TaxTMI 
TaxTMI 
2023 (1) TMI 142
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....tuated at Chak Prat Singh, National Highway-1A, Hatli Morh, Kathua (J&K); and another situated at SIDCO Industrial Complex, Lane-3, Phase-II, Bari Brahmana, Samba, are sought to be held and declared eligible for budgetary support as given under the Notification F.No.10(1)2017-DBA-II/NER dated 5th October 2017 and Notification/SRO 519 and 521 dated 21st December 2017. Respondents, by writ of mandamus, are prayed to be directed to formulate an appellate procedure for rejection of funds or against erroneous demands under Notification No.F.No.10(1)2017-DBA-II/NER dated 5th October 2017 and Notification/SRO 519 and 521 dated 21st December 2017. It is also prayed by petitioners to set-aside Order No. C.No.IV(16)GST-1/Regd-ID/Godrej/2017/2989 dated 20th August 2018, passed by respondent no.8 and declare Notification No.21/2017-Central Excise dated 18th July 2017 as illegal, unconstitutional and violative of Articles 265 and 300A of the Constitution of India. Declaring Proviso to Section 174 (2) (C) of the CGST Act, 2017 as being illegal and inconsistent with main provision of Section 174 of the CGST Act to the extent the said Proviso grants powers to issue notifications even after the app....
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....ed that petitioner-unit made additional investment with the belief that the same would yield an exemption benefit over a period of time as envisaged in the erstwhile Excise Exemption Notification which now stand rescinded and replaced with the Budgetary Support Scheme announced vide impugned Central Notification. Following the rollout of GST regime on 1st July 2017, respondent no.2 rescinded the Excise Exemption Notification vide Notification no.21/2017 dated 18th July 2017. 2.4 It is averred that petitioner, however, pre-empting the roll out of a similarly scheme as was in existence prior, went ahead and commenced commercial production from the Coil 11 unit on 27th September 2017 and subsequently, respondent no.1 issued impugned Central Notification for budgetary support, which grants an amount equivalent to 58% of the Central Goods and Services Tax (CGST) paid by petitioner after utilization of the input tax credit. 2.5 It is also stated that primary condition for availing budgetary support under impugned Central Notification was that subject unit should qualify as an Eligible Unit as defined under Para 4.1 thereof, whereby only such units that were availing the benefit under e....
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.... to apply with effect from 1st July 2017 and stands rescinded on 18th July 20177 vide notification no.21/2017 dated 18th July 2017. 3.2 It is also contended by respondents that petitioner-unit was not availing the benefit of any exemption notifications issued by the Government of India in exercise of powers conferred under Section 5-A of the Central Excise Act in the erstwhile State of Jammu and Kashmir, by way of availing funds. 3.3 It is insisted by respondents that Article 279A of the Constitution provides that GST Council shall make recommendations to the Union and States, inter alia, on issues relating to special provision with respect to the States of Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand. In its meeting held on 30th September 2016, the GST Council left it to the discretion of Central and State Governments to notify schemes of Budgetary Supports to units where the erstwhile schemes were in operation on 18th July 2017 and accordingly, the Central Government provided the Budgetary Support to eligible units for residual period by way of part reimbursement of goods and service tax paid....
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.... for budgetary support vide Notification no.F.No.10(1)2017-DBA-II/NER dated 5th October 2017. He also avers that rescinding notification has come to be issued on 18th July 2017 in exercise of powers under Section 5A(1) of the Central Excise Act when the said provision was not even in existence as Section 174 of the Central Goods and Service Tax Act repealed the Central Excise Act with effect from 1st July 2017 and it is, thus, evident that rescinding notification has been issued without any legal backing and has no legal to stand on and as a corollary thereof, rescinding notification is violative of Articles 265 and 300A of the Constitution of India. Petitioner, according to learned senior counsel, made an application on 28th February 2018, for registration of eligible unit and issuance of UID number for budgetary support, which is primary condition to avail benefits under the budgetary support and that respondent no.8 vide order impugned dated 20th August 2018 in a summary manner and without appreciation of admitted facts and in perverse manner rejected the petitioner's application, wrongly applying the eligibility criteria laid out under Para 4.1 of the Budgetary Support Notifica....
