TaxTMI 
TaxTMI 
2021 (8) TMI 1011
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.... in turn pertained to orders dated 23rd February 2004 and dated 29th December 2004 of the ACST, Sambalpur Range in Sales Tax Appeal No.AA.10 (SA-II-ET) of 2003-2004 and in AA 14 (SAII-ET) of 2004-2005 respectively. 2. In both these revision petitions, this Court framed the following substantive questions of law on 12th April 2007: (A) Whether in the facts and circumstances of the case the Full Bench, Orissa Sales Tax Tribunal is legally competent and correct in giving finding that Coal is not a raw material for manufacturing of cement rejecting the report of a technically qualified person? (B) Whether in the peculiar facts and circumstances of the case, the Full Bench, Orissa Sales Tax Tribunal is correct to hold that c....
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....is of cement production submitted by the appellant clearly speaks that "Coal ash" and not the "Coal", is the ingredient of cement. It is an undisputed fact that the appellant had purchased coal on payment of entry tax which was used in the process of manufacturing of cement but as the coal in it's original form or in any of its form as coal does not constitute the ingredient of finished products i.e. cement this forum is not convinced with the submission of the learned advocate. It is opt to note here that in the taxation law "coal" and "Coal Ash" are two different commercial commodities, hence the tax paid on coal cannot be adjusted with the coal ash which directly goes into composition of cement." 5. The Petitioner then challenged the ....
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.... unaltered and remain independent of and outside the end-products and those, as here, which might be burnt-up or consumed in the chemical reactions. The question in the present case is whether the ingredients of the last mentioned class qualify themselves as and are eligible to be called "raw material" for the endproduct. One of the valid tests, in our opinion, could be that the ingredient should be so essential for the chemical processes culminating in the emergence of the desired end-product, that having regard to its importance in and indispensability for the process, it could be said that its very consumption on burning-up is its quality and value as raw-material. In such a case, the relevant test is not its absence in the end product, ....
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....other [2012] 56 VST 50 (Ori) where the question whether the coal used for the manufacturing of electricity could be treated as a raw material was answered in the negative. In that case, relying on the decision in Union of India v. Ahmedabad Electricity Co. Ltd. [2004] 134 STC 24 (SC), the Supreme Court observed that "for the purpose of manufacture, raw material has ultimately to get a new identity by virtue of manufacturing process either of its own or in conjunction with the raw material. Therefore, the coal is not a raw material of endproduct, i.e., sponge iron, billets and H.R. coil." 10. In the present case, the coal is used not merely as a fuel but when it gets burnt up in the process of preparation of clinker, it produces coal ash ....
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.... tax credit" under Section 2 (27) of the OVAT Act were also noticed. This Court then concluded as under: "It is not disputed that huge quantity of electrical energy is required during electrolysis process to produce aluminium which is a commercial product. Thus, the electrical energy generated in the captive power plant of the petitioner is not the final product which is sold in the market. Electrical energy which is generated with the use of coal and other materials is only an intermediate product which is used in the process of manufacturing of final product, viz., aluminium, aluminium ingots and sheets, etc." 12. In that process, the Court also took note of the decision of the Supreme Court in J.K. Cotton Spinning & Weaving M....
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...., it boils down to an irresistible conclusion that furnace oil is one of the primary and essential commodities which has a direct relation in the manufacturing process and "direct relation" means without which the manufacturing of end-product is not possible at all. In that view of the matter, we are of the considered view that furnace oil used by the petitioner in the process of manufacture without which production of PSF is not feasible is nothing but consumable." 14. Viewed in the light of the above legal position, the Court concludes that in the present case, the coal used in the process of manufacture of cement is indeed an input within the meaning of Section 2(25) of the OