TaxTMI 
TaxTMI 
2024 (12) TMI 873
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of India and Others] and Writ Petition (C) No.27 of 2022 [Alkem Laboratories Limited vs. Union of India and Others], vide a common judgment, dated 12-09-2023, are being called into question in these appeals, being Writ Appeal No.09 of 2023 [Zydus Wellness Products Limited vs. Union of India and Others] and Writ Appeal No.10 of 2023 [Alkem Laboratories Limited vs. Union of India and Others]. The appeals are being disposed of by this common judgment. 2. To comprehend the matter in its proper perspective, it is imperative to briefly consider the genesis of the dispute. The appellant, in Writ Appeal No.09 of 2023, incorporated under the Companies Act, 2013, on 23-04-2010, is engaged in the manufacture and sale of pharmaceuticals, cosmetics, food and beverages, falling under Chapters 21 and 33 of the GST Tariff of India. It has two manufacturing Units, both located in Namchi, Sikkim. The appellant in Writ Appeal No.10 of 2023 has five manufacturing Units, all located in Namthang, Sikkim and are engaged in manufacturing medicaments and food, falling under Chapters 30 and 21 of the GST Tariff of India. 3. The respondent no.1, the Department of Revenue, Ministry of Finance, issue....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Unit-I and Unit-II, before the respondent no.3, which till date have not been granted. (iv) The petitioner filed claim applications under the BSS for the period upto December, 2021 manually and as a matter of precaution after the allocation of UIDs, online as well, on the ACES-GST portal. The claim applications as detailed in the writ petition for Unit-I and Unit-II are still pending approval, except upto the period December, 2018, for which the budgetary reimbursement was allowed. 4. In the case of Alkem Laboratories Limited, reliance was placed on the same notifications supra. On 28-08-2019, Cachet Pharmaceutical Private Limited was acquired by the petitioner by way of slump sale. The said Unit under the notification of 2007, was entitled to exemption for a period of ten years, from the date of commercial production, i.e., upto 09-03-2027. On notification of the BSS on 05-10-2017, a new UID was allotted to the petitioner. On 05-12-2019, after the acquisition, the petitioner filed an application before the respondents no.3 and 4 seeking issuance of fresh UID for Unit-V, under the new GSTIN registration, this was denied, consequently, the petitioner could not file onli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Limited were all 'persons' as defined in section 2(84) of the CGST Act. The Court observed and concluded as follows; "38. Under the CGST Act, 2017, it is the 'person' as defined under section 2(84) who is liable to the tax thereunder. Consequently, the Budgetary Support Scheme which is limited to the tax which accrues to the Central Government under the CGST Act, 2017 and IGST Act, 2017 is liable to be paid by the 'person'. Reading the definition of 'person' under section 2(84) and the requirement of registration under section 22 of such 'persons' makes it clear that Zydus Nutritions Limited (later Zydus Wellness Products Limited) and Alkem Laboratories Limited were required to be registered under section 22 after the change in ownership. Accordingly and admittedly, Zydus Nutritions Limited was registered under Rule 10(1) on 26.03.2019 and Alkem Laboratories Limited on 3.10.2019. Consequently, both the petitioners who were separate and distinct legal entities from the previous 'persons', i.e., Zydus Wellness-Sikkim and Cachet Pharmaceuticals Private Limited, who were eligible under exemption notification 20/2007-CE could not have filed the application for budgetary support....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncerned State or Central Government. Inviting the attention of this Court to paragraphs 4.1, 4.2, 4.3 and 5.3 of the BSS, it was emphasised that, the overall BSS was to be valid upto 30-06-2027 as provided in paragraph 5.3 of the BSS. That, in the assailed judgment reference was made to paragraphs 5.7, 7.1 and 7.2 of the said BSS, which are in fact procedural provisions for payments of the budgetary support and the word 'manufacturer' in paragraphs 5.7 and 7.1 of the BSS means the "eligible Unit". That, paragraphs 5.9.1, 8.1, 8.2, 8.5, 9.1, 9.3 and 9.5 of the BSS clarify this aspect. Thus, a person having a different GST registration is a mere matter of procedure and has no bearing to the eligibility for budgetary support when the 'Unit' remains in the same location, the specified goods manufactured remain the same as also the date of commencement of commercial production. The learned Single Judge was of the view that the manufacturer must be a person and in case of change of ownership or expansion, the person (transferee) claiming budgetary support, becomes different from the person, who made the investment to set up the Unit. It was observed that a GST registered person, who is d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Limited, assumed different legal entities from their previous ones, rendering them ineligible for budgetary support, it is imperative to first navigate the contents of the notification no.20/2007-CE, dated 25-04-2007, which was rescinded vide notification no.21/2017-CE, dated 18-07-2017. The relevant paragraph of the notification provides as follows; ".............................................................. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) other than those mentioned in the Annexure and cleared from a unit located in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim, as the case may be, from so much of the duty of excise leviable thereon under the said Act as is equivalent to the duty payable on value addition undertaken in the manufacture of the said goods by the said unit. ..........................................
