M/s Neutech Solar Systems Pvt. Ltd. (“the Appellant”), is a private limited company focusing on providing energy solutions by using concentrated technology which had applied to the Karnataka AAR on the following question:
“Whether Evacuated/Vacuum Tube Collectors (ETC/VTC) fall under Chapter 84 of HSN which is covered in S. No 234 of Schedule-1 under Notification 01/2017 – IGST(Rate) dated June 28, 2017?”
The AAR passed an order wherein it opined that ETC/VTC merits to be apart of solar water heater systems under chapter heading 8419 and held that the product is not entitled to a concessional rate of 5% since it does not generate electricity at any stage and hence cannot be construed as either solar power-based device or part thereof.
The above order was passed on December 31, 2018, which was received by the Appellant on January 4, 2019. On receipt of the ruling, the Appellant communicated with various authorities to obtain their views on the matter viz. Solar Thermal Federation of India, Customs Authority, Ministry of New & Renewable Energy, Gold Standard Foundation, etc.
Upon getting the confirmation from these authorities that solar water heater systems are renewable energy devices and eligible for concessional rate of tax, the Appellant filed an appeal against the order of AAR to AAAR on May 29, 2019. Being delayed in filing appeal, the Appellant sought for a condonation on the ground that the ruling of the AAR is causing a commercial strain on their business.
Whether the AAAR can take up appeals for hearing after the expiry of the total limitation period for filing appeal (30 + 30 days)?
The Hon’ble Karnataka AAAR passing an order vide Order No. KAR/AAAR/03/2019-20 dated August 16, 2019, while denying condonation for the delay, observed as under:
- Plain reading of Section 100 of the CGST Act, 2017 (“CGST Act”) mandates than an appeal should be filed within 30 days from the date of communication of AAR order. Appellate Authority is empowered to allow the appeal to be presented within a further period of 30 days if it is satisfied that the appellant was prevented by sufficient cause.
- Thus, the Appellate Authority is empowered to extend the period for filing an appeal for a further period of 30 days only and not more than that.
- Highlighting the words “not exceeding thirty days”, contained in the proviso to sub-section (2) of Section 100 of CGST Act, the HC opines that allowing the appeal filed after 145 days from date of order viz. beyond the extended period would render the said phrase wholly otiose.
- Reliance was placed on the cases of Singh Enterprises vs CCE [(2008) 3 SCC 70] and Consolidated Engineering Enterprises vs Principal Secretary, Irrigation Department and Others [(2008) 7 SCC 169] as well as Commissioner of Customs and Central Excise vs Hongo India (P) Ltd [(2009) 5 SCC 791] to state that Appellate Authority is a creature of statue is empowered to condone a delay of only a period of 30 days after the expiry of the initial period for filing appeal.
Conclusively, the Hon’ble AAAR held that since the appeal cannot be allowed to be presented on account of time limitation, the question of discussing the merits of the main issue in the appeal which is the eligibility to concessional rate of GST on the product Evacuated Tube Collector, does not arise.