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GST - Refund, Inverted Duty Structure, Classification of Non-Woven Fabric and PPSB Bed Sheets – Appeal against ld. Single Bench remanding the classification matter to the Appellate Authority for de novo consideration – whether the reasoning given by the appellate authority in support of its conclusion that PPSB Bed Sheets have to be taxed at 12% is justified - HELD - the appellate authority has misread the second note in Chapter 63 and has used the word “that articles made of Chapter 56 to 62”. By wrong substitution of the word “that” which is not contained in the chapter note, the appellate authority has arrived at a finding that the bed sheets in question have to be taxed at 12%. The authority failed to note that the word “made is not found in sub-para 2 of the notes under Chapter 63” - It is settled legal principle that the authorities nor the court can add words or substitute words in a statute and it has to be read as such and the plain meaning should be gathered from the statute. This error has led to a wrong finding that the bed sheets in question have to be taxed at 12% instead of 5% - Further, the identical issue where the appellant/assessee arose during the VAT regime as well as under the provisions of Central Excise Act and the findings were in favour of the appellant and the same attained finality. Now at this distance of time, after the advent of GST regime the Department was precluded from raising the identical issue that too while processing of refund claim application - the "PPSB Bed Sheets" would be classifiable under Chapter 63. Once the ld. Single Bench found the legal position is wholly in favour of the appellant, the necessity to remand the matter for fresh consideration would not arise - The order passed by the learned Single Bench to the extent remanding the matter to the appellate authority to reassess the facts is set aside and the writ petition is allowed - Validity of raising classification issue in a refund application – HELD - the classification issue has been raised by the Dept for the first time in a refund application filed by the appellant. The authority considering the refund application is not expected to make a roving enquiry into the classification of the product which should be done at the assessment stage and not at the stage of refund - Classification of "Non-Woven Fabric" – HELD - On the issue of classification of "Non-Woven Fabric" the Appellate Authority has agreed with the appellant's submissions and held that the "Non-Woven Fabric" is rightly classifiable under Chapter 56 under HSN and 75603 and liable to GST at 12% instead of 18%. As this finding has attained finality as the revenue did not challenge the same, the High Court did not examine this issue further.
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