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2024 (6) TMI 896
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....ics and PPSB Bed Sheet under the chapter headings 5603 and 6304 of the Customs Tariff Act, 1975 respectively. 3. The Petitioner engages in the production of non-woven fabric utilizing Polypropylene Granules (referred to hereinafter as "PP Granules") through the application of Spun Bond technology. The Spun Bond process, a method employed in non-woven fabrication, involves the transformation of PP Granules into continuous filaments, which are subsequently deposited and fused together to yield non-woven fabric. 4. The aforesaid process of manufacture of polypropylene non-woven fabric and the PPSB Bed Sheet was also verified by the State Tax Officers, Bureau of Investigation, Govt. of West Bengal, during their visit to the petitioner's factory on 14.02.2019. A copy of the report of the said visit was also prepared under the seal of State Tax Officer, Bureau of Investigation, Govt. of West Bengal. 5. The petitioner supplies the Polypropylene non-woven fabric on payment of GST @ 12% (6% CGST+ 6% SGST) as per SL. No. 135 of Schedule II of Notification No. 01/2017-CT (Rate) dated 28.06.2017. 6. With regard to supply of the PPSB Bed Sheet so manufactured, in the pre-GST regime,....
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.... an inverted tax structure, wherein the GST rate on input supplies exceeds that payable for outward supplies. The refund of Input Tax Credit for a tax period necessitated the submission of Form GST RFD-01A as per Rule 89 of the CGST Rules. Consequently, on 23.02.2019, the Petitioner applied for an online refund by filing Form GST RFD-01A for the accumulated tax credit amounting to Rs. 39,61,030/- attributable to the inverted tax structure for the month of July 2017. Subsequent refund applications were lodged by the Petitioner using Form GST RFD-01A for the subsequent months. 11. On 05.03.2019, the Petitioner submitted physical copies of Form GST RFD-01A, initially filed online on 23.02.2019, alongside pertinent documents including Refund ARN Receipt, GSTR-1, GSTR-3B and GSTR-2A returns for July 2017. Also provided were the Statement of Sales and Purchase for July 2017, Xerox copies of Sale and Purchase invoices and a declaration under Sections 16 (2) (c) and 42 (2) of the CGST Act, 2017. Acknowledgment of the submission of Form GST RFD-01A was received through the issuance of Form GST RFD-02, with Acknowledgement ARN No. AA1907170033944 dated 23.02.2019. The State Government acc....
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....16. Pursuant to Section 112 of the CGST Act, recourse to appeal against the order dated 31.10.2019 was directed to the Goods and Service Tax Appellate Tribunal as established under Section 109 of the CGST Act. Regrettably, the absence of such a tribunal and the invalidation of Sections 109 (3) and 109 (4) by the Hon'ble Madras High Court in the case of Revenue Bar Association v. Union of India reported in 2019 SCC OnLine Mad 8910, left the Petitioner devoid of an efficacious recourse. Thus, being aggrieved by the said impugned order the present petition has been preferred. 17. The Learned Counsel representing the petitioner has advanced the following arguments: I. The issuance of the Show Cause Notices contravened fundamental principles of procedural fairness, as they lacked specificity by failing to provide any rationale for questioning the petitioner's classification or suggesting any alternative classification. Consequently, solely due to the ambiguity within the Show Cause Notices, the contested orders, insofar as they detrimentally affect the petitioner, are subject to being invalidated. II. The respondent No. 5 hastily decided without providing th....
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....ing that Chapter 63 encompasses items from Chapters 56 to 62, as substantiated by Chapter Note 1 and Heading 6304. Section note 7(b) to Section IX elucidates the definition of "made up," endorsing PPSB bed-sheets as meeting such criteria. Consequently, they are correctly classified under Chapter 6304. The Counsel for the petitioner has further placed reliance on the Supreme Court's decision in the matter of CCE, Meerut v. Kapri International (P) Ltd. reported in 2002 (142) ELT 10 (SC), wherein it was held that by cutting of the cotton fabrics in running lengths into small pieces a new marketable commodity like bed sheet, bed spreads, table cloths and napkins etc. come into existence, having a distinct name, character and use. Thus, 'bed sheets' ought to be regarded as distinct 'made up' textile articles, distinct from the fabric from which they are crafted. It has been further submitted that Polypropylene Non-Woven Fabrics are textile materials and are not plastics or plastic articles to be clarified under Chapter 39 in terms of Note 1 (H) of Section XI of the Customs Tariff Manual. VI. Various judicial precedents have emphasized the relevance of the Co....
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....etitioner is entitled to the refund along with accrued interest. IX. With regards to the refunds already sanctioned for non-woven fabric and partially for PPSB Bedsheets, statutory interest under Section 56 is due, as each refund was disbursed after the prescribed sixty-day period. Nonetheless, the department has failed to remit the interest owed to the petitioner. Hence, the petitioner is entitled to interest on the sanctioned refunds as well. The petitioner relies on the precedent set forth by the Hon'ble Supreme Court in Ranbaxy Laboratories Ltd. v. UOI, 2011 (273) E.L.T. 3 (S.C.). X. The petitioner asserts that it consistently filed tax returns and remitted taxes, specifying the classification of PPSB Bedsheets under tariff heading 6304. Importantly, the department has not contested these returns to date. It is highlighted that the dispute regarding the product's classification arose solely upon the filing of refund claims. The petitioner submits that once the classification adopted in the returns is accepted by the department, it cannot be contested during the processing of refund applications. In support of this contention, reference is made to the d....
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....ly predicated upon the Tariff Code as stipulated in the first schedule to The Customs Tariff Act, 1975, inclusive of its associated Schedules and Section Notes, pursuant to notification number 1125 F.T dated 28.06.2017. Consequently, a substantial alteration in factual circumstances is evident. IV. Furthermore, it has been contended that the pertinent jurisdictional authority duly considered the comprehensive submissions of the petitioner and addressed the raised objections appropriately. Subsequent to due consideration and mindfulness of the nature of the final product, various pronouncements issued by the West Bengal Authority on Advanced Ruling, the West Bengal Appellate Authority in Advanced Ruling and judicial precedents rendered by diverse courts, a final order was issued, incorporating the effective determinations therein. Therefore, it is asserted that the orders were not issued in flagrant contravention of the principles of natural justice. Additionally, it is emphasized that the manufactured product of the petitioner is categorized as a textile article under Chapter 63, rather than as plastic under Chapter 39. V. The order pertaining to the PPSB bed-shee....
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....respondent authorities to substantiate their claims regarding the taxable nature of a particular case or item. Mere assertions in this regard hold no weight. Thus, this Court has maintained that there must be tangible evidence to support the appropriate findings, which may be presented either orally or through documentation. It is the responsibility of the taxing authority herein respondent no. 4 to furnish such evidence, even before the initial adjudicating authority. 20. Moreover, the respondent authority neglected to recognize that the aforementioned PPSB Bed Sheets essentially represent a processed manifestation of the referenced non-woven fabrics. These fabrics undergo cutting into desired configurations followed by subsequent finishing processes, thereby transforming them into 'made-up' textile articles. Consequently, the failure to acknowledge this crucial aspect further underscores the inadequacy of the respondent's determination. In light of these considerations, this Court concludes that the respondent's decision lacks sufficient evidentiary support and proper consideration of pertinent factual and legal principles, necessitating a reassessment of the m....