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TMI Blog2025 (2) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... - If the sale of "holographic sticker" is to be treated as a supply of service, the petitioner would be liable to pay tax on Reverse Charge Basis (RCB) in terms of Sl.No.5 to Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. Holographic Sticker (Excise Label) is a "label". Holographic Sticker (Excise Label) is therefore 'goods' within the meaning of Section 2 (52) of the respective GST enactments. In paragraph 4.3 of Order in RFD-06 in C.No. IV/09/51/2020-GST (R) dated 20.08.2020 itself it has been clarified by the 2nd respondent that excise labels i.e., "holographic stickers" were supplied by the Prohibition and Excise Department - there is no dispute that "label" is "thing" viz., noun. It is a thing and therefore "goods" within the meaning of Section 2 (52) of the respective GST enactments as "goods" means every kind of movable property. The only contention of the respondents is that there was a "composite supply" as the label was supplied by the Prohibition and Excise Department is for affixing on the liquor bottles manufactured by the petitioner as per the relevant instructions / procedures together with grant of excise license - The question of treating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: Mr. G. Natarajan. For the Respondents: Ms. Anu Ganesan Junior Standing Counsel and Mr. B. Ramanakumar Senior Standing Counsel. ORDER PER The petitioner is before this Court against the Impugned Order-in-Appeal No. 03/2021 dated 21.01.2020 passed by the 1st respondent Joint Commissioner of GST & CE (Appeals II). 2. By the said Impugned Order-in-Appeal dated 21.01.2021, the 1st respondent has rejected the Appeal No.114/2020/GSTA-II/ADC/CO filed by the petitioner against Order-in-Original Notification No. 13/2017-Central Tax (Rate) dated 20.08.2020 bearing reference: RFD-06 passed by the second respondent. 3. The 2nd respondent as the Original Authority had earlier rejected the refund claims of the petitioner with the following observations:- "4.3 In the instant case, the excise labels supplied by the state prohibition department appeared to be in the nature of composite supply as the labels are supplied by the state excise department for affixing on the liquor bottles manufactured by the tax payer as per the relevant instructions / procedures prescribed by the State Government to indicate compliance and the labels are not for sale as such by the taxpayer. It, therefore, ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay GST under RCM on the aforesaid activity and are not entitled for refund, I do not find it necessary to examine the applicability of doctrine of unjust enrichment. To sum up, I find that there is no merit on the taxpayer's averments and I hold that the 22 refund claims filed by the taxpayer are liable to be rejected. Hence, I pass the following order. ORDER I reject all the 22 claims filed by the taxpayer under the category of "Excess payment of Tax" for the period April 2018 to February 2020 under Rule 92(3) of the CGST Rules, 2017 read with Section 54 of the CGST Act, 2017." 4. Operative portion of the Impugned Order-in-Appeal dated 21.01.2021 passed by the 1st respondent Joint Commissioner of GST & CE (Appeals II) reads as under:- "7. I have carefully considered all the relevant facts of this appeal including the counter points made by the appellants in their grounds of appeal as well as those made during the virtual hearing. The issue that calls for decision in this appeal is whether the appellant has right to claim the refund of the GST paid by them on RCM basis on the amounts paid to the Government of Tamil Nadu for the activity of procuring and affix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard, endeavoured to count on the Notification No. 25/2012-Central Tax (Rate) dated 30/09/2019 whereby the "Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called" has been treated neither as supply of goods nor as supply of service to drive home their point that since the main activity of grant of licence by the State Government to manufacture alcoholic liquor itself is not a taxable supply, the supply of holograms cannot become either as a composite supply or remain as an Independent activity. I find that this argument of the appellant lacks merit for the reason that the activity of grant of license and providing the holograms are two distinctly different activities with different objectives. The licensing of the manufacture, bottling and supply of alcoholic liquor would have its objective for regulate and garner revenue for the Government from such supply whereas, as per policy note for the year 2012-13 Issued by the Home, Prohibition and Excise Department of Government of Tamil Nadu as per Para 2.16 titled 'STATE EXCISE LABELS' it has been observed that: "In G.O (Ms) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government. Accordingly, the reliance sought to be placed by the appellant on the case Laws cited also proves to be misplaced and bears no relevance to the case on hand as they were rendered in the context of classification of such holograms when they were sold by the manufacturer for a consideration to the Government for its purpose. I also find that the decision of Hon'ble Supreme Court in the case of Har Shankar & Ors Vs Dy. Excise & Taxation Commissioner & Ors [1975 (1) TMI 89 SC] is not helping the cause of the appellants as the facts Involved in the said case are totally different from the case under consideration. I therefore hold that the appellants' appeal fails on the grounds of merit and therefore is liable to be rejected. In view of the above discussion and findings, I proceed to pass the following Order: ORDER I reject the appeal filed by the appellant bearing A.No.114/2020/GSTA-II/ADC/CO dated 19/11.2020." 5. The facts of the case are that the petitioner is engaged in the manufacture and sale of "Beer" from its Brewery. As is required under the Excise Policy of the State Government, the petitioner has to affix "holographic stickers" on every bottle of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019 reads as under:- "Alcoholic Liquor Licence - Grant thereof not to be treated as supply of goods / services In exercise of the powers conferred by sub-section (2) of Section 7 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council hereby notifies that the following activities or transactions undertaken by the State Governments in which they are engaged as public authorities, shall be treated neither as a supply of goods nor a supply of service, namely:- "Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called". 12. It is the case of the petitioner that the "holographic stickers" purchased by the petitioner from the Prohibition and Excise Department was supply of goods and not service and therefore not liable to tax in terms of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. It is further submitted that service by way of grant of alcoholic liquor licence, against consideration in the form of license fee or application fee or by whatever n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the petitioner on a specific query submits that for the period after February 2020 whether the petitioner was paying tax on Reverse Charge Basis (RCB) or whether any notice has been issued to the petitioner for the period thereafter. 20. The learned Senior Standing Counsel for the respondents undertook to confirm the position. The learned counsel for the petitioner was directed to confirm as to how the benefit of Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019 is applicable to the petitioner as supply of "holographic stickers" would neither be supply of goods nor supply of service prior to 30.09.2018. 21. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents. 22. There are 2 distinct activity carried out by the State Government. The 1st activity is the activity of granting liquor license to the manufacturers for manufacturing alcoholic liquor in the State of Tamil Nadu under the provisions of the Tamil Nadu Prohibition Act, 1937. It is an activity carried by the State of Tamil Nadu as a sovereign authority. 23. As per Section 7 (2) of the respective GST enactments, certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply of "services" mentioned in column (2) of the Table below, supplied by a person as specified in column (3) of the said Table, the whole of central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of such services as specified in column (4) of the said Table:- Table Sl.No. Category of Supply of Services Supplier of Services Recipient of Service (1) (2) (3) (4) 1 ... ... ... 2 ... ... ... 3 ... ... ... 4 ... ... ... 5 Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, - (1) Renting of immovable property, and (2) Services specified below- (i) Services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority; (ii) Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) Transport of goods or passengers. Central Government, State Government, Union territory or local authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product insert. [Food Safety and Standards Act (34 of 2006), S 3(1)(z); Prevention of Food Adulteration Rules, 1955, Rule 32, Expln. 1 as inserted by 5th Amendment of the Rules, 2008, R. 3(VI)] "LABEL" means any written, marked, stamped, printed or graphic matter affixed to, or appearing upon any prepackaged commodity. [Legal Metrology Act, 2009 (1 of 2010), S 2(1)] "LABEL" means any written, printed, marked, stamped, or graphic matter affixed to, or appearing upon, the tubular fluorescent lamp. [Bureau of Energy Efficiency (Particular and Manner of their Display on Labels of Tubular Fluorescent Lamps) Regulations, 2009, Regn. 2(b)] "LABEL" means any written, printed, marked, stamped, or graphic matter affixed to, or appearing upon, room air conditioner. [Bureau of Energy Efficiency (Particulars and Manner of their Display on Labels of Room Air Conditioners) Regulations, 2009, Regn. 2(1)(b)] "LABEL" means any written, printed, marked, stamped, or graphic matter affixed to, or appearing upon, household frost free refrigerator. [Bureau of Energy Efficiency (Particulars and Manner of their Display on Labels of Household Frost Free Refrigerators) Regulation, 2009 2(1)(b)] "L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iner or package of medicinal products, means affixing to or otherwise displaying on it a notice describing or otherwise relating to the contents, and 'label' has a corresponding meaning [(English) Medicines Act, 1968, S. 132(1)] Requirement, either mandatory or voluntary, to specify whether a product satisfies certain conditions relating to the process by which it was produced or its characteristics. Labelled or Sealed, Neither the word "labelled" nor the word "sealed" necessarily means that it should contain the name of manufacturer, 106 IC 587 : 29 Cr LJ 75 : 9 PLT 434 : 9 AI Cr R 352 : AIR 1928 Pat 213." 33. Holographic Sticker (Excise Label) is a "label". Holographic Sticker (Excise Label) is therefore 'goods' within the meaning of Section 2 (52) of the respective GST enactments. In paragraph 4.3 of Order in RFD-06 in C.No. IV/09/51/2020-GST (R) dated 20.08.2020 itself it has been clarified by the 2nd respondent that excise labels i.e., "holographic stickers" were supplied by the Prohibition and Excise Department. 34. As per Section 2 (m) of the Trade Marks Act, 1999, the expression "mark" includes a device, brand, heading, label, ticket, name, signature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 supply; 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. "taxable supply" means a supply of goods or services or both which is leviable to tax under this Act. 42. As far as the manufacturing license under the provisions of the Tamil Nadu Prohibition Act, 1937 and the rules made thereunder are concerned, it is one time annual license fee paid by a manufacturer of alcoholic beverage to the Prohibition and Excise Department of the Government of Tamil Nadu. As far as the supply of "holographic stickers" (excise labels) are concerned, they are to be procured and affixed by such manufacturers viz., breweries / distilleries as and when manufactured (brewed / distilled) alcoholic beverages are bottled and sealed and are to be removed for sale either in the wholesale or retail mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the respective GST enactments. 50. Therefore, the question of treating the supply of "holographic stickers" (excise labels) cannot be treated as a "composite service" along with grant of liquor license under the provisions of the Tamil Nadu prohibition Act, 1937. In any event, supply of holographic stickers (excise labels) is supply of "goods" simplicitor and not a supply of "service". 51. Therefore, the procurement of "holographic stickers" (excise labels) will not attract payment of GST on Reverse Charge Basis (RCB) in terms of Sl.No. 5 to Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. Sl.No.5 to Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. Payment of GST on Reverse Charge Basis (RCB) would apply only for supply of services 52. The principles of estoppel equity are alien to tax jurisprudence. Merely because the petitioner had unwittingly paid tax on Reverse Charge Basis (RCB) in terms of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017 in the past ipso facto would not mean that the petitioner was bound by its past practices. There is no contract with the respondents for invoking promissory estoppel against the petitioner. 53. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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