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.... State of Jharkhand v. Tata Cummins Ltd and another, (2006) 4 SCC 57; Bajaj Tempo Ltd v. Commissioner of Income Tax, (1993) 3 SCC 78; Vadilal Chemicals Ltd v. State of A.P. and others, (2005) 6 SCC 292. 6. Per contra, learned counsel for respondents has stated that in terms of Notification no.56/2002, exemption was applicable only to new industrial units which commenced their commercial production on or after 14th June 2002 and to those industrial units existing before 14th June 2002 but which undertook substantial expansion by way of increase in installed capacity by not less than 25% on or after 14th June 2002. The said exemption would apply to the units for a period not exceeding ten years from the date of publication of notification in official gazette or from the date of commencement of commercial production whichever is later. 6.1 Learned counsel for respondents has also insisted that vide notification dated 5th October 2017, a scheme was floated to provide budgetary support under GST regime to existing eligible manufacturing units operating in J&K and others, which were eligible for drawing benefits under the earlier excise duty exemption/ refund schemes viz. notification ....
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.... of Notification bearing F.No.10(1)/2017-DBA-II/NER, impugned herein, it has been in pursuance of the decision of the Government of India that Budgetary Support came to be notified to be provided to eligible manufacturing units operating in Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim under different Industrial Promotion Schemes of the Government of India, for a residual period for which each of the units is eligible, a new scheme has been introduced. The said scheme is being called as Scheme of Budgetary Support under Goods and Services Tax (GST) Regime to the Units in the aforesaid States/Territories. 7.1 The new scheme is offered, as a measure of goodwill, only to the units which were eligible for drawing benefits under the earlier excise duty exemption/refund schemes but have otherwise no relation to the erstwhile schemes. 7.2 All the earlier notifications have been rescinded and ceased to apply with effect from 1st July 2017, which includes Notification no.56/2002- CE dated 14th November 2002, no.57/2002- CE dated 14th November 2002 and no.01/2010-CE dated 6th February 2010 as amended from time to time. 7.3 The Scheme came into ....
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....g the benefit of excise duty exemption, from: (a) The premises under Central Excise with a registration number, as it existed prior to migration to GST; or (b) The manufacturing premises registered in GST as a place of business from where the said goods under exemption Notification Nos.49/2003- CE and 50/2003- CE both dated 10th June 2003 were being cleared. 7.8 "Residual period", as is given in Para 4.3 of the Notification, means the remaining period out of the total period not exceeding ten years, from the date of commencement of commercial production, as specified under the relevant notification listed in paragraph 2, during which the eligible unit would have been eligible to avail exemption for the specified goods. The documentary evidence regarding date of commercial production shall be submitted in terms of para 5.7 of the Notification. 7.9 The amount of budgetary support under the scheme for specified goods manufactured by the eligible unit shall be sum total of: 58% of the Central tax paid through debit in the cash ledger account maintained by the unit in terms of Subsection(1) of Section 49 the Central Goods and Services Act, 2017, after utilizing the Input tax credit of....
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....y exempt from GST registration or routing of third-party production or other activities aimed at enhancing the amount of budgetary support by misdeclaration would be treated as fraudulent activity and, without prejudice to any other action under law may invite denial of benefit under the scheme abinitio. The units will have to declare total procurement of inputs from unregistered suppliers and from suppliers working under Composition Scheme under CGST Act, 2017. 7.15 It is also made clear in the Notification that grant of budgetary support under the scheme shall be subject to compliance of provisions relating to any other law in force. 7.16 The manufacturer, applying for benefit under the scheme for the first time, is required to file the documents, like, copy of option filed by manufacturer with jurisdictional Deputy Commissioner/ Assistant Commissioner of Central Excise officer at relevant point of time, for availing exemption notification issued by Department of Revenue; as also document issued by concerned Director of Industries evidencing commencement of commercial production and copy of last monthly/quarterly return for production and removal of goods under exemption notifi....
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....cation is that where any amount is recoverable from a unit, the Assistant Commissioner or Deputy Commissioner of Central Tax, as the case may be, shall issue a demand note to the unit (i) intimating the amount recoverable from the unit and the date from which interest thereon is due and (ii) directing the manufacturer to deposit the full sum within 30 days of the issue of the demand note in the account head of DIPP and submit proof of deposit to him/her. Where the amount is not paid by the beneficiary within the time specified as above, action for recovery shall be taken in terms of the affidavit -cum- indemnity bond submitted by the applicant at the time of submission of the application, in addition to other modes of recovery. Where any amount of budgetary support and/or interest remains due from the unit, based on the report sent by the Assistant Commissioner or Deputy Commissioner of Central Tax as the case may be, the authorized officer of DIPP shall, after the lapse of 60 days from the date of issue of the said demand note take required legal action and send a certificate specifying the amount due from the unit to the concerned District Magistrate/Deputy Commissioner of the di....
