Page 137 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : JSW ENERGY LIMITED 463
and not the final product which is exported and since electricity is exempt
from GST, the ITC of the tax paid on coal for generation of electricity is not
available?
13. Clarification : There is no distinction between intermediate goods or
services and final goods or services under GST. Inputs have been clearly defined to
include any goods other than capital goods used or intended to be used by a supplier in
the course or furtherance of business. Since coal is an input used in the production of
aluminum, albeit indirectly through the captive generation of electricity, which is di-
rectly connected with the business of the registered person, input tax credit in
relation to the same cannot be denied.
(Emphasis Supplied)
14. The Appellant humbly submits that the transaction in question is
squarely covered by the aforesaid example. As explained, the output i.e. alumin-
ium is similar to steel and has a similar manufacturing process. Inputs (such as
coal) are used for the manufacture of power, which is used for the manufacture
of steel. Therefore, it would be incorrect to conclude that only those inputs which
are directly consumed in the manufacturing process would qualify as inputs un-
der the CGST Act. Contrary to the same, it has been clarified that as long as the
subject inputs are used/intended to be used for the assessee’s business and there
are no specific restrictions under the GST legislation, the same would qualify as
eligible inputs for the purpose of availment of credit under the said legislation.
15. Without prejudice to the above, the Appellant humbly submits that
JSL has been regularly importing coal as an input, for the process of generation
of power, which is used in the manufacture of steel. JSL has been availing credit
of eligible duties and taxes under pre- GST as well as under GST regime. Eligibil-
ity of credit was under examination by the concerned tax authorities on the said
imports based on the applicable provisions under Rule 3 of the Cenvat Credit
Rules, 2004. In the said context, reference is sought to the order issued by Com-
missioner of Central Excise and Customs - Belgum (010-No.
BEL/EXCUS/000/COM/B.HR/ 005/13-14/CX, dated 30-6-2014), which allowed
JSL Cenvat Credit of the Countervailing Duty paid on the import of steam coal.
The relevant portion of paragraph 25 is quoted as follows :
As the arguments and the contentions of the assessee found to be more ap-
propriate and as such, I found no merits in the stand taken by the depart-
ment to deny Cenvat credit of 1%/2% CVD paid by the assessee on the im-
ported steam coal. Hence, I incline to allow the Cenvat credit of Rs.
5,14,84,164/- and Rs. 9,56,57,260/- availed during April, 2012 to February,
2013 and March, 2013 to September, 2013 respectively.
16. To the above, the Appellant seeks to point out that in the above re-
ferred matter, the Ld. Commissioner of Central Excise and Customs - Belgaum,
took cognizance of the fact that steam coal was an input for JSL and accordingly
allowed credit of the same. Further, no appeal has been filed by the Department
against the aforesaid order thus it is clear that coal is always considered as an
input for steel. To this, it is humbly submitted that if coal is not to be considered
as an input then an anomaly is being created for the Principal whereby eligibility
of inputs based on activities carried out on their own account (in the State of
Karnataka) are being treated differently as compared to a Job Work activity
(proposed in the State of Maharashtra). The Appellant humbly submits that the
matter referred under the present appeal is governed under the GST legislations
applicable to the State of Maharashtra and the same are identical to the GST leg-
GST LAW TIMES  23rd April 2020  257