to sell/serve finally to unrelated buyers on behalf of KOTI. It is therefore pertinent to note that the various supply services offered by the franchisees to the franchisor and various fees payable by the franchisor to franchisee applicant thereon is adjusted along with the franchise fees not collected by the franchisor but hidden under the scheme of things, in the final sale price of Ice cream so fixed by the franchisor. The entire activities of franchisee applicant are therefore to be considered as supply of service. It therefore follows that the applicant's contention that its activity is merely a resale of Ice Cream / supply of goods and not a supply of service is incorrect and not acceptable and accordingly the subject order of ARA upholding the views of the applicant is liable to be rejected as it is not tenable. 16. The Appellant places reliance in this context on the observations made by the Honourable High Court of Delhi in the case of MC DONALDS INDIA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing before this Hon'ble Maharashtra Appellate Authority for Advance Ruling For Goods and Service Tax. Air India Building, Nariman Point, Mumbai-400 021 for justice and equity. (iv) that the facts and circumstances elucidated in the present appeal involve the question of "substantial justice", where gross delay of 25 days only, deserves to be condoned in the overall interest of justice. On the other hand, if condoning the delay being denied it would seriously undermine the cause of justice, resulting into miscarriage of justice for the appellant. 18. Thus, in view of the above grounds of appeal and the grounds mentioned in the application for the condonation of the delay in filing of the appeal under consideration, it was prayed by the Appellant:- (i) that the delay in filing of appeal may be condoned; (ii) that the appeal may be allowed and the order of advance ruling Order No. GST-ARA-126/2018-19/B-29 dated 19.03.2019 = 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA received by this office on 16.04.2019 may be set aside; (iii) Any other order as deemed fit. Respondent's submissions 19. The Respondent submitted that the present appeal filed by the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es mainly consist of sale of party packs or popularly Known as "Tubs". These are packed in plastic containers bearing the details of product including maximum retail price (MRP) of the product. The details of the product are printed on the packs in accordance with the provisions of the Legal Metrology Act, 2009. A pictorial representation of the pack is reproduced here under: india 25.2 Sale of ice-cream by way-of-scoops: Under this method, the ice-cream scoops are sold to the customers who wish to consume Ice-creams on a take-away basis. The franchisor supplies Ice-creams to the respondent in a wholesale pack to sell the same in scoops. These wholesale packs are emptied in steel containers at the outlet. Thereafter, the ice-creams are sold over the counter and supplied in scoops in paper cups, regular cones or waffle cones. Further, at times the customer prefers more than one flavour of ice cream in different combinations commonly known as "Double Scoop" or '(Triple Scoop". Accordingly, the ice creams are supplied in large cones or cups. In some cases, the ice cream is melted (semi-liquid form) and sold in paper cups to the customer based on their demand. In such cases, only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m by the respondent. 27. The respondent was not sure about the applicability of the rate of GST on the said sale in as much as the industry was divided on the said issue. In order to avoid any controversy and litigation in future, the respondent has filed an application before the Advance Ruling Authority, Mumbai vide Application No. 126 on 25.02.2019. 28. The said application was filed for seeking advance ruling in following questions:- a) Whether supply of ice-cream by the respondent from its retail outlets would be treated as supply of "goods" or supply of "service" or a "composite supply" and subject to GST accordingly. b) Whether the supply, not being a composite supply, would be treated as supply of service in terms of entry 6(b) of Schedule II, attached to the CGST Act, 2017 and leviable to CGST @ 2.5% in terms of Notification No.11/2017 as amended by Notification No.46/2017-Central Tax (Rate) (serial no.(i), entry no. 7) of the notification. c) In case the supply is held to be "composite supply", whether the taxability of the same should be treated as supply of service in terms of entry 6(b) of the Schedule II to the CGST act, 2017, or should be taxable on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent appeal. 32.2 The respondent submits that the above reasoning of the appellant-department is vague and absurd for the reasons stated infra. (i) First, Section 100 of the CGST Act, 2017 speaks about the filing of appeal to Appellate Authority formed under section 99 of the CGST, 2017.- "99. Appellate Authority for Advance Ruling - Subject to the provisions of this Chapter, for the purposes of this Act, the Appellate Authority for Advance Ruling constituted under the provisions of a State Goods and Services Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate Authority in respect of that State or Union territory. 