9911796707
TMI Blog2025 (2) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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, appears that the supply of labels by the Department of Prohibition and Excise, Government of Tamil Nadu is naturally bundled and supplied in conjunction with the service provided by the said department to the taxpayer to comply with the requirement to indicate the duty paid nature of the ultimate goods supplied by the taxpayer. 4.4 Further, on verification of the demand report ID No. DI2018041200004 and e-acknowledgement reference details of the Department of Prohibition and Excise, Government of Tamil Nadu furnished by the taxpayer, it appeared that the demand is in the form of "Fee Type" and the activity is also mentioned as a service I.e. "Service Name: Label cost". It, therefore, appeared that the supply of labels by the State Excise Department is 'not' goods as contended by the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 affixing holograms on the bottles containing the alcoholic beverages manufactured by them. Admittedly, the appellants herein are engaged in manufacture, bottling and distribution of alcoholic beverages under license and as per conditions stipulated by the Government of Tamil Nadu (Government for short). One of the mandatory conditions that the appellants have to comply is to procure the security holograms from the Government by paying a prescribed amount and affix the same on all the bottles containing the alcoholic beverage. The appellants were paying taxes as per GST Law under RCM basis on such payments made to procure the security holograms. The appellants claim that they were under bona fide belief that such activity amounted to service provided by Government and they were liable to pay tax un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. 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) No.115, Home, Prohibition and Excise Department dated 05/06/2003, the Government ordered use of polyester hologram excise labels with modem technology to prevent the transportation and sale of spurious liquor. Pursuant to this, polyester holograms that cannot be forged are being manufactured and distributed by a private company selected by the open tender system in March. 2004. These labels are being affixed on the IMFS and Beer bottles." It is therefore, clear that the objective of use of holograms is to prevent the transportation and sale of spurious liquor. Hence, the payments made for procuring the holograms cannot get covered under the category of payments envisaged in the Notification No. 25/2012 ibid. I therefore find that the reliance sought to be placed by the appellant on the Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Beer which is sold in the retail market through TASMAC. It is intended to ensure that no spurious liquor is sold in the market. It also indicates payment of State Excise on every bottle of Beer sold by the petitioner. 6. In this connection, the petitioner has drawn attention to liquor policy of the Government of Tamil Nadu as also some of the laboratories giving details of the purpose of Holographic Excise Adhesive Label (Heal) which indicates these "holographic stickers" are intended to ensure collection of tax and also to protect consumer and to curb sale of illicit liquor in the market. 7. The case of the petitioner is that the petitioner was under a bona fide belief that the petitioner was liable to pay tax on the "holographic stickers" purchased from the Prohibition and Excise Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graphic 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 name it is called by the State Government in which it is engaged as public authorities shall be treated neither as a supply of goods nor a supply of service in terms of Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019. It is therefore submitted that the petitioner was entitled to refund of the amount paid on tax on Reverse Charge Basis under Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. 13. The case of the petitioner is that since the petitioner is purchasing "holographic stickers" from the Prohibition and Excise Department, it is not taxable in the hands of the petitioner as there is no Notification issued under the provisions of the respective GST Enactment of 2017, which mandates payment of tax on Reverse Charge Basis (RCB) for sale of holographic stickers. 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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, certain activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities shall be treated neither as a supply of goods nor supply of services. It has to be notified by the Government on the recommendation of the GST Council. 24. In this connection, Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019 has been issued. As per the Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019, service by way of grant of alcoholic liquor license, against consideration in the form of license fee and application fee or by whatever name it is called is neither treated as a supply of goods nor a supply of services. 25. Thus, activity of granting of liquor license is neither a supply of service nor supply of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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 Any business entity located in the taxable territory 30. On the other hand, if the supply of "holographic sticker" (excise label) is treated as a supply of "goods", it would be outside the purview of tax payable by Reverse Charge Basis (RCB) at Sl.No.5 to Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. 31. As per Section 2 (52) of the Central Goods and Services Tax (CGST) Act, 2017, "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. 32. The expression "label" has not defined in the Trade Marks Act, 1999. In P. Ramanatha Aiyar's Advanced Law Lexicon, 5th Edition, the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articulars 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)] "LABEL" means any written, printed, marked or graphic matter affixed to, or appearing upon, the distribution transformer [Bureau of Energy Efficiency (Particulars and Manner of their Display on Labels of Distribution Transformers) Regulations, 2009, Regn. 2(1)(c)] "LABEL" includes any band or ticket, [(English) Agricultural Produce (Grading and Marking) Act, 1928, S. 7] "LABEL" includes any device for conveying information by written characters or other symbols, and any characters or symbols stamped or otherwise placed directly on to any produce or container, and references to the affixing of a label shall be construed accordingly. [(English) Agriculture and Horticulture Act, 1964, S. 24] A placard or slip attached to an object to denote its contents, destination or ownership; a slip of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof in Section 2 (m) of the Trade Marks Act, 1999. Similarly, the expression "package" in Section 2(q) of the Trade Marks Act, 1999 also includes "label". 35. The expression "mark" and "package" in Section 2 (m) and Section 2(q) of the Trade Marks Act, 1999 read as under:- Section 2 (m) Section 2(q) "mark" includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. "package" includes any case, box, container, covering, folder, receptacle, vessel, casket, bottle, wrapper, label, band, ticket, reel, frame, capsule, cap, lid, stopper and cork. 36. Thus, there is no dispute that "label ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 market. 43. That apart, under Section 2 (30) of the respective GST enactments, supply should consist 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. 44. Supply of "holographic sticker" is not a "taxable supply" within the meaning of the definition in Section 2 (108) of the respective GST enactments, as grant of excise license is exempted under Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019. 45. The illustration in section 2 (30) of the respective GST enactments also make it clear that there was no composite supply within the meaning of the definition of "composite supply". 46. Therefore, supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the petitioner has paid tax on Reverse Charge Basis (RCB) by mistake, it is entitled to claim refund under Section 54 of the respective GST enactments. 54. In view of the above discussion, the Impugned Order dated 21.01.2021 passed by the 1st respondent upholding the Order dated 20.08.2020 of the 2nd respondent are liable to be quashed and are accordingly quashed with consequential relief to the petitioner. The 2nd respondent is therefore directed to process the refund claims of the petitioner and refund the amounts paid by the petitioner, strictly in accordance with Section 54 of the respective GST Acts read with Rule 89 of the respective GST rules in the light of the above observations, within a period of 3 months from the date of receipt of a copy of this order. 55. This Writ Petition, is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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