9911796707
TMI Blog2021 (7) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... forward under any existing law or goods which were held in stock on the appointed date. The amount of input tax credit, even if it was lying unutilized as on 01.07.2017 cannot be transitioned to a new registration obtained after implementation of the respective Goods and Service Tax enactments to its Sri City Unit in Andhra Pradesh in the light of Section 25 (5) of the respective Goods and Service Tax Enactments - petitioner s case also does not fall within the purview of Section 54 of the Tamil Nadu Goods and Service Tax Act, 2017 read with Chapter X of the Tamil Nadu Goods and Service Tax Rules, 2017. Refund of unutilized credit, it is permissible under Section 54(3) of the TNGST Act, 2017, only if such credit is lying unutilized at the end of the tax period. The prayer of the petitioner for either transfer or refund of such input tax which was credit lying utilized under TNVAT Act, 2006 does not arise - It is quite possible that the petitioner while removing the capital goods, work in progress and inputs had not discharged its liability under Rule 3(5) of the CENVAT Credit Rules, 2004. It would require for detailed examination by the concerned jurisdictional officer. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 9,09,855/- represented the input tax credit availed on various input services utilized by the petitioner for export of the finished goods under bond under Rule 19 of the Central Excise Rules, 2002. 4. According to the petitioner, the 1st and the 2nd respondents had orally indicated to the petitioner that the petitioner should first close all the pending disputes and then apply for transfer of credit under Rule 10 of the CENVAT Credit Rules, 2004. 5. The 1st respondent issued Show Cause Notice No.01/2017 dated 07.09.2017 to the petitioner. The aforesaid notice proposed levy of penalty under Rule 25 of the Central Excise Rules, 2002 for clearing goods without payment of duty. The aforesaid proceedings culminated in Order in Original.No.3/2017 of the 1st respondent. The 1st respondent did not confirm the duty proposed in the Show Cause Notice as the petitioner had exported goods out country. At the same time the 1st respondent held that the petitioner was liable to penalty under Rule 25 of the Central Excise Rules, 2002 for violating Rule 12 19 of the said Rules and Notification No.42/2001-CE(NT) dated 26.06.2001. The petitioner accepted the same and paid a sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered should be that of a local unit located in Andhra Pradesh therefore transfer of credit was not permissible. 11. It is further submitted that the transfer of input tax credit lying utilized in its unit in Chennai to another unit in Sri City, Andhra Pradesh cannot be curtailed as in the case of amalgamations contemplated in Section 18(3) of the Central GST Act, 2017 and Rule 41 CGST Rules 2017. 12. It is further submitted that both the provisions do not contemplate any restriction for transfer of credit from one unit to another unit of the same assessee and therefore disabling the petitioner from transferring the same by disabling the key in the GST registration number in form GST ITC-02 is arbitrary, unreasonable and in violation of the provisions of the CGST Act, 2017. 13. Learned counsel for the petitioner relied on the following case laws:- i) Flex Art Foil Pvt.Ltd vs. Commissioner of C.Ex.Deman, 2011(22) S.T.R.591 (Tri.Ahmd.) ii) Slovak India Trading Co.Pvt.Ltd., vs. Commissioner of C.Ex.,Bangalore, 2006(205) E.L.T.956 (Tri.Bang.) iii) Union of India vs. Slovak India Trading CO.PVT.LTD, 2006(201) E.L.T.559 (Kar.) iv) Computer Gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(9) of the TNVAT Act 2016 there is no question of credit surviving. 16. As far as transfer of credit under Central GST is concerned, learned Senior standing counsel Mr.A.P.Srinivas for Respondent Nos.1,2 5 6 submitted that refund of unutilized input tax credit would have survived only if refund was made under Rules of the Central Excise Rule, 2002. 17. As far as transfer of input tax credit under Rule 10 of the erstwhile Central Credit Rules, 2004 is concerned it is submitted that it would arise only in the event of shifting of factory to another site or transfer of factory on account of change of ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with transfer of liabilities of such factory. It is submitted that the petitioner has not filed application under Rule 10 of the Cenvat Credit Rules, 2004 before shifting. It is submitted that the transfer of input tax credit is not automatic as under Rule 10(3) of the Cenvat Credit Rule 2004. The Assistant Commissioner of Deputy Commissioner has to satisfy that the stock of input or work in progress or capital goods were also transferred along with the factory or with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stinct persons. 23. It is submitted that since under Section 25 of the respective GST enactments, each unit in different State is a distinct person, the concept of tax free Branch transfer, depot transfer or consignment sale are not applicable. If the goods are transferred from one branch (from one State) to another branch in a different State, then the assessee has to pay integrated GST. The Credit alone cannot be transferred between units or depots or branches situated in different states. To claim credit in the transferee state, the goods must be supplied with GST invoice from the transferor state. Without payment of GST, the Credit available in one State cannot be transferred to another State even between the branches or Depots or Units or Agents. 24. It is further submitted that the capital goods have been allegedly transferred in the Central Excise regime in June 2016. However, the petitioner failed to make a claim and therefore he cannot maintain the prayer to transfer the Credit under the GST Act. It is submitted that the petitioner ought to have pursued its right under Rule 10 of the CENVAT Credit Rules, 2004, for transfer of CENVAT Credit in accordance with Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the existing law [within such time and] in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit in the following circumstances, namely:- (i) where the said amount of credit is not admissible as input tax credit under this Act; or (ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or (iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government. (2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day [within such time and] in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as exempted goods or tax free goods, by whatever name called, under the existing law but which are liable to tax under this Act, shall be entitiled to take, in his electronic credit ledger,- (a) the amount of credit of the value added tax and entry tax, if any, carried forward in a return furnished under the existing law by him in accordance with the provisions of subsection (1) and (b) the amount of credit of the value added tax and entry tax, if any, in respect of inputs held in stock and inputs contained in semi-finished goods held in stock on the appointed day, relating to such exempted goods or tax free goods, by whatever name called, in accordance with the provisions of subsection (3). (5) A registered person shall be entitled to take, in his electronic credit ledger, credit of value added tax and entry tax, if any, in respect of inputs received on or after appointed day but the tax in respect of which has been paid by the supplier under the existing law, subject to the condition that the invoice or any other tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adu Goods and Service Tax Act, 2017, which reads as under:- Section 18.Availability of credit in special circumstances - (1) ...... (2) ...... (3) Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed. 34. The credit would have survived for being transitioned under the Tamil Nadu Goods and Service Tax Act, 2017 provided the petitioner continued to have transactions in Tamil Nadu. It is confined to credit which was carried forward under any existing law or goods which were held in stock on the appointed date. Therefore, the aforesaid amount of input tax credit, even if it was lying unutilized as on 01.07.2017 cannot be transitioned to a new registration obtained after implementation of the respective Goods and Service Tax enactments to its Sri City Unit in And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s credit was validly shown as opening balance as on 1st April 2017 in the returns filed in Form ST-3 filed on 22.8.2017, there is no question of either transitioning it into Trans-1 or its further utilization. If such credit of ₹ 9,09,855/- was reflected in the previous returns, the petitioner may be entitled to utilize the same if it raises invoice for supply of goods or service from its Chennai office even though the petitioner has shifted its operation from Chennai to Andhra Pradesh during June 2016. 44. To that extent, after verification of the aforesaid credit of ₹ 9,09,855/- input tax credit availed on input service, can be allowed to be utilized by the petitioner. Jurisdictional officer who is responsible examining the correctness of the above input tax credit on the input service amounting to ₹ 9,09,855/- may therefore examine the same and pass appropriate orders in accordance with law within a period of three months of this order. 45. As far as the input tax credit availed on inputs out of a sum of ₹ 2,77,10,052/- is concerned, it would altogether require a separate reconsideration on facts. 46. This credit was purportedly carried f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State of Andhra Pradesh. The petitioner also cannot feign ignorance of the aforesaid provisions of the Cenvat Credit Rules, 2004 as it was a seasoned central excise and service tax assessee. Even if it had shifted inputs and capital goods to its Andhra Pradesh unit, it would have raised appropriate central excise invoice under Rule 4 of the Central Excise Rule, 2002 by debiting the CENVAT credit to its Andhra Pradesh unit under Rule 3(5) of the CENVAT Credit Rules, 2004 read with Rule 4 and Rule 8(2) of the Central Excise Rules, 2002. It is not clear from the records what was cleared and how much tax was paid as the petitioner had not followed Rule 10 of the CENVAT Credit Rules, 2004. 49. The petitioner has filed a copy of Order-in-Original No. 3/2007(AC) dated 10.11.2017 passed by the Assistant Commissioner of Central Excise. The said order has been passed against the petitioner. Penalty has been imposed against the petitioner under Rule 25 of the Central Excise Rules, 2002 for the failure of the petitioner for having cleared the export goods without payment of excise duty during the period between January 2015 to June 2016 without complying with the provisions of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenanced. This would require proper verification. Facts are not clear. 54. There is also no question of transfering the aforesaid amount to the petitioner's Sri City Factory in the State of Andhra Pradesh for utilizing its tax liability as the petitioner failed to follow Rule 10(3) of the Cenvat Credit Rules, 2004. 55. Sub Section 2 to Section 25 of the Central Goods and Service Tax Act, 2017 also makes it clear that a person seeking registration under the aforesaid Act shall be granted a single registration in a State or Union Territory. The proviso also makes it clear that a person having multiple places of business in a State or Union Territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed. 56. That apart, sub-section 4 to Section 25 of the Central Goods and Service Tax Act, 2017 also makes it clear that a person who has obtained or is required to obtain more than one registration in a State or Union Territory, whether in one State or Union Territory or more than one State or Union Territory shall, in respect of each such registration, be treated as a distinct persons for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty liability on the exported goods and the petitioner could have availed rebate under Rule 18 of the Central Excise Rules, 2002 or to claim refund of input tax credit on the input used in the manufacture of export goods under Rule 5 of the CENVAT Credit Rules, 2004. 60. Strangely, the petitioner had not opted for any of the above while making export. The, fate of such input tax credit lying unutilized is to be examined in the light of the provisions of the Central Excise Act, 1944, Central Excise Rules, 2002, CENVAT Credit Rules, 2004 and the relevant notifications. It is assumed that the petitioner had opted neither to pay excise duty to claim rebate under Rule 18 of the Central Excise Rules, 2002 as it stood then nor in the alternative claimed refund under Rule 5 of the CENVAT Credit Rules, 2004. There is also no explanation forthcoming from the petitioner as to why the petitioner failed to opt for Rule 10(3) of the CENVAT Credit Rules, 2004. 61. It is quite possible that the petitioner while removing the capital goods, work in progress and inputs had not discharged its liability under Rule 3(5) of the CENVAT Credit Rules, 2004. It would require for detailed exami ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