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....tilised for payment of tax. 9.3 If any unit is found to have overstated its production or made any misdeclaration to claim reimbursement would be made ineligible for the scheme and would be liable for recovery of excess reimbursement paid to the industrial unit and that activity relating 10. Application for registration and issuance of UID number for budgetary support in favour of petitioner-unit was filed by petitioner-unit. The said application has been rejected vide impugned communication dated 20th August 2018. Given the pleadings of parties, it would be apropos to reproduce the aforesaid impugned communication hereunder: "OFFICE OF THE ASSISSTANT COMMISISONER CENTRAL GST DIVISION, SAMBA C.No.V(16)Samba Div./Tech/Unique-ID/78/2017-18 Dated:20/8/18 To M/s Godrej Consumer Products Ltd., Chak Pratap Singh, NH 1A, HatliMorh, Kathua Sir, Subject:: Application for Registration of eligible unit and issue of UID number for budgetary support in the case of M/s Godrej Consumer Products Ltd., Chak Pratap Singh, NH 1A, Hatli Morh, Kathua -regarding. *** 1 Please refer to your application dated 28.02.18 on the above cited s....
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....n Para 4.2) and the overall scheme shall be valid upto 30.06.2027. The definition of "Eligible Unit" has been specified in Para No.4.1 which states as under "Eligible unit means a unit which was eligible before 1st day of July, 2017 to avail the benefit of ab-initio exemption or exemption by way of refund from payment of central excise duty under notifications, as the case may be, issued in this regard, listed in para 2 above and was availing the said exemption immediately before 1st day of July, 2017." Para 4.4 of DIPP also defines Residual period as under: "Residual period means the remaining period out of the total period not exceeding ten years, from the date of commencement of commercial production, as specified under the relevant notification listed in para 2, during which the eligible unit would have been eligible to avail exemption for the specified goods. The documentary evidence regarding date of commercial production shall be submitted in terms of Para 5.7" 5 On the basis of DIPP Notfn. Dt.05.10.17, the Govt. of India, Ministry of Finance, Deptt. Of Revenue has also issued circular No.1060/9/2017-CX dt. 27.11.17 which further lays down the procedure for manual di....
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....o be given the benefit that it exhorts to be bestowed under the auspices of the Scheme of 2017. It is clearly mentioned in the impugned order dated 28th August 2018 that petitioner-unit, working under and in terms of Notification of 2002, being Notification no.56/2002, was entitled to the benefits percolating in terms thereof, however, till 9th February 2017. And insofar as benefits as available under and in terms of Notification/Scheme of 2017 are concerned, petitioner-unit is not entitled to any benefit thereunder as petitioner-unit was not availing any benefit immediately before and/or on 1st day of July 2017. Not only this, petitioner-unit has been unambiguously shown to have commenced its commercial production as on 25th September 2017 and,as such, petitioner-unit is not squarely qualified and covered to have had the benefits as are emanating from the Notification/Scheme of 2017. In short, impugned order dated 28th August 2018 is self-explanatory. 10.2. The imperative figures and facets of the matter as adumbrated in impugned order dated 28th August 2018, questioned by petitioner-unit on the assertion of being wrong and incorrect, brought to surface by respondents cannot be....
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....stinction between a charging provision in a fiscal status and an exemption notification. [Vide: Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar v. Commissioner of Central Excise and Service Tax, Alwar, (2022) 5 SCC 62; Commissioner of Customs, Bangalore v. GE B Ltd and another, (2016) 15 SCC 733; Commissioner of Customs (Preventive) Mumbai v. M. Ambalal and Company, (2011) 2 SCC 74] 11. In Circular no.1060/9/2017-CX dated 27th November 2017, impugned herein, it is elucidated that in terms of the Central Excise regime as it existed prior to 1st July 2017, the units located in Jammu & Kashmir and other States were eligible to avail exemption from payment of Central Excise duty in terms of area-based exemption notifications and that while exemption was available to the units located in Jammu and Kashmir were required to pay Central Excise duty and avail exemption by way of refund of cash component of such duty paid, but under GST regime there is no such exemption and the existing units availing exemption from payment of Central Excise duty prior to 1st July 2017 are required to pay CGST and SGST/IGST like a normal unit and thus no exemption is available to these units by way of eithe....
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.... The withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decision for all times. 12.5. As has been held by the Supreme Court in Union of India v. V.V.F. Ltd, (2020) 20 SCC 57, that under the General Clauses Act an authority which has power to issue a notification has undoubted power to rescind or modify the notification in a like manner. It has been observed that withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest" and that it would be inequitable to hold the Government to the promise made by it and the court would not raise any equity in favour of promisee and enforce the promise against the government. Where public interest warrants, the principles of promissory estoppel cannot be invoked inasmuch as the government can change the policy in public interest. And it is also well settled that taking cue from the doctrine of promissory estoppel, the authority cannot be compelled to do someth....