100. Appeal to Appellate Authority- The concerned officer, the jurisdictional officer or an applicant aggrieved by any advance ruling pronounced under sub-section (4) of section 98, may appeal to the Appellate Authority. (1) Every appeal under this section shall be filed within 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: Provided that the Appellate Authority may, if it is satisfied that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld show that besides acting bona fide, it had taken all possible steps within its power and control and had approached the Court without any unnecessary delay. The test is whether or not a cause is sufficient to see whether it could have been avoided by the party by the exercise of due care and attention. (iv) Delay is just one of the ingredients which has to be considered by the Court. In addition to this, the Court must also take into account the conduct of the parties, bona fide reasons for condonation of delay and whether such delay could easily be avoided by the appellant acting with normal care and caution. The statutory provisions mandate that applications for condonation of delay and applications belatedly filed beyond the prescribed period of limitation for bringing the legal representatives on record should be rejected unless sufficient cause is shown for condonation of delay. It is the requirement of law that these applications cannot be allowed as a matter of right and even in a routine manner. (v) As regards the merits of the application in hand, except for a vague averment that the considerable amount of time has been taken to conclude or arrive at a decision that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red-tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, according to us, the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay. Accordingly, the appeals are liable to be dismissed on the ground of delay. (vii) Third, the Goods and Services Tax has been introduced with effect from01.07.2017. Now, we are standing in the year 2019 and still the department is learning the nuances of the newly rolled out GST la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he DGGI to the appellant. Copies of the said letters have not been provided to the respondent, if the same have been referred to in the grounds of appeal, copies of the same should have been enclosed, failure to do so, vitiates the proceedings. It is not known what are the contents of the said letters and why and how the DGGI is directing the department to file the present appeal. What interest has the DGGI got in the present appeal? Under which provision of law and under which authority, the DGGI is communicating with the appellant. Under which capacity, the DGGI (being an investigating body) is influencing the decision-making process. The present appeal is motivated and lacks bonafide. Hence, on this count alone, the present appeal is liable to be rejected. (iii) Apart from the above, it is pertinent to look into Section 104 of the act which reads as under:- 104. Advance ruling too be void in certain circumstances,- (1) Where the Authority or the Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of section 101 has been obtained by the applicant or the appellant by fraud or suppression of material facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal. Such an interpretation would be absurd and hence, needs to be avoided. (vi) The legislature is a perfect legislative body. It is presumed to know all the laws when it enacts any particular legislation. In Union of India VS.Hansoli Devi reported at (2002) 7 SCC 273 = 2002 (9) TMI 799 - SUPREME COURT, the Hon'ble Supreme Court has observed that the legislature never wastes it words or say anything in vain and a construction which attributes redundancy to legislation will not be accepted except for compelling reasons. (vii) In Sultana Begum Vs. Prem Chand Jain reported at (1997) SCC 373 = 1996 (12) TMI 388 - SUPREME COURT, at page 381, the Hon'ble Apex Court has held as under:- "........................ 15. On a conspectus of the case-low indicated above, the following principles are clearly discernible: (1) lt is the duty of the courts to avoid the head-on clash between two sections of the act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. (2) The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, the present appeal is not maintainable and deserves to be dismissed, in lamina. (x) There is yet another reason which supports the above submission of the respondent. The above provision section 104 would be applicable only in case where the applicant (assessee) is the appellant. The appellate authority would pass an order on the appeal of the appellant (assessee). Such an order can berecalled if the appellant (assessee) is guilty of fraud, suppression of material facts or misrepresentation of facts, It cannot be gainsaid that the revenue would be guilty of fraud, suppression of material facts or misrepresentation of facts. (xi) If the DGGI was so convincing, they could have convinced the Authority for Advance ruling to recall its order and hold that the same is void, by moving an appropriate application before it, in terms of section 104 of the act ibid. Having failed to do so, the present appeal is a back door entry. It should not be permitted to be entertained. Hence, the present appeal is liable to be dismissed at the threshold. 32.4 Without prejudice, the respondent submits that there is no proceedings pending against the respondent, and hence, proviso to section 98(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority for advance ruling, is without any basis. Such contention of the appellant-department is vague and absurd. It needs to be stated only to be rejected. (vi) Even otherwise, it is immaterial, in law as well as in the facts and circumstances of the present case, whether there is any proceeding pending in the name of the franchisor or other franchisees. As per law, the provisions of Chapter XVII would be applicable only qua "the applicant". The term "applicant" has been defined statutorily under section 95(c) of the Act as any person registered or desirous of obtaining registration under this Act. The ruling and other provisions would be applicable and enforceable only qua such an applicant. Hence, reference to investigation pending against the franchisor or other persons or the tax being paid by the competitors is wholly irrelevant to the issue at hand and clearly an attempt to mislead and misguide this Appellate authority. Hence, the appeal is liable to be rejected on this count alone. (vii) Apart from the above, the respondent submits that:- (a) First, there is no evidence produced on record that the franchisor intended to get an advance ruling in their favour. