TaxTMI 
TaxTMI 
2021 (7) TMI 223
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....were suo-motu impleaded as necessary party by this Court. The case of the petitioner in the present writ petition is that the petitioner had shut down its factory in Ambattur, Chennai in Tamil Nadu and shifted to Sri City, Andhra Pradesh during June 2016 much prior to implementation of GST. At that point of time, the petitioner had accumulated input tax credit under Cenvat Credit Rules, 2004 which had remained unutilized owing to the fact that the petitioner was pre-dominantly engaged in export of final products. Therefore, the petitioner orally requested the jurisdictional Assistant Commissioner of Central Excise (the 1st respondent) and the 2nd respondent to permit the transfer of accumulated input tax credit lying unutilized in its CENVAT Account to its new factory in Sri City, Andhra Pradesh in terms of Rule 10 of the CENVAT Credit Rules, 2004. 3. As per the petitioner, out of Rs. 2,86,19,907/- a sum of Rs. 2,77,10,052/- represented input tax credit lying unutilized on various inputs and a sum of Rs. 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 ....
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....s from the 3rd respondent. These applications were rejected by the 1st respondent. The petitioner was directed to approach the State authorities for claiming refund. 9. It is the case of the petitioner that it is entitled to transfer the unutilized credit to its Sri City unit, Andhra Pradesh in terms of Section 18(3) of the Central Goods And Service Tax Act, 2017 read with Rule 41 of the CGST rules, 2017. It is submitted that similarly the petitioner is entitled for transfer of its input tax credit lying unutilized under TNVAT Act, 2006. 10. The learned counsel for the petitioner submits that the capital goods have been already transferred to its Sri City unit, Andhra Pradesh and therefore it is entitled for transfer the unutilized input tax credit. However, the attempt of the petitioner to transfer the input tax credit lying unutilized through Form GST ITC-02 was not fruitful as the drop box on the dashboard of the respondent screen states that GST number 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 anot....
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.... 14. Defending the stand of the revenue Mr.A.P.Srinivas, the learned Senior Standing counsel for respondent Nos. 1,2 5 & 6 - and Mr.Mohammed Shaffiq, the learned Special Government Pleader, for the respondent Nos.3,4 & 7 duly assisted by Ms.G.Dhana Madhri (Government Advocate) submitted that there is no question of transfer of the input tax credit under the new regime and/or under the old regime. 15. As far as transfer of input tax credit from the provisions of the TNVAT Act, 2006 is concerned Mr.Mohammed Shaffiq, the learned Special Government Pleader, for the respondent Nos.3, 4 & 7 submitted that the right to file Trans-1 and consequent Trans-2 would survive only if the unit was carrying on business in the State of Tamil Nadu within the State. In this case, admittedly, the petitioner has shut down the business during July 2016 and therefore in terms of section 19(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 o....
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....er herein. The case of the petitioner for shifting of its unit from one State to another State is not contemplated under the above provisions. 22. It is further submitted that under the respective GST enactments, separate Statewise registration u/s.25 is contemplated and when a person is having units in different States or Union Territory, every and every such unit situated in such State or Union Territory is an independent assessee in the respective State or Union Territory and they are considered as separate and distinct person and not as the same person. Admittedly, the petitioner is having separate GST Registrations for the defunct unit at Chennai and separate GST registrations for the unit at Andhra Pradesh and under Sec.25 of the respective GST enactments. It is submitted that they have treated as separate and distinct 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....
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....imed balance of unutilized input tax credit of Rs. 31,38,891/-. This amount was transferred by the petitioner by filing Trans-1 under sub-section (4), (5) & (6) to Section 140 under Chapter XIV of the Tamil Nadu Goods And Service Tax Act, 2017 read with Tamil Nadu Goods and Service Tax Rules, 2017. 30. Section 140(4), (5) & (6) of the Tamil Nadu Goods and Service Tax Act, 2017 read as under:- "Section 140.Transitional arrangements for input credit- (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit [of eligible duties] carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under 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 prece....
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....than twelve months immediately preceding the appointed day; and (v) the supplier of services is not eligible for any abatement under this Act: Provided that where a registered person, other than a manufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing payment of duty in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed. (4) A registered person, who was engaged in the sale of taxable goods as well 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 an....
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....xisting law for the period of six months immediately preceding the appointed date. 32. Such transfers are further subject to Rule 117(3) of the Tamil Nadu Goods and Services Tax Rules, 2017. It reads as under:- "Rule 117.Tax or duty credit carried forward under any existing law or on goods held in stock on the appointed day- (1) ..... (2) ..... (3) The amount of credit specified in the application in FORM GST TRAN-1 shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the common portal." 33. The petitioner cannot further transfer such credit to its Sri City Unit in Andhra Pradesh in view of Section 18(3) of the Tamil Nadu 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, merg....
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....,09,855/- as input tax credit as on 1st day of April 2017. 41. There was no use of such service in the manufacturing activity. Therefore, it was not capable of being used for meeting the excise duty liability. 42. It indicates that credit also was carried forward from the previous returns and the same was filed for the period between April-September 2017. This would however require a proper verification as to whether the credit that was transferred as opening balance on 1st day of April 2017 was indeed the closing balance on 31st March 2017. 43. Unless there is a proper verification as to whether this 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 Rs. 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 Rs. 9,09,8....
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....r the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central Excise. 48. It is not clear as to why the petitioner chose not to transfer the input tax credit under the aforesaid provision in June 2016 when it shifted its factory from Ambattur Industrial Estate to a new location in Sri City in the 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 petiti....
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....er should have complied with the requirements of Rule 10 of the CENVAT Credit Rules, 2004. 53. The said Order-in-Original No.3/2007(AC) dated 10.11.2017 though mentions about the monthly returns, it does not mention about the input tax credit lying unutilised in these returns. Therefore, unless same is verified and such credit and was periodically carried forward in the monthly returns, question of the petitioner transferring such credit into Trans-1 or directly asking the respondent to refund the aforesaid amount cannot be countenanced. 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....
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....port clearances in its ER-1 Returns for the period commencing from January, 2015 ending with June, 2016. It is further noticed that the petitioner had exported goods for a assessable value of Rs. 33,90,82,523/- without paying duty or executing proper bond under Rule 19 of the Central Excise Rules, 2002. The duty payable on the exported goods was determined as Rs. 4,23,51,107/-. Thus, the credit of Rs. 2,77,10,052/- which was transitioned would have been sufficient to cover a part of 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, 20....