TMI Blog2023 (1) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... e trade or commerce, a dealer is entitled to full amount of I.T.C. In the instant case, the claim of assessee-dealer was solely rejected on the ground that he had not dealt with the sale and purchase of license which he had purchased from open market and was thus not entitled to claim I.T.C. The authorities as well as the Tribunal recorded a finding that no manufacturing activity was carried out by the assessee after importing the goods from outside the country using the import license. In VIKAS SALES CORPORATION AND ANOTHER VERSUS COMMISSIONER OF COMMERCIAL TAXES AND ANOTHER (AND OTHER APPEALS AND WRIT PETITIONS) [ 1996 (5) TMI 363 - SUPREME COURT] , the Apex Court had already held that grant of license by Licensing Authority to the registered exporter is not a sale. The sale is when the registered exporter or purchaser sells it to another person for consideration - In the instant case, the assessee-dealer had purchased import license from another person after paying the taxes as was applicable and the licence, which was in a intangible form was converted into a tangible form by the assessee importing chemical from outside the country. The findings recorded by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see but rejected the claim of Input Tax Credit (hereinafter called as I.T.C. ) of Rs.2,01,427.89 on the purchase of R.E.P. License. Against the rejection of the claim of I.T.C., a first appeal was preferred before the Appellate Authority, which was dismissed vide order dated 15.01.2013. Aggrieved by the said order, a second appeal was preferred before the Commercial Tax Tribunal, which was also dismissed by the order impugned, hence, the present revision. 7. Learned counsel for the assessee submitted that the rejection of claim of I.T.C. was not correct by the Assessing Authority as well as by the Tribunal as the Apex Court in Vikas Sales Corporation and others vs. C.C.T. (1996) 4 SCC 433 held that import license, which are called as replenishment licences (R.E.P. Licenses), are goods which can be sold and purchased from the market and on the purchase and sale of such transaction, the liability of tax is there. He then contended that the assessee had purchased the goods i.e. R.E.P. license, which is liable to be taxed and admittedly the tax was paid by the assessee on its purchase therefore, refusal to grant I.T.C. was not correct. The R.E.P. licenses as per the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms duty should be held to constitute use of such DEPB scrip for the purposes of sale of the imported commodity. The DEPB scrip has contributed, if not directly then indirectly, to the price of the imported commodity sold by the Assessees in the market. There could be any number of intangibles that have an impact on the value of the final product like advertisement costs in respect of which input service tax credit may have been availed of, as was in the case of Coca Cola India Pvt. Ltd. (supra). All that is to be shown is that such input tax paid goods have contributed to the sale of the final product in some way directly or indirectly. 25. The Court also rejects the other contention of the DTT that input tax credit cannot be availed of unless the Assessees are themselves dealing in DEPB scrips. In other words, in order to avail of the input tax credit in the present case it is not necessary that the Assessees have to be dealers in the same commodity, i.e. the DEPB scrips which were used in payment of customs duty on the imported goods in which they were dealing. Such an interpretation will negate the object of introducing the system of value added taxes, i.e. to reduce the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold the same is entitled for the claim or not? 16. The issue as regards R.E.P. license has already attained finality and the matter is no more res integra and the Apex court in Vikas Sales Corporation and others (supra) has already held the license to be goods . Once the license have been held to be goods and are liable to be taxed on the sale and purchase, the benefit as extended under Section 13 of the Act of 2008 cannot be denied to a dealer who is in the said business. 17. As far as the question of purchasing and selling the license itself is concerned, there is no controversy and the assessee is entitled to get the benefit of Section 13(1)(a) of Act of 2008 and can claim I.T.C. on the tax paid by him on the purchase of import license. 18. The question before the Court is when a dealer after purchasing any import license from open market and after paying tax at the rate of 4% as per the notification and having used the license for import of chemical and thereafter selling the goods so imported by him in furtherance of his business is entitled for the benefit of I.T.C. or not. 19. Section 13 of the Act of 2008 is charging section which deals for grant of Input Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than as a result of a sale; or (ii) used in manufacture of any taxable goods except non-vat goods and such manufactured goods are transferred or consigned outside the State otherwise than as a result of a sale. Partial amount of input tax, which is in excess of rate prescribed under sub-section (1) of Section 8 of the Central Sales Tax Act, 1956 of the purchase price on which the dealer has paid tax either to the registered selling dealer or to the State Government. 20. From the reading of Column (2) of the table, it is clear that if the purchased goods are resold inside the State or in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India, full amount of input tax credit is available to a dealer. 21. Similarly, if goods purchased are used in manufacture of any goods and where such manufactured goods are sold in the course of export of goods outside the territory of India or any taxable goods manufactured are sold either inside the State or in the course of inter- State trade or commerce, a dealer is entitled to full amount of I.T.C. 22. In the instant case, the claim of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word adapted or adapting means suitable for use in a given situation. The chemical, which was imported by the assessee from outside country using import license in bulk was sold as per the requirement in small quantity, adapting it to the requirement and situation. 28. Thus, the action of the assessee in adapting for use of the chemical brought in for the purpose of business would be encompassed under the definition manufacturer . 29. In Vikas Sales Corporation (supra), the Apex Court had already held that grant of license by Licensing Authority to the registered exporter is not a sale. The sale is when the registered exporter or purchaser sells it to another person for consideration. 30. In the instant case, the assessee-dealer had purchased import license from another person after paying the taxes as was applicable and the licence, which was in a intangible form was converted into a tangible form by the assessee importing chemical from outside the country. 31. The Delhi High Court in Jagriti Plastics Limited (supra), while allowing the benefit of I.T.C. had held that it was not necessary that assessee has to be dealer in same commodity i.e. selling the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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