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of allowing the maker thereof to retract the said statement has been granted. The said statement has not been tested on oath. No cross examination of shri Virendra Nand Kumar has been granted. Hence, as such, no reliance can be placed on the said statement. (x) In Basudev Garg Vs. Commissioner of Customs - 2013 (294) ELT 353 (Del.) = 2013 (5) TMI 350 - DELHI HIGH COURT, the Division Bench of Delhi High Court has held that the statement against the assessee cannot be used without giving them opportunity of cross examination. A statement needs to be tested on oath before being led in as evidence. In absence of the same, such statement cannot be relied upon. (xi) To similar effect is judgment of the Hon'ble Punjab and Haryana High Court in the case of Jindal Drugs Private Limited v/s Union of India 2016 (340) ELT 67 (P&H) = 2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT. (xii) Without prejudice to the above, reliance placed on the above statement is wholly irrelevant and out of context. The said statement does not prove that the proceedings were pending against the "applicant" - respondent. There is no legal or statutory bar against making an application for advance ruling if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of services' under the HSN code 996331 of the GST tariff of India and they have paid CGST @2.5% and SGST @ 2.5% or the IGST @ 5%, as the case may be, w.e.f. 15.11.2017 by following amending Notification No. 46/2017-C.T. (Rate) dated 14.11.2017. (xviii) The respondent submits that the above grounds taken by the appellant-department are absurd and incongruous. What is being done by other suppliers is not a basis to decide the present appeal. The present appeal needs to be decided on the facts of the present case. It is not known as to what is the activity being undertaken by the so called "competitors" and the tax treatment being undertaken by them. There is no evidence of the same produced on record by the department. No notice has been issued to the said competitors. Hence, a bald statement cannot be accepted. Therefore, the present appeal is liable to be rejected on this count alone. (xix) Even assuming whilst denying, as contended by the appellant-department, there is no basis for the appellant to submit that the respondent should follow what their competitors are doing. If such be the case, then there is no need to constitute authorities like Advance Ruling Authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Chapter XVII to dispute the factual position. If that be the case, the appellant department should have stated so in the report itself. The entire report of the department is in agreement with the facts stated in the application and the submissions of the applicant (respondent herein). It is a complete summersault, now, in the present appeal. The department needs to be reminded that it is not a case of assessment proceedings. It appears that the appellant department has donned the cap of an assessing officer while drafting the grounds of appeal, which is, part from being bad in law, not permissible. An appeal can be urged on the questions decided by the authority and not to argue on facts. This case is a classic case of abuse of the process of law. Hence, the present appeal must be rejected on this count alone. 35. In any event, the respondent submits that the factual position stated in the above paragraph 33 is incorrect. The factual position, which has been narrated above in the statement of facts, is true and correct. The appellant has also accepted the same in its own appeal the "brief facts of the case". Hence, the above ground is self-contradictory. Therefore, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the transaction under consideration involves transfer of property in movable goods. The respondent submits that, in the instant case, the customer approaches the respondent to buy Ice-cream. The customer accordingly, places the order from the price list and the same is delivered to them. In case of retail pack, the box is supplied as it is. However, in case of scoop, the flavour of choice is sold as per the customer preference i.e. in cup or cone. In either of the cases, the ice-cream received by the respondent from the franchisor is supplied as it is to the customer. No processing is done thereon, no customization is done. The respondent sells the said final products to the customer at agreed rates, as mentioned on price list. No extra money is charged from the customers. These facts have been admitted by the appellant department. 41. The intention of the parties and the understanding of the parties is that the same is a sale. The customer intends and accordingly, agrees to purchase the abovementioned final products from the respondent. There is no contract for provision of any service customers of the respondent are free to consume the ice-creams inside and outside the outlet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or carry away uneaten food. Supporting consideration included the circumstance that the furniture and furnishing, linen, crockery and cutlery were provided, and there was also music, dancing and perhaps a floor show. 45. To similar effect is another decision of Apex court in the matter of State of Himachal Pradesh v. Associated Hotels of India [1972] 2 SCR 937 = 1972 (1) TMI 80 - SUPREME COURT. The ratio decidendi of the above judgment is that what is to be adjudged in each case is as to whether the dominant intention in a given transaction was of sale and purchase of eatables or drinks. Interpreting the above judgments Hon'ble high court of Andhra Pradesh in the matter of Durga Bhavan and Ors. [1981] 47 STC 104 (AP) = 1980 (9) TMI 260 - ANDHRA PRADESH HIGH COURT have summarized the ratio decidendi of the judgments and observed:- "13. To summarise the position at the end of the three decisions of the Supreme Court discussed earlier appears to be as follows:- 1. If there is no right to carry away the food there would be no sale in favour of the customer. 