Petition Dismissed: Goods Must Have Pre-GST Excise Duty Exemption Under Same 8-Digit HSN Code for Support Eligibility

M/s Best Crop Science Industrial Area, Kathua Versus Union of India and others

M/s Best Crop Science Industrial Area, Kathua Versus Union of India and others - 2023 (385) E.L.T. 339 (J & K and Ladakh) Issues Involved:
1. Eligibility for budgetary support under the new GST regime.
2. Definition and scope of "specified goods" under the new Scheme.
3. Interpretation of the Exemption Notification and its applicability post-GST.

Summary:

Eligibility for Budgetary Support:
The petitioner, a partnership firm registered under the MSME Act, 2006, challenged the rejection of its claim for budgetary support under a scheme introduced post-GST. The firm argued that it was entitled to the benefit as it was manufacturing goods under Chapter 38 of the Central Excise Tariff Act, 1985, and had availed excise duty exemptions prior to the introduction of GST.

Definition and Scope of "Specified Goods":
The court examined whether the petitioner's goods fell under the definition of "specified goods" as per the new Scheme. The Scheme provides budgetary support for goods that were being manufactured and cleared by the eligible unit by availing excise duty exemption before the introduction of GST. The petitioner contended that any goods under Chapter 38 should qualify, while the respondents argued that only goods with the same 8-digit HSN code as those manufactured and exempted earlier would be eligible.

Interpretation of the Exemption Notification:
The court noted that the Exemption Notification under the Central Excise Act, 1944, specified "all goods" under Chapter 38 for excise duty exemption. However, the new Scheme required that the goods must have been manufactured and cleared with excise duty exemption prior to GST to qualify for budgetary support. The court emphasized that the classification structure under the Excise Tariff Act involves specific 8-digit HSN codes, and the exemption could only be claimed for these specific items.

Judgment:
The court held that the petitioner's interpretation was incorrect. To qualify for budgetary support, the goods must have been manufactured and cleared with excise duty exemption under the same 8-digit HSN code prior to GST. The court agreed with the respondents that the petitioner did not manufacture and clear the specific goods under the required HSN codes before GST and thus was not eligible for budgetary support. The petition was dismissed, affirming the respondents' decision.