TaxTMI 
TaxTMI 
2018 (10) TMI 1925
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.... would also mean a reference to the same provisions under the UPGST Act. Brief Facts of the Case 1. M/s. Khandelwal Extractions Ltd., 51/47, 3^rd Floor, Keshwarwani Bhawan, Naya Ganj, Kanpur, Uttar Pradesh-208001 (here in after called the applicant) is a registered assessee under GST having GSTN : 09AAACK5505F1ZS. 2. The Applicant is engaged in the business of purchases of Mahua oil cake / Rice Bran for extraction of oil through solvent extraction Process. 3. The Applicant in his application before the Authority on Advance Ruling (hereinafter referred to as AAR), had raised following issues for determination by the Authority - a) Whether Mahua De-oiled cake/ De-oiled Rice Bran, being used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds is 'Waste generated' during the Solvent Extraction process? b) Whether the applicant is eligible to get entire tax input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil? 4. During the personal hearing Shri Pawanshree Agrawal and Shri Vaibhav Dixit, Advocates had appeared before the AAR on behalf of the applicant. In the w....
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....t allowable in the present case since; the party is manufacturing taxable as well as exempted supply." 6. On the basis of the facts disclosed in the application, the oral and written submissions made at the time of personal hearing, documents produced during the personal hearing and the views submitted by the jurisdictional Officer, CGST and CX, Kanpur, the Authority for Advance Ruling vide their Order 07 dated 25.05.2018 passed the point wise ruling as follows:- a) Whether Mahua De-oiled cake/ De-oiled Rice Bran, being used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds is `Waste generated' during the Solvent Extraction process? Ans. - Mahua De-oiled cake/ De-oiled Rice Bran is a by-product occurred during the Solvent Extraction process, which is used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds. b) Whether the applicant is eligible to get entire tax input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil? Ans. - The Input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent ext....
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....edent decisions of the higher judicial forum on the premise that the said cited decisions were of pre GST regime, hence were inapplicable to the present context. (ii) That the de-oiled cakes were unintended products of their main manufacturing activity of manufacture of rice bran oil/mahua oil and were in fact technological necessity and therefore were 'waste products' not exigible to GST. The appellant in his his appeal application has prayed for:- (a) setting aside/modifying the order of AAR. (b) The term waste is not defined in CGST Act 2017 and therefore the case laws of Apex court and Higher Courts are having binding value on the scope of the term. (c) The 'Waste' generated during the manufacturing process cannot be treated as 'supply' in light of judicial pronouncements since it is mere technological necessity. (d) The provisions of Section 17 and more specifically sub-section (2) of CGST Act 2017 are inapplicable. (e) Entire Input Credit should be allowed since the whole of it is being used in the manufacture of solvent extract oil. At the very outset, we concede the contention of the appella....
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....re technical necessity'. In fact the de-oiled cake is a very much intended product in as much as it may affect the overall financial health of the company. This is reflected in the Director's Report of the Balance Sheet for 2018-19 (available on their official website) inter alia - "Further, depressed demand of de-oiled cakes have changed the industrial scenario altogether. These factors have affected the company's working." Thus, through an elaborate process, chemical testing and packing, the de-oiled cakes are finally manufactured made marketable. So, the appellant's contention that the de-oiled cake is not manufactured but is generated during the course of manufacture of extracted oil, is contrary to facts. The cited decisions of Balarampur Chini Mills and Hindalco Industries Ltd., accordingly, are inapplicable as in the present case de-oiled cake is obtained after desolvetising process on which chemical test is done and are then packed in unit containers, all of which come under the ambit of 'manufacture'. Hon'ble Supreme Court, in the case of Commissioner of Central Excise vs. Goyal Proteins Ltd. [2017 (355) ELT A27 S.C.] has maintained the order....
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....he case are exactly similar in as much as the de-oiled cake is manufactured, chemically tested and packed in branded unit packaging and marketed for considerable commercial consideration. Hence they are 'goods' and sale definitely takes place. So, the above decision is specifically applicable. Definition of 'supply' Under section 2 (92) read with section 3 'supply' includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Schedule I specified the supply. The word Supply replaces the operative term sale. Thus, no scope has been left for any confusion and the definition includes every term which is in any form liable to be termed as sale. Even the supply which is made or agreed to be made without a consideration will also amount to sale. Supply includes (a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business, ....