2. Even if there is a right to carry away if in essence the transaction is a transaction of service and not a transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in packing the foodstuffs, yet it may be so insignificant or incidental that the transaction would essentially be one of sale. Similarly, if food stuffs or drinks are supplied to customers outside the hotel or restaurant, then also the transactions may amount to sale. In case where the owner of the hotel or restaurant or the eating house charges separate amount by way of service charge for the service rendered by him besides the cost of the foodstuff supplied to the customer, then it would obviously appear that the transaction of sale of foodstuffs and service rendered by the hotelier or the owner of the restaurant have been separately charged. Moreover, it would also be a question of fact as to whether the customer has a right to take away the foodstuffs and in that case the assessing authority will have to decide as to whether the transaction would amount to sale or not. If the dominant object is the sale of eatables and drinks and rendering of services is merely incidental, then the transaction may amount to sale. But, if on the other hand, there is a transaction in which services is coupled with the supply of foodstuffs and supply of foodstuffs is part of, and incidental to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Act, 1948 and holds a registration certificate issued by the Municipal Corporation. The registration certificate describes the nature of business of the store as "Sale of Ice-creams". Copy of this License/ registration Certificate is enclosed here with. This fact is undisputed even in the present appeal. The appellant department cannot go beyond such statutory recognitions. Hence, the present appeal is liable to be rejected. The transaction is of transfer of title in goods and not of composite supply. Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 to the extent it treats even sale simpliciter of goods being food as service is beyond Para 6(b) of Schedule II of the CGST Act, 2017 53. Section 7(1A) of the CGST Act provides that the whether a supply is a supply of goods or supply of service has to be determined in accordance with Schedule II of the CGST Act. The said section is reproduced as under: "(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II." 54. Para 1(a) of the Schedule II states that any tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Where two or more words, which are susceptible of analogous meaning, are coupled together they are understood to be used in their cognate sense. They take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general. 58. Thus, a transaction of supply of foods would be covered within the ambit of Para 6(b) of Schedule II only if there is some element of service involved and if it is a composite supply. Further, the service element has to be seen at the time of making of supply. It is well understood that the nature of supply has to be determined at the time of supply; what happens prior to making of supply and what happens after making of supply is wholly irrelevant. 59. In the case of sale of tubs (retail packs) there is no element of service involved. The tubs are received from the manufacturer and supplied as such to the customer. Further, even in case of sale of ice cream in scoop or in melted form, the activity undertaken, if any, is prior to the supply of ice cream. The activity is only e component which goes into the making of the product, i.e., the ice cream in cup/scoop or in melted form - b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CST to be charged on the supply of service. At the outset the respondent reiterates that since the activity undertaken by the respondent is that of supply of goods, the said notification is not applicable in the instant case. Even otherwise, the supply must be provided by a restaurant, eating joint including mess, canteen. The terms "Restaurant, "Eating Joints", "Mess" or "Canteen" have not been defined under the act. Further Section 2(120) provides that words and expressions used and not defined in this Act but defined in the Integrated Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act shall have the same meaning as assigned to them in those Acts. However, the said terms have not been defined under the above acts. Hence, one will have to look at the ordinary meaning of the said terms as understood in common parlance. 64. Oxford Dictionary defines the term "Restaurant" as - a place where people pay to sit and eat meals that are cooked and served on the premises. University of Cambridge defines the same - as a place where meals are prepared and served to customers. Similarly, the term Canteen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry (i.e., Entry No. 16) is "cosmetics, perfumery and toilet goods The context in which the word "perfumery" occurs shows that what is meant by all the three general items "cosmetics, perfumery and toilet goods" are articles which are used for personal hygiene or pleasure. The items which are excepted from this entry are "toothpaste, tooth powder, soap and kum-kum." This exception also points to the same conclusion, viz., that only those articles of luxury, which are used for personal hygiene and pleasure were intended to be included in this entry. So the word "perfumery" in this context would not include dhoop and aggarbatti, which are never used for personal hygiene or pleasure, but are primarily used for religious ceremonies." 66. Accordingly, the term "Restaurant, Eating Joints", "Mess" or "Canteen" has to be interpreted and understood on the common analogous sense i.e. a place where the consumer is served food at the tables to be consumed therein. However, in the instant case, the outlets of the respondent do not serve the ice-creams to their customers on the table. Rather the same has to be collected by the customer themselves from the counter. Further, on the cost of re-it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred over one which is not specific or is general in nature. In other words, between the two competing entries the one most nearer to the description should be preferred. Where the class of goods manufactured by an assessee falls say in more than one heading one of which may be specific; other more specific, third most specific and fourth general. The rule requires the authorities to classify the goods in the heading which satisfies most specific description." ............. emphasis supplied 71. In the present case, SI. No. 22 of Notification No. 01/2017-CT (Rate) dated28.06.2017 which specifies the rate of tax for supply of ice cream is more specific than the supply of food article under SI. No. 7 of Notification No. 1112017-CT (Rate) dated 28.06.2017. Hence, the present transaction will be classifiable as a supply of ice cream and the appeal filed by the appellant -department being devoid of any merit is liable to be dismissed. Under the erstwhile regime.in the case of respondent, the Asst. Commissioner of GST has held that the respondent is not a restaurant. The said order has been accepted by the department and not challenged. The department now cannot take contrary sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence led in by the appellant department in support of the said argument. 