Page 136 - GSTL_23rd April 2020_Vol 35_Part 4

462 GST LAW TIMES [ Vol. 35
7. (b) Any activity or transaction in connection with or incidental or ancil-
lary to sub-clause (a)
…………..
…………..
8. Basis the above, it is humbly submitted that the Appellate Authority
ought to have appreciated the fact that coal is an input used in the manufacture
of power, which inter alia is used for manufacture of steel. Further, the definition
of ‘inputs’ is very wide under the GST regime. The Appellant reiterates its sub-
missions made before the Appellate Authority dated 22-6-2018 where extracts of
the Memorandum of Association of JSL were made available. The relevant ex-
tracts of the same are reproduced as under :
B. THE OBJECTS INCIDENTAL OR ANCILLARY TO THE
ATTAINMENT OF THE MAIN OBJECTS :
3. To carry on the business of mechanical engineers and to design,
construct, fabricate and manufacture all kinds of machines, tools
and implements, iron and brass founders, metal workers, machin-
ists, iron and steel workers, smiths, metallurgist, producers of electric
energy, appliances: to carry out research and development for any activity
....
(Emphasis supplied)
9. This being the case, it is submitted that it is squarely clear that gener-
ation of power is one of the business activities of JSL (i.e. the Principal) and coal
used for such business qualifies as input. The Ld. Appellate Authority entirely
bypassed this and has distinguished the same claiming that coal would not quali-
fy as an input for the Principal. Even at the time of adopting the said rejection,
the Ld. Appellate Authority failed to appreciate that the ambit of the term ‘busi-
ness’, covers any trade, commerce, manufacture, profession, vocation, adventure
or any similar activity as well as activities which are incidental or ancillary to the
said activities. Thus, the activity of generation of power is clearly within the am-
bit of a business as per the Memorandum and accordingly coal would qualify as
an input.
10. Additionally, the Appellant reiterates that its power plant is a cap-
tive power plant of JSL. Thus, generation of power is an integral part of the busi-
ness activities of JSL and such power generated at the captive plant is used for
manufacture of steel. The coal required for generation of power thus qualifies as
input.
11. Basis the above, it is humbly submitted that the ground adopted by
the Ld. Appellate Authority on coal not being an input for JSL (i.e. the Principal)
is not tenable under the applicable GST legislations for reasons cited above.
12. In addition to the above submissions, the Appellant seeks reference
to Circular No. 79/53/2018-GST, dated 31-12-2018 issued by the Central Board of
Indirect Tax and Customs. Relevant portions of the paragraph 9(b) of the afore-
said circular are reproduced as under :
Issue : A registered person uses coal for the captive generation of electricity
which is further used for the manufacture of goods (say aluminium) which
are exported under Bond/Letter of Undertaking without payment of duty.
Refund claim is filed for accumulated input tax credit of compensation cess
paid on coal. Can the said refund claim be rejected on the ground that coal
is used for the generation of electricity which is an intermediate product
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