X X X X Extracts X X X X
X X X X Extracts X X X X
....er different Industrial Promotion Schemes of the Government of India, for a residual period for which each of the units is eligible, a new scheme is being introduced. 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 has otherwise no relation to the erstwhile schemes. 1.2 Units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance, as listed under para 2 below would be considered eligible under this scheme. All such notifications have ceased to apply w.e.f. 01.07.2017 and stands rescinded on 18.07.2017 vide notification no. 21/2017 dated 18.07.2017. The scheme shall be limited to the tax which accrues to the Central Government under Central Goods and Service Act, 2017 and Integrated Goods and Services Act, 2017, after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution. 2. The erstwhile Schemes which were in operation on 18.07.2017 were as follows: .........................
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom: (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 no. 49/2003-CE dated 10.06.2003 and 50/2003-CE dated 10.06.2003 were being cleared. 4.3 '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 paragraph 2, during which the eligible unit would have been eligible to avail exemption for the specified goods. The documentary evidence regarding the date of commercial production shall be submitted in terms of para 5.7. ..................................................................." [emphasis supplied] The notification thus clarifies that the BSS is a measure of goodwill, only for the Units which were eligible for drawing benefits under the earlier excise duty exemption. It was emphasised that it otherwise had no relation to the erstwhile schemes. The notification further provided that such benefit would be provided ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....again be examined by providing an exception clause for such units so as to avoid any misuse. (Action: CBIC) ........................................................" [emphasis supplied] Insertion of such an exception clause subsequently, to deny the eligible Unit from the benefit of the BSS has not been brought to the notice of this Court by the respondents, presumably as no such insertion materialised. 17. Paragraph 1.2 of the BSS, dated 05-10-2017, provides as follows; "1.2 Units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance, as listed under para 2 below would be considered eligible under this scheme. All such notifications have ceased to apply w.e.f. 01.07.2017 and stands rescinded on 18.07.2017 vide notification no. 21/2017 dated 18.07.2017. The scheme shall be limited to the tax which accrues to the Central Government under Central Goods and Service Act, 2017 and Integrated Goods and Services Act, 2017, after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution." [emphasis supplied] ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, gets validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji [Commr. of Police v. Gordhandas Bhanji, 1951 SCC 1088] : (SCC p. 1095, para 9) '9. ... public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.' Orders are not like old wine becoming better as they grow older." (iii) Reading more into the definition of "eligible Unit" by the learned Single Judge and interpreting it to mean that change in the person filing the claims would no longer qualify the manufacturers as eligible Units, appears to be a misrea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of proposals sent by your office vide OM F.No.10(1)/2017(Vol.II)-GSTSS dated 18.11.2019. The proposal on issue of eligibility of the units that are already availing benefit of the Scheme in the event of their undergoing an expansion, relocation and change of ownership was not found possible to be agreed (Point no.5 of DPIIT's O.M. dated 18.11.2019) and the same was also communicated vide this office aforesaid OM dated 19.02.2021. The action/decision taken by the DPIIT on the same has not yet been communicated to this office. However, the DPIIT vide OM F.No. 10/1/2021-GSTSS dated 20.10.2021 in the matter of eligibility of M/s. Pritika Autocast Ltd. following amalgamation with M/s. Pritika Auto Industries Ltd. has decided that "after due examination and discussion with CBIC and as per the Scheme guidelines, if any unit undergoes for relocation, expansion and change of ownership, is not eligible under the Scheme of Budgetary Support". 3. Since, the Scheme of Budgetary Support is introduced by the Department of Industrial Policy & Promotion, therefore, DPIIT is also requested take a call on the subject issue of change of constitution/ ownership in respect of the following un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or obtaining UID under the BSS, was forwarded to its Delhi Office, for examining and resolving the matter as per applicable provisions. The matter appears to have remained unresolved. 23. Another letter dated 06-04-2022 of the CBIC addressed to the CGST & CX, Central Excise, Siliguri, West Bengal, dealt with the "Representation of the Budgetary Support Scheme - Issue of eligibility in case of expansion, relocation of the existing Unit or change of ownership/constitution - reg." wherein it was stated inter alia as follows; "................................................................................. 2. In this regard, I am directed to inform that the reply on the issue of M/s Cipla Ltd. has already been sent to your office vide this office letter of even no. dated 21.12.2021 (copy enclosed) 3. Further, the matter related to eligibility of unit under the Budgetary Support Scheme in case of expansion, relocation of existing unit or change of ownership/constitution was referred to DPIIT for clarification vide this office OM of even no. dated 03.03.2022 (copy enclosed). 4. In this regard, the DPIIT vide their OM F.No.10/1/2021-GSTSS dated 31.0....