78. Third, in any event, the respondent submits that the franchise agreement is at arm's length. The Income Tax department has accepted the sale price of the goods by the franchisor to the franchisee. 79. Fourth, if the argument of the Department were to be accepted as correct, even then there is no element of service. The relationship between the franchisor and the franchisee is not the subject matter of the appeal. The supply made by the respondent to the end customer is the subject matter at hand. That supply is a supply of ice-cream only, and hence supply of goods. Such contentions are raised only with intent to mislead this appellate authority. 80. At para J & K of the present appeal, the appellant department relied upon the decision in the advance ruling no. KAR/ADRG/21/2018 dated 21.08.2018 = 2018 (9) TMI 1042 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA in the case of M/s. Coffee Day Global Limited and Authority of Advance Ruling under GST Madhya Pradesh in the case of Jabalpur Entertainment Complexes (P) Ltd. = 2018 (9) TMI 1644 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH. The reliance placed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter alia, contended that the Respondent was not eligible to file the Advance Ruling application as the proceedings against its franchisor i.e. M/s. KOTI and some of its franchisees had already been initiated on the same issue as that of the questions raised in the advance ruling application, i.e. the 'classification of the activities' carried out by the franchisees. They also, inter alia, interpreted the term 'Concerned Officer', which has been mentioned separately and deliberately besides the term 'Jurisdictional Officer' in the provisions related to the advance ruling under the CGST Act, 2017, arguing that since the term 'Concerned Officer' is not defied anywhere in the GST Act, the same, if interpreted, should be construed as the officer separate from the Jurisdictional officer. Thus, they presented themselves as the concerned officer, as they were dealing with the investigation against the franchisor of the Respondent and other franchisees of the said franchisor, which eventually also include the Respondent in the present appeal. Thus, DGGI prayed for the grant of the opportunity to present their version in the instant case for the sake of the justice and to safeguard the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Revenue which has been invested with powers to detect and investigate eases of GST evasion throughout the territory of India under the Central GST Act, 2017, irrespective of the fact that whether the tax payer is under the control and administration of Centre or State authorities vide Notification No. 14/2017 Central Tax dated 01.07.2017. 87. An intelligence was received by DGGI on 07.01.2019 that GST amounting Rs. 40.00 Cr approx, is being evaded by the franchisees of Naturals ice cream numbering around 133 across India by way of deliberately misclassification of their activity of supply of ice cream from Naturals outlets to ultimate customers under HSN 2105, as supply of goods and whereby charged and recovered GST @18% by availing ITC and whereas, their activity should have been classified as supply of service under SAC 996331 attracting GST @5% without ITC benefits vide Notification No. 11/2017Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 46/2017 Central Tax (Rate) dated 14.11.2017. Acting on the basis of this intelligence, initially the DGGI officers conducted a simultaneous search operation at Mumbai and Pune on 05.02.2019 and thereby covered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Mumbai on the issue of whether the supply of Ice Cream made by it from its retail outlet would be treated as supply of "goods" or supply of "service" or a "composite supply". In this context-after due consideration of various submissions made before it, The Hon'ble Maharashtra Authority For Ruling issued an order of Advance Ruling bearing GST-ARA-126 2018-19B-29 dated 19.03.2019, wherein, it is inter-alia held that the supply of ice cream by the applicant from its retail outlets would be treated as supply of - goods". Aggrieved by the said Order of the AAR, the present Appeal was filed seeking justice in the matter. 93. that DGGI, Pune Zonal Unit was not aware of the Application made by the present Respondent before the AAR as it was not made as party either in the capacity of jurisdictional officer nor in the capacity of concerned officer. The respondent unit was under administration control of State Tax department and accordingly, the State Tax officer who has been treated in the application as the jurisdictional officer / concerned officer, made submission before the AAR. The investigations already initiated by DGGI against KOTI and all of its franchisees much before the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is evident from the terms and conditions of the franchise agreement that in the entire scheme of KOTI, the franchisor had the upper hand and final say in every aspects of business and the applicant had no reason to approach the Authority for Advance Ruling on the issue of classification of supply especially when there was no any dispute had cropped up even from the concerned State Tax Officer in this regard. It appears that KOTI had its own role behind the application made before the ARA, as investigations were already initiated against all the 12 number of franchisee outlets located in Mumbai, Delhi, Kolkata and Gurugram owned and controlled by the Directors of KOTI and hence they were interested in getting an advance ruling in their favour so as to attempt an escape from the clutches of the investigations of the DGGI. 98. That the application filed by the present respondent is not maintainable as per the