RSPL LTD VS Union Of India

Petitioner sought a declaration regarding the respondents’ refusal to grant credit. The petitioner claimed that the respondents’ action was unjustified and sought legal clarification on the matter. They likely argued that they met all necessary requirements for credit but were denied without cause. This dispute could involve financial matters, contractual obligations, or regulatory compliance. The petitioner sought resolution through the legal system to rectify what they perceived as an unfair denial of credit.

The petitioner in this case has requested a declaration that the respondents’ refusal to allow credit for excise duty paid on capital goods in transit as of July 1, 2017, violates Articles 14 and 19(1)(g) of the Constitution of India. Additionally, the petitioner seeks a directive for the respondents to permit such credit.

The petitioner, a company registered under the Companies Act, is primarily involved in the manufacturing and sale of various consumer goods, operating a Soda Ash manufacturing unit in Gujarat. To facilitate its manufacturing activities, the petitioner procures both raw materials and capital goods.

The dispute stems from the transition between the statutory provisions preceding March 1, 2017, and those introduced on July 1, 2017, with the implementation of GST statutes. Prior to July 1, 2017, manufacturers were entitled to… [content cutoff].

The petitioner in this case is seeking a declaration that the respondents’ refusal to allow credit for excise duty paid on capital goods in transit as of July 1, 2017, violates Articles 14 and 19(1)(g) of the Constitution of India. The petitioner’s main request is for the respondents to be directed to permit such credit.

The petitioner, a company registered under the Companies Act, is involved in manufacturing and selling various consumer goods, operating a Soda Ash manufacturing unit in Gujarat. In its manufacturing processes, the petitioner acquires both raw materials and capital goods.

The challenge presented by the petitioner stems from the statutory provisions existing before March 1, 2017, when the GST (Goods and Services Tax) statutes came into effect, and those introduced thereafter, particularly from July 1, 2017, under the GST statutes regarding the credit on excise duty paid on inputs and capital goods. Prior to July 1, 2017, a manufacturer was entitled to take CENVAT (Central Value Added Tax) credit for duty paid on inputs and capital goods used in the manufacturing process, subject to conditions outlined in the CENVAT Credit Rules, 2004. With the introduction of the Integrated Goods and Services Tax Act (IGST Act) and Gujarat Goods and Services Tax Act (GGST Act) on July 1, 2017, the facility for manufacturers to claim credit for duties paid on inputs and capital goods continued with certain modifications.

The CGST (Central Goods and Services Tax) Act also includes transitional provisions allowing unutilized CENVAT credit to be carried over to the GST regime, applicable to both inputs and capital goods. The statute further provides provisions for the assessee to claim credit for duty paid on inputs in transit as of July 1, 2017. However, there is no provision enabling the assessee to claim credit for the excise duty paid on capital goods in transit and received on or after July 1, 2017. This discrepancy forms the basis of the petitioner’s grievance.

Petitioner, a company engaged in manufacturing consumer goods, filed a petition seeking a declaration that the respondents’ refusal to allow credit for excise duty paid on capital goods in transit as of July 1, 2017, violates Articles 14 and 19(1)(g) of the Constitution of India. The petitioner also seeks a direction for the respondents to permit such credit.

The background leading to this challenge involves the petitioner’s manufacturing unit of Soda Ash in Gujarat, where it procures raw materials and capital goods for manufacturing activities. Before the implementation of GST statutes on March 1, 2017, manufacturers were entitled to CENVAT credit of duty paid on inputs and capital goods subject to certain conditions under the CENVAT Credit Rules, 2004. With the introduction of the Integrated Goods and Service Tax Act (IGST Act) and Gujarat Goods and Service Tax Act (GGST Act) on July 1, 2017, similar provisions allowing credit on duties paid continued with modifications. The CGST Act contains transitional provisions enabling the migration of unutilized CENVAT credit to the GST regime for both inputs and capital goods. However, while provisions exist for claiming credit of duty paid on inputs in transit as of July 1, 2017, there is no provision for claiming credit of excise duty paid on capital goods in transit received after that date, leading to the petitioner’s grievance.

The petitioner’s counsel pointed out Section 140 of the CGST Act, particularly subsection (5), which allows registered persons to take credit of eligible duties and taxes for inputs or input services received after the appointed day if the duty or tax has been paid by the supplier under the existing law. However, this provision excludes capital goods purchased before July 1, 2017, but received after that date from availing the benefit of excise duty paid on such capital goods. The petitioner contends that Section 140 is a transitional provision and does not adequately address the issue.

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