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2017 (6) TMI 90 - HC - VAT and Sales TaxInput Tax credit - capital investment made by the Dealer in respect of Dry Dock and Fit Out Berth more particularly on purchase of cement, steel, greet etc. used in construction of Dry Dock and Fit Out Berth, which were used as capital goods - the main issue of this appeal is Whether the Hon’ble Tribunal has erred in holding that Input Tax Credit u/s.11(3)(a)(vii) of the Gujarat Value Added Tax Act, 2003 is available for purchase of cement, sand, steel, greet, concrete etc. that are used for manufacture of capital goods? Whether in the present case Dry Dock and Fit Out Berth shall be categorized as “capital goods” under the VAT Act or not? - Held that: - relying in the case of Scientific Engineering House (P) Ltd. [1985 (11) TMI 1 - SUPREME Court] it is held that the definition of the “Capital Goods” contained in section 2(5) of the VAT Act, Dry Dock and Fit Out Berth which are necessary for the purpose of business of the Dealer, the same are to be treated and held as “plant” - the issue is held in favor of the Dealer and against the Revenue and it is held that Dry Dock and Fit Out Berth are plant / capital goods. Whether on the purchase of cement, sand, steel, greet, concrete etc. that are used for manufacturing of capital goods viz. Dry Dock and Fit Out Berth, the Dealer is entitled to Input Tax Credit or not? - Held that: - as cement, sand, steel, greet, concrete etc. are required to be used in manufacturing of “Capital Goods” viz. Dry Dock and Fit Out Berth, which is an integral part of the final product of the Dealer are without the Dry Dock and Fit Out Berth, it is not possible for the Dealer to carry on his business which is of ship building / manufacture and repairs of ship and that the Dry Dock and Fit Out Berth are specialized in nature which are required to be constructed specially and specifically for the purpose of business of the Dealer i.e. ship building / manufacture and repairs of ship, applying the “User Test” it is to be held that on purchase of cement, sand, steel, greet, concrete etc. which are used in Dry Dock and Fit Out Berth (Capital Goods), Dealer shall be entitled to Input Tax Credit - answered in favor of assessee. Appeal dismissed - decided in favor of assessee.
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