provisions of Section 98(2) of the CGST Act, as proceedings were already initiated on 05.02.2019 against KOTI and all of its franchisees i.e. much before the filing of their application before the Advance ruling Authority on 25.02.2019. Most respectfully submitted herewith t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared void for which the Authorities have powers. The respondents are trying to force certain word of his own into the Act to interpret the same for its own benefit. Due to the special nature of circumstances of the present case it became incumbent on the undersigned to point out the facts of the case and pray for intervention. Without prejudice to above, the present Appeal has its own merits, which are detailed herein under: 100. that the composite supply is defined in clause (30) of Section 2 of the CGST Act, 2017, which is reproduced herein under:- (30) "composite supply" means a supply made a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal Illustration.- Where goods are packed and transported with insurance, the supply of goods. packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; 101. When investigating officers examined the premises of franchisees and recorded in statements as to obligations of Franchi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention of the legislature to widen the scope to include many other similar things. This view will also get support from the amending Notification No. 13/2018-C.T. (Rate) dated 26.07.2013, which further amends the original Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The amended notification inserts Explanation I to serial no.7 column 3 item (i) reads as under:- "Explanation I. - This item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional. 102. Choosing these set of words the legislature has created an entirely new position of law. Due to the merger of earlier indirect taxation laws into GST Act by way of Constitutional Amendments the Legislature got itself equipped with wider set of powers. In a clear departure from the earlier definition of "Restaurant Service" contained in Section 65(105)(zzzzv) of the Finance Act, 1994, as well as Declared Service as per Section 66 E, Finance Act, 1994 (as and when amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Employees' State Insurance Corporation & Ors. - (1997) 9 SCC 71 = 1996 (11) TMI 474 - SUPREME COURT, T.N. Kalyana Mandapam Assn. Vs. Union of India & Ors. -(2004) 5 SCC 632 = 2004 (167) E.L.T. 3 (SC.) = 2006 (3) STR.260 (S.C.) = 2004 (4) TMI 1 - SUPREME COURT, It is also well settled that in order to determine whether the word "includes " has that enlarging effect, regard must be had to the context in which the said word appears. (See: The South Gujarat Roofing Tiles Manufacturers Association Anr. Vs. The State of Gujarat & Anr. - (1976) 4 SCC 601 = 1976 (10) TMI 147 - SUPREME COURT, R.D. Goyal & Anr v. Reliance Industries Ltd. (2003) 1 SCC 81 = 2002 (11) TMI 361 - SUPREME COURT, and Philips Medical Systems (Cleveland) Inc. Vs. Indian MRI Diagnostic and Research Limited & Anr. - (2008) 10 SCC 227 = 2008 (9) TMI 555 - SUPREME COURT. 106. Thus, as already stated above, having regard to the language of Rule 2(g) of the 2002 Rules, and the analysis of the afore noted decisions, it appears that by employing the phrase "and includes ", legislature did not intend to impart a restricted meaning to the definition of "inputs " and therefore, the interpretation of the said term in Maruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -per kg which KOTI has included in Taxable value * Thus, Taxable value at factory end - Rs. 344.4 per Kg i.e. (360-21.6+6=344.4/-) * At franchisee/ ice cream parlour's end, sale value as fixed by the franchisor- Rs. 65/- per scoop of 80 gm inclusive of GST @18% i.e. its taxable value is Rs. 55.08/- (65/118*100) * 12 scoops per kg of 80 gm each is taken (as per one of the conditions of franchise agreement) then taxable value per kg comes to 660.88/- i.e. (12*55.08=660.88/-) * Therefore, gross margin offered to franchisees per kg is 660.88(-) 344.4/=317 or 92% of cost price at KOTI when the ice creams are scooped. * On the other hand, when ice cream is sold as Family pack}, then the profit margin is 27% only. 109. that analysis GSTR-3B filed from time to time and in respect of the present respondent for the period July-17 to Feb-19 and as furnished by him during the investigation, reveals as under:- Table I (In Rs.) Sr. No. Period Taxable Turnover of Ice cream sold by the respondent as per GSTR -3B Tax paid @18% with ITC Sale Value including Taxes Through ITC Through Cash 1 2 3 4 5 6(3+4+5) 1 July 17 to March 18 15544167 2219822 578128 18342117 2 Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s GST rate of 5% without ITC. 114. that the Naturals ice cream parlours including that of the present respondent keeps menu card which declares that they serve ice cream in fresh waffle cones, or in cups of different flavours of single scoop, double scoop etc. Further it is also evident from the same that they serve ice cream shakes of mango, sitaphal, chikoo chocolate, kesarpista etc. Kind attention is invited in this context that KOTI supplies ice cream in two packages i.e. 500 gm. Tub for retail sale and 1500 gms. bulk packs for serving scooped ice cream. Therefore, preparation of ice cream shakes from the melted ice cream tubs with addition of water/ ice using food processors/ mixers and then serving the same to customers cannot by any stretch of imagination be termed merely as resale of ice creams comparable to resale of pack biscuits or oil from the grocery shop. This argument adopted by the respondents is not only incorrect but amounts to telling lies. Using this argument itself the respondents got a favourable judgement from the Advance Ruling authority. Thus, it is clear that the respondents have gotten an order form the Advance Ruling Authority by suppression and misrepr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant against the Order No. GST-ARA-126/2018-19/B-29 dated 19.03.2019 = 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA of the Authority for Advance Ruling holding that the supply of ice cream by the Respondent-applicant from its retail outlets be treated as supply of "goods". 120. the Dy. Director, DGGI, PZU ('DGGI Officer') has filed an affidavit dated 6.08.2019 before this Hon'ble Appellate Authority. 121. The Respondent submits that the affidavit filed by DGGI Officer and present appeal is incorrect on facts as well as on law and thus liable to be dismissed on the following grounds which are urged without prejudice to one another: No proceeding is pending against the Respondent: 122. The provision of Section 98(2) of the CGST Act, 2017 states that the Authority for Advance Ruling shall call for records from the applicant and the concerned officer and after hearing them either admit or reject the application. The proviso to Section 98(2) states that the Authority shall not admit the application where the question raised in the application is already pending in any proceeding in the case of an 'applicant'. The relevant extract of the section is as under:- "98. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the concerned officer, jurisdictional officer or the applicant aggrieved by the order of the Authority for Advance Ruling may appeal to the Appellate Authority. The relevant extract of the said section is as under: 100. (1) The concerned officer, jurisdictional officer or the applicant aggrieved by any advance ruling pronounced under sub-section (4) of section 98, may appeal to the Appellate Authority. ....emphasis supplied 128. The term 'concerned officer' or 'jurisdictional officer' have not been defined under the CGST Act. It is submitted that the advance ruling may be obtained by a registered person or an unregistered person. Thus, in case of registered person, the jurisdictional officer will be the person under whose jurisdiction the applicant is registered whereas in case of an unregistered person, the relevant officer would be the concerned officer, i.e., the officer who would be the jurisdictional officer, had the applicant been registered under the provisions of the Act. 129. In the present case, the applicant-respondent is registered under the Act. The Assistant Commissioner, State Tax, Pune, who is the jurisdictional officer of the applicant-respondent, has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the face of the record, if such error is noticed by the Authority or the Appellate Authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer, the applicant or the appellant within a period of SIX months from the date of the order: Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made unless the applicant or the appellant has been given an opportunity of being heard." ......... emphasis supplied 135. Section 104 of the CGST Act provides the where the Authority or the Appellate Authority finds that the ruling pronounced by it has been obtained by fraud, suppression of material facts or misrepresentation of facts, then such Authority or the Appellate Authority has passed the order may declare it to be void-ab-initio. The relevant abstract the section is as under:- "104. Advance ruling to be void in certain circumstances,- (1) Where the Authority or the Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under sub section(1) of section 101 has been obtained by the applicant or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) of the Schedule II states that any transfer of title in goods is a supply of goods. Para 6(b) of the Schedule II states that the composite supply namely supply, by way of or as a part of or in any other manner whatsoever, of goods, being food shall he treated as a supply of service. The relevant paras of Schedule II are extracted as under:- SCHEDULE II ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES "1. Transfer (a) any transfer of title in goods is a supply of goods; ........................... 6. Composite supply The following composite supplies shall be treated as supply of services, namely:- ....................................... (b) supply, by way of or as a part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment of other valuable consideration." 141. For a supply of food article to be covered within the ambit of para 6(b), it should first be a composite supply. Composite supply is a supply comprising of two or more taxable supplies of goods or service. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... els would constitute a sale, the Supreme Court observed that when meals were served to casual visitors in the restaurant the service must be regarded as providing for the satisfaction of a human need and could not be regarded as constituting a sale of food when all that the visitors were entitled to do was to eat the food served to them and were not entitled to remove or carry away uneaten food. Supporting consideration included the circumstance that the furniture and furnishing, linen, crockery and cutlery were provided, and there was also music, dancing and perhaps a floor show. 146. While dealing with the review petition in the matter of Northern India Caterers Vs. Lt. Governor of Delhi AIR 1980 SC 674 = 1978 (12) TMI 157 - SUPREME COURT, the apex court rejected the review petition, and clarified their earlier decision in the aforesaid case by making the following observations:- "Where food is supplied in an eating-house or restaurant, and it is established upon the facts that the substance of the transaction, evidenced by its dominant object, is a sale of food and the rendering of services is merely incidental, the transaction would undoubtedly be eligible to sales tax. In e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - but it is only a component and nothing more. The transaction between the respondent and the customer is only of transfer of title in the ice cream in cup/scoop or in melted form. The activity/service involved if any is only prior to the making of supply and not at the time of making of supply. In this regard, reliance is placed on the decision of Hon'ble Supreme Court in the case of Hindustan Shipyard Ltd v. State of Andhra Pradesh 2000 6 SCC 579 = 2000 (7) TMI 864 - SUPREME COURT. 