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TMI Blog2024 (3) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... given an opportunity of being heard. 2. Under Section 103(1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only,- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same in the warehouse. The FTWZ unit hands over the import invoice and other necessary documents to the Appellant. The FTWZ unit does not pay any import duty on clearance from the port. * The Appellant transfers the title of goods to customer under the cover of an invoice. The customer shall either clear goods from the FTWZ or shall make further transfer of such goods to other customers. It is important to note that every transfer of title of goods does not result in physical delivery of goods. The goods shall continue to remain in FTWZ unit holder till the final customer files BOE and clears goods from FTWZ. The Applicant wishes to highlight that multiple transfers are made while goods are lying in FTWZ. * The final customer, produces transfer of title document and files BOE for re-warehousing (SEZ) / home consumption (others) and clears the goods from the FTWZ. At this juncture goods are removed from the warehouse and is taken to the premises of the Customer. 2.3. In the above background, the Appellant had approached Authority for Advance Ruling (AAR), Tamil Nadu, vide GST-ARA-01 dated 08.07.2022, raising the following questions: "1. In the facts and circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adwith CGST Amendment Act, 2018." 3. Aggrieved of the decision of AAR in the Order No: 23/ARA/2023 dated: 20.06.2023, M/s HAWORTH INDIA PRIVATE LIMITED preferred the subject appeal. The grounds of appeal, they stated, inter alia, as follows: * The Impugned Ruling has failed to address the question in entirety by restricting its finding to 'whether or not the proposed transaction is covered under paragraph 8(a) of Schedule III to GST Act, 2017'. * The Ld. AAR, has not answered the question in the Impugned Ruling and has acted in contravention of Section 98(4) of the GST Act, 2017 and therefore, the Impugned Ruling is liable to be set aside and in this regard reliance was placed on the case of Kasturba Health Society v. Union of India, W.P. No. 1745 of 2020 Order dated 13.09.2021 (Bombay High Court) * Reliance is placed on Columbia Sportswear Company v. Director of Income Tax - 2012 (8) TMI 105 - Supreme Court, wherein the Hon'ble Supreme Court dealt with the preliminary question of whether an Advance Ruling can be subject to judicial review under Article 226 of the Constitution of India. * The Impugned Ruling failed to address the question raised in the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, wherein it was held that transfer of ownership in FTWZ/ customs bonded warehouse prior to clearance for home consumption or removal of goods from FTWZ/ customs bonded warehouse is outside the purview of GST and is not subjected to provisions of GST and that the supplier need not have to charge GST on transfer of title or sale of goods in FTWZ. * Therefore, the proposed transactions are covered under paragraph 8(a) of Schedule III to GST Act, 2017 and the Impugned Ruling merits to be modified, and that the Appellant's transactions are neither supply of goods, nor supply of services and that IGST is not leviable. * The AAR had acted inconsistently that in the above Rulings, for the same issue, the rulings were in favour of the applicants; though the rulings have been rendered in relation to other assessees, the decisions are on interpretation of the law and lay down a position of Law and the Ld. AAR cannot take a completely different position of Law in the Appellant's case. * The above inconsistency is on the face of the record and the same displays arbitrariness and discriminatory treatment by the Ld. AAR and therefore the impugned Ruling unsustainable in Law; In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t: The Assessment of imports and domestic procurement by a Developer or a Unit, shall be on the basis of self-declaration. e) Rule 75 of the SEZ Rules says that the goods in the FTWZ shall be dealt with on the basis of self-declaration * The AAR in Telangana in the matter of AIE Fibre (2021 (12) TMI 1265 - Authority for Advance Ruling, Telangana) has held that the goods warehoused in the FTWZ are warehoused goods for the purpose of the Customs Act, 1962 and would be covered by the relevant entry 8 in Sch III of the CGST Act. * Intention of the legislature to consider FTWZ like a customs warehouse is also clear from the documentation and procedures i.e., Form-II (Bill of entry for warehousing) is the document filed by the importer for moving goods from the port to FTWZ unit which clearly establishes FTWZ are considered as Warehouses. * Legislative History also points out the fact that there has been no question in the erstwhile tax regime or even in the present regime with regard to warehousing by FTWZ for purpose of Customs Act; Reliance in this regard is place on the order of Authority for Clarification and Advance Ruling of the TN VAT Authority in the matter of Reddington ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, the various submissions made by the Appellant and the applicable statutory provisions. The Appellant is before us, seeking to set aside/modify the Ruling given by the Authority for Advance Ruling (hereinafter referred to as 'AAR') and pass any such order(s) as deemed fit and proper. We observe that the main contention of the Appellant is that goods stored in FTWZ will be covered under the scope of Schedule III of the CGST Act, 2017. 6.2 We find that the Appellant is proposing to import, store the goods in FTWZ, transfer the title of the goods within the FTWZ, during which time the goods continue to remain in FTWZ until the final customer files the BOE and clears the goods from FTWZ. In such a scenario, the Appellant has raised 2 questions before the AAR, that - "1. Whether the transfer of title of goods by the Applicant to its customers or multiple transfers within the FTWZ. would result in bonded warehouse transaction covered under Schedule III of the CGST Act, 2017 r/w CGST Amendment Act, 2018? 2. Whether the Integrated Tax (IGST) Circular No. 3/1/2018 dated 25.05.2018 is applicable to the present factual situation?" The AAR vide Ruling No. 23/ARA/2023 dated 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CGST Act, 2017 and do not attract tax under CGST/SGST/IGST Acts. 6.5 We find, in respect of the second question, in the grounds of appeal, the appellant stated that the question no longer proves to be of relevance as the Circular No. 3/01/2018 - Integrated Tax (IGST) dated 25.05.2018 has been rescinded. Therefore, the question no.2 does not survive. Hence, we observe that the present appeal is in respect of question no.l only raised in the original application. 6.6. We notice from the discussion held in the AAR ruling in the subject case, the AAR had discussed only about para 8(a) of Schedule III of the CGST Act, 2017 and its inapplicability to the present issue. Whereas the question raised by the Appellant in their original application is that whether the proposed activity would be covered under Schedule III of the CGST Act, 2017, which clearly means the entire Schedule III and not specific to para 8(a) of the said Schedule. We find that the AAR had restricted the discussion only to para 8(a) of the said Schedule and not proceeded to discuss about the applicability/inapplicability of 8(b) of the said Schedule to the present issue. 6.7. Further we find that the following gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtual hearing held on 11.12.2023, the AR was requested to state whether the approval/ licence/ monitoring of the FTWZ unit is governed by the SEZ Act or Customs Act for which the AR stated that he would examine and submit his reply. This is a moot point which needs to be decided, so that whether FTWZ unit can be classified as customs bonded warehouse. This ought to have been examined by the lower authority, considering the specific grounds submitted by the Appellant. 6.10. Therefore, we are of the considered opinion that since the Authority for Advance Ruling had erred in not answering the question raised by the Appellant in its entirety and also not discussed all the contentions of the Appellant put forth in their original application. Hence, we hold that, justice will be met by remanding the case to the lower authority, with direction to consider the question raised by the Appellant in its entirety, to give findings on the other points raised by the Appellant and to offer them another opportunity of personal hearing before deciding the case as per the provisions of law. The AAR should examine afresh whether the activities proposed to be undertaken by the Appellant are covered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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