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State of Andhra Pradesh Versus Bharat Dynamics Limited

2015 (12) TMI 1135 - ANDHRA PRADESH HIGH COURT

Misuse of C-Forms / D-Forms - disputed turnover relating to the manufacture and supply of missiles is sale or job work - majority of the bulk of material was purchased by the respondent by issuance of C-Forms and D-Forms and which material was got incorporated in the final product which were sold to Government of India and also the foreign buyer.

Held that:- Applying the ratio laid down by this Court in Bharat Dynamics Limited (1 supra) and in the absence of any material to come to a .....

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e may also further add that the fact that ERDL, Pune, had issued D-Form for procuring material would go to show that they are eligible and entitled to issue such D-Forms and the D-Forms are validly issued. In that view of the matter, allowing the respondent to avail the concessional rate of duty, as applicable to the transaction, is unassailable.

We are also not persuaded by the argument of the learned counsel for the Department that on account of the alleged misuse of C-Forms, we ha .....

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- Decided against Revenue. - Tax Revision Case No. 87 of 2002 - Dated:- 28-7-2015 - G. Chandraiah And Challa Kodanda Ram, JJ. For the Petitioner : Mr. Vivek Reddy, Special Government Pleader For the Respondent : Mr. S. Dwarakanath ORDER ( Per Hon ble Sri Justice G. Chandraiah ) This tax revision, under Section 22(1) of the A.P.GST Act, is filed by the State against the orders of the Sales Tax Appellate Tribunal in T.A.No.640/97, dated 31.12.2001, raising two questions of law said to be arising f .....

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present case is squarely covered by the judgment of the Division Bench of this Court in the assessees own case i.e., State of Andhra Pradesh v. Bharat Dynamics Limited [1997] 106 STC 158 (AP) for the Assessment Years 1971-72 to 1977-78, and the Tribunal had followed the said judgment and as such there is no question of law to be decided and answered. However, Mr. Vivek Reddy, learned Special Government Pleader appearing on behalf of the State, submits that there is a distinction which has been i .....

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as purchased by the respondent by issuance of C-Forms and D-Forms and which material was got incorporated in the final product which were sold to Government of India and also the foreign buyer. The earlier judgment of this Court was rendered on the finding that the entire material was purchased for and on behalf of the Government of India and, as a matter of fact, it was only a job work; whereas, in the present case, the very fact that a bulk of material was purchased by the Assessee by issuance .....

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r sale or for re-sale is a clear indicator that the dealer obtained C-Forms for procuring material to be incorporated in the missiles which are to be sold. If it is to be contended that there are no sales and it is only for the purpose of executing the work contracts these bulk of materials were procured by utilizing C- Forms, the very utilization of C-Forms would amount to misuse and mis-utilisation of C-Forms, which is impermissible in law. It is also further contended that the respondent is b .....

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rned counsel points out that the Tribunal had erred in allowing concessional rate of tax, notwithstanding the finding of the Assessing Officer that ERDL, Pune, was not eligible to utilize D-Forms. Learned counsel while submitting that the eligibility to get D-Form is only to an organization which is in trade and in that view of the matter the very fact that ERDL, Pune, is ineligible to get D-Forms would indicate that it is either a Corporation or an entity satisfying the conditions of a dealer; .....

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erring to various aspects which have been discussed by the Tribunal, the learned counsel prays for dismissal of the revision. 4. We have considered the rival submissions and perused the record. 5. At the outset, we may state that the scope of consideration of a tax revision case by the High Court, in exercise of powers under Section 22 of the A.P.GST Act as applicable to CST transactions, is limited to the consideration of questions of law that arise from the orders of the Tribunal. The Tribunal .....

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d for the purpose of consideration of questions of law. This aspect of the matter is well settled by the judgment of the Hon ble Supreme Court in Sudarshan Silks & Sarees v. Commissioner of Income Tax, Karnataka (2008) 12 SCC 458. 6. Keeping in view the parameters laid down by the Hon ble Supreme Court, we may examine the facts as found by the Tribunal. The Tribunal had elaborately considered every aspect of the matter and dealt with the issues. The Tribunal posed the following two questions .....

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dia has entered into an agreement with a French entity for manufacture of certain guided missile systems and the necessary technology and support is being provided by the French entity. The said agreement is assigned in favour of the respondent. As a matter of fact, the entire of the manufacturing is done as per the instructions and to meet the requirements of Government of India and, at all times, entire of the raw material etc., are procured and held in trust, for and on behalf of the Governme .....

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e component over the years. Considering the fact that the as per the basic agreement which was entered into between 1971 and 1972, it is natural that the local manufacturing abilities have been improved and efforts were made to absorb the technology so as to reduce the outflow of foreign exchange. For the relevant year, the Tribunal adverted to this aspect and, as a matter of fact, the Tribunal appears to have accepted the contention that the local purchase was only about 7% and 1% in two of the .....

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he material or of the product and thus came to a conclusion that procurement of certain parts of the material indigenously does not make any difference. 8. We had referred to the questions of law which have been raised above which does not indicate any question of law having been raised disputing these facts as found by the Tribunal. 9. In the facts of the present case, applying the ratio laid down by this Court in Bharat Dynamics Limited (1 supra) and in the absence of any material to come to a .....

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