TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 98
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....t Pressure Pipe and Asbestos Cement Sheets ('A.C. Pressure Pipe and A.C. Sheets'); the petitioner availed ITC on the purchase of raw material used in the manufacture of A.C. Sheets; the Assessing Authority issued notices to the petitioner for disallowing ITC on purchase of raw material used in manufacturing A.C. Sheets for the period under reference; the petitioner filed its detailed reply to the notice; however, not accepting the reply, the Assessing Authority while passing orders under Section 22 of the Act disallowed the ITC and charged interest. The petitioner filed appeals before the DC (Appeals), however, the appellate authority also rejected the appeals by common judgment dated 16.04.2009. Aggrieved, the petitioner filed second appeals before the Board, however, the Board after hearing the parties, while relying on the judgment of this Court in ACTO v. SuncityTrade Agency [2006] 147 STC 405 W (Raj.), also dismissed the appeals observing and holding thus:- "This bench confirms the finding of DC (Appeals) that the appellant company, a manufacture of A.C. Sheets, which has not charged VAT on their sales is exempt from tax on sale of its manufacture p....
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.... Notifications dated 09.03.2007 were issued with reference to the note-sheet of the Finance Department in respect of the proposed amendments to the Rajasthan Finance Bill, 2007 and a communication issued by the Commissioner, Commercial Taxes, Rajasthan, Jaipur to all Dy. Commissioner (Administration), Commercial Taxes Department, in substance indicating that though the petitioner is exempt from tax, A.C. Sheets manufactured by it are not exempted goods. Per contra learned counsel for the respondent submitted that vide Notification S.O.372, whereby, the manufacturers of A.C. Sheets and Bricks were included at S.No.20 in Schedule-II, entitles the units to claim exemption on the sale of manufactured goods on the fulfilment of certain conditions and in view of specific provision of Section 18(1)(e) of the Act, ITC cannot be allowed. Reliance was placed on Notification S.O.377 dated 09.03.2007 issued under Section 8(3) of the Act to state that A.C. Sheets clearly fall within exempted goods. Submissions were made with reference to definition of 'exempted goods' and 'goods' contained in Sub-sections (13) and (15) of Section 2 of the Act, respectively that irrespective of whether the Not....
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....sp; (4) The State Government may, if it considers necessary in the public interest so to do, notify grant of exemption from payment of whole of tax payable under this Act in respect of any class of sales or purchases for the purpose of promoting the scheme of Special Economic Zones or promoting exports, subject to such conditions as may be laid down in the Notification. (5) Every notification issued under this section shall be laid, as soon as may be after it is so issued, before the House of the State Legislature, while it is in session for a period of not less than 30 days, which may comprised in one session or in two successive sessions and if before the expiry of the sessions in which it is so laid or of the session immediately following the House of the State Legislature makes any modification in such Notification or resolves that any such Notification should not be issued, such Notification thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done thereunder." "18. I....
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....me is allowed in respect of purchase of any taxable goods made within the State from a registered dealer to the extent and in the same manner as may be prescribed, inter alia, for the purpose of being used as raw material except those as may be notified by the State Government in the manufacture of goods, for sale within the State or in the course of inter-state trade or commerce. However, if the manufactured goods are exempted, the ITC is not available in terms of sub-clause (e) of sub-section (1) of Section 18 of the Act. It is thus apparent that under Section 18(1)(e) of the Act, it is only the 'exempted goods', which have been taken out of the purview of ITC and not person or class of persons or sale or purchases for promoting Special Economic Zones or exports as envisaged by Section 8(3), (3A) or (4), the use of words 'other than exempted goods', therefore, necessarily means the goods specified in the Schedule-I under Section 8(1) of the Act. It would also be appropriate to notice the Notifications having material bearing:- Notification dated 16.03.2005 under the Act of 1994:- "S.No.1874:F.4(78)FD/Tax/2004-168 Dated 16-03-2....
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....the said Act, the existing expression appearing in Column No.3 against S.No.60A, shall be substituted by the following expression, namely:-" "(1) The goods shall be entered in the Registration Certificate of the selling dealer; (2) The exemption shall be for such goods, manufactured by the dealer who commences commercial production in the State by 31.12.2006. (3) The exemption shall be available up to 23.01.2010." Notification dated 09.03.2007 S.O.371:- "FINANCE DEPARTMENT (TAX DIVISION) NOTIFICATION Jaipur, March 9, 2007 S.O.371.-In exercise of the powers conferred by sub-section (2) of section 8 of the Rajasthan Value Added Tax Act, 2003 (Rajasthan Act No.4 of 2003), the State Government being of the opinion that it is expedient in the public interest so to do, hereby makes the following amendments is Schedule-I appended to the said Act; namely :- AMENDMENTS In Schedule-I appended to the said Act:- (1) ............ (2) The existing S.No.60A and entries thereto, shall be ....
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....weight was inserted as entry 60A, whereafter on 05.07.2006 by another Notification issued under Section 8(2) of the Act, the Schedule-I was amended and entry 60A was substituted. Thereafter on 09.03.2007 three Notifications were issued dealing with A.C. Sheets, whereby, by S.O.371 issued under Section 8(2) of the Act, the existing entry 60A was deleted from Schedule-I, by S.O.372 issued under Section 8(3A) of the Act 'manufacturers of Asbestos Cement Sheets and Bricks' were added in Schedule-II and by S.O.377 issued under Section 8(3) of the Act conditions for availing exemption for sale of A.C. Sheets and Bricks manufactured in the State were indicated. From the above, it is clear that while by the Notifications dated 16.03.2005 issued under the Act of 1994, 16.02.2006 and 05.07.2006 issued under the Act, 'A.C. Sheets and Bricks' were exempted, by Notifications dated 09.03.2007, the goods A.C. Sheets and Bricks were taken out by S.O.371 (supra) and the manufacturers of A.C. Sheets and Bricks were exempted by inclusion in Schedule-II by S.O.372 (supra) and conditions for availing such exemption by the manufacturers were indicated by S.O.377. It is significant that while S.O.371 ....
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....23.01.2010 by including them in Schedule I. Such exemption should have been provided by including such Units in Schedule-II, which is now being proposed. (C/46, 61)." The communication dated 26.04.2008 issued by Commissioner, Commercial Taxes, Rajasthan, Jaipur to all the Dy. Commissioner (Administration), Commercial Taxes Department clearly indicates that by Notification dated 09.03.2007, the manufacturers of A.C. Sheets have been included in Schedule-II and, therefore, the goods sold by dealers, who have purchased goods from manufacturers like the petitioner is liable to pay tax on sale of A.C. Sheets and such subsequent sale is liable to tax, also indicates that even as per the interpretation put by the department on the three Notifications dated 09.03.2007, it is the manufacturers and not the goods, who are exempt from tax. The communication dated 26.04.2008 construing the Notifications dated 09.03.2007 can be used as contemporaneaexpositio. Hon'ble Supreme Court in Collector of Central Excise v. Andhra Sugar Ltd., : AIR 1989 SC 625 while dealing with an exemption Notification under the Central Excise and Salt Act, 1944 observed and held as under:- "....