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2015 (1) TMI 854 - HC - VAT and Sales TaxInput tax credit - Credit on residue Sunflower De-oiled Cake - Whether Section 17 which deals with partial rebate, of the Act is attracted to a case where by-product sold, falls within the category of 'exempted goods - Held that:- The entire raw material named as Sunflower Cake purchased is for the manufacture of Sunflower Oil. But, in the process, after the entire Sunflower Oil is extracted, de-oiled cake remains. The said de-oiled cake also has a value. He cannot keep that de-oiled cake in his premises as it could occupy a large space and no purpose would be served by keeping the same. Merely because the said de-oiled cake also has a value and he sells the same, there is no justification to deny the benefit of deduction to the assessee, because there is no direct nexus between the sunflower oil cake and the de-oiled cake. Sunflower oil cake was purchased for the purpose of extracting oil from the said cake and for the sale of the de oiled cake, the assessee has not put-up a separate unit. Therefore, it is not the case that assessee has put-up a separate industry for the purpose of manufacture of de-oiled cake and merely because the de-oiled cake has some value and it is sold, that would not take away the benefit conferred on the assessee by the statute. The assessee cannot be denied the benefit, taking into consideration the sale of de-oiled cake which is an exempted goods. In that view of the matter, the authorities have not properly appreciated the said statutory provisions. The Legislative intent is defeated in denying the benefit of input tax deduction relying on Sections-11(a)(1) r/w. Section-17 of the Act. The impugned order is unsustainable - assessee is entitled to the benefit of Full Input Tax Deduction - Decided in favour of assessee.
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