150. Notification no. 11/2017-CT (Rate) dated 28.06.2017, as amended from time to time, provides that Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied. 151. The above notification prescribes rate of supply of service provided by restaurant, eating house, etc. The act or the notification does not define the such ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Input Tax Credit to the Estimated Loss of Revenue is clearly erroneous and perverse as once tax has been paid at 18%, the applicant-respondent is validly entitled to input tax credit. The department cannot approbate and reprobate by collecting the tax at 18% and also denying input tax credit. 157. Thus, in the tax position adopted by the applicant-respondent, there is no implication even from the angle of revenue. Needless to say, this aspect has no bearing on the interpretation of the provisions of the CGST Act. 158. In view of the foregoing, the Respondent prayed that the present appeal be dismissed and uphold the impugned Order GST-ARA-126/2018-19/B-29 dated 19.03.2019 = 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA passed by the Authority for Advance Ruling, Mumbai. Personal Hearing held on 22.08.2019 159. The second Personal Hearing in the case was held on 22.08.2019, pursuant to the filing of the affidavit by the DGGI Officer as the concerned officer in the present case. In this hearing, Shri Prasad D. Gorase, Dy. Director, DGGI, PZU appeared alongside the Appellant, being represented by Shri Suhas Kaware, Asst. Commissioner, State Tax, who reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the applicant made on 25.2.2019 before the AAR and the investigations involved the very same issue of classification of activities of franchisees. Statement u/s 70 of the CGST Act was recorded of the key persons and the investigations appear to reveal that GST of more than Rs. 40 crores has been evaded by 1) misclassification of the activity as supply of goods under HSN 2105 instead of correct classification as supply of service under SAC 9963 2) Suppression of supplies made and GST evaded thereon. 3) In the meantime, based on the application dt 25.2.2019 for Advance Ruling made by M/s Arihant Enterprises, the AAR issued an order dt GST-ARA-126/2018/B-29 dt 19.3.2019 = 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA holding that the supply of ice cream from its retail outlets would be treated as supply of goods. The DGGI not being a party to the proceedings, were not aware of the application and had no knowledge of the proceedings and the order of advance ruling was not endorsed to it. 4) Statement u/s 70 of CGST Act was recorded as Mr.Virendra kumar Nandakumar Mutha (Partner, Arihant Enterprises) on 10.05.2019 and in the statement he admitted that he was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made thereunder shall apply to the applicant or the appellant as if such advance ruling had never been made : Provided that no order shall be passed under this sub-section unless an opportunity of being heard has been given to the applicant or the appellant. Explanation: The period beginning with the date of such advance ruling and ending with the date of order under this sub-section shall be excluded while computing the period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74. 163. Sec. 98(2) provides that the application shall not be admitted where the question raised is already pending under any of the provisions of this act. The term 'any of the provisions of this act' includes investigations proceeding under section 67. It is clear from the record submitted by the DGGI that proceedings was pending against KOTI (Kamat Ourtimes Ice-cream Ltd), and the issue taken up in the proceedings related to the classification of the activities 'ice-cream sold from the natural outlets' - whether the supplier of goods would be charged at the rate of 18 % under HSN 2105 by availing ITC or whether the activity should be classified as supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of Mr Narendra Mutha (partner of Arihant Enterprises) given on 10.5.2019 which brings out the above is reproduced below"- ." On being asked about the application dated 25.2.2019 made by Arihant Enterprises before Advance Ruling Authority, I undertake to produce the same by 13.05.2019. In the light of franchisee agreement with KOTI and with due consideration to its terms and conditions, classification of the product and taxation thereon is decided by KOTI, the franchisor , by way of supplying the spectrum software for billing to your firm , which is mandatorily to be used by each franchisee, under these circumstances on being asked as to how Arihant Enterprises has filed an application for advance ruling authority on its own, I state that with due oral discussion with directors of KOTI, it was taken decision to file an application before the Advance Ruling Authority through a common legal consultant, Mr Chirag Mehta for taking an advance ruling as to whether serving of ice cream at parlour end is a supply of service classifiable under Sac 9963 for resale of goods (ice cream) under HSN 2105, since this issue of classification was already taken up by DGGSTI , Pune Zonal Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant-respondent that investigations were pending on the same issue against the franchisee and the applicant-respondent was also aware of the proceedings then the jurisdictional officer would have surely brought it to the notice of the ARA. Therefore, the Jurisdictional Officer later on has a valid reason to be aggrieved by the order of the ARA and therefore there is no incongruity in him in filing an appeal before the Appellate Authority. There is also no reason to assume that he is compelled to file an appeal by the DGGI. 168. The applicant-respondent has also argued that on the date of filing of the Application i.e. 25.02.2019, investigation proceedings initiated by DGGI were not pending against the applicant-respondent but were against KOTI who is the franchisee and therefore it cannot be said that the proviso to section 98 comes in the picture. We do not agree with the said contention of the applicant-respondent. Though technically proceedings were not pending against the applicant-respondent on the date of filing of Advance Ruling Application, it is clear and apparent from the deposition of Mr. Narendra Mutha Partner of M/s. Arihant Enterprises that it was decided b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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