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The Commissioner, Commercial Tax, U.P. Lucknow Versus M/s. Ambuja Cement Ltd., Saharanpur

2017 (4) TMI 1280 - ALLAHABAD HIGH COURT

Input Tax Credit - capital goods - M. S. Sheets utilized for construction of silo - UP VAT - case of Revenue is that since the nature of silo is immoveable, and is embedded to Earth, it cannot be included within the definition of ‘capital goods’ - Held that: - storage tank embedded in the earth also forms part of capital goods, if it is otherwise being utilized for manufacture of goods - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II Versus SLR STEELS LTD. [2012 (9) .....

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vision is by the revenue questioning an order passed by the Tribunal dated 16. 12. 2016, whereby the claim of input tax credit by the assessee, in respect of goods utilized for construction of silo, has been disallowed. Challenge is essentially based upon the definition of capital goods contained under Section 2(f) of the U. P. Value Added Tax Act, 2008. It is contended that capital goods are goods that are moveable in nature, and since silo is a storage tank embedded to earth, as such, it canno .....

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ot be proper to give a restrictive meaning to the term plant so as to treat it as movable property alone. I have heard Learned Standing Counsel for the applicant and Sri M. P. Devnath and Sri Nishant Mishra for the assessee. Section 2 (f) of U. P. VAT Act defines capital goods in following words:- 2. . . . . . . . . . (f) capital goods means any plant, machine, machinery, equipment, apparatus, tool, appliance or electrical installation used for manufacture or processing of any goods for sale by .....

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used in manufacture of goods for sale by him but for the purpose of section 13, does not include:- (i) air-conditioning units or air conditioners, refrigerators, air coolers, fans, and air circulators if not connected with manufacturing process; (ii) an automobile including commercial vehicles, and two or three wheelers, and parts, components and accessories for repair and maintenance thereof; (iii) goods purchased and accounted for in business but utilised for the purpose of providing facility .....

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e earth which, under the contract of sale, are agreed to be severed, but does not include actionable claims, stocks, shares or securities; A perusal of the definition of capital goods clearly goes to show that plant, machine, machinery, equipment apparatus and tools or appliances and electrical installation, which are used for manufacture or processing of any goods for sale by the dealer, would be included. The parties are not at issue on the factual proposition that goods used herein, are utili .....

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ision of Apex Court in Commissioner of Central Excise, Coimbatore and others Vs. Jawahar Mills Ltd. and Others, (2001) 6 SCC 274, which dealt with grant of MODVAT credit to capital goods under the Central Excise Act. The explanation 1 to Rule 57 (q) defines capital goods which is similar to the definition of capital goods in the U. P. VAT Act. The Apex Court has been pleased to observe as under in paragraph 4 and 6 of the judgement:- 4. The aforesaid definition of Capital goods is very wide. Cap .....

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r MODVAT Credit entitlement. Clause (c) makes moulds and dies, generating sets and weighbridges used in the factory of the manufacturers as capital goods and thus qualify for availing MODVAT credit. The goods enumerated in clause (c) need not be used for producing the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be .....

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of the liberal language of the provision, Mr. Rohtagi fairly and very rightly did not seriously dispute that if any of the items enumerated in Explanation (1)(a) is used for any purpose mentioned therein for the manufacture of final products, it would satisfy the test of Capital goods . The main contention of Mr. Rohtagi, however, is that the question whether an item falls within the definition of Capital goods would depend upon the user it is put to. The submission is that parts of the items in .....

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fy. We have no difficulty in accepting the contention of the learned Additional Solicitor-General that, under these circumstances, user will determine whether an item qualifies or not the requirement of clause (1)(a). However, in the present cases this aspect has no relevance. It was not the case of the revenue at any stage before the authorities that an item does not satisfy the requirement of Capital goods within the meaning of the Rule on the ground of its user as it now sought to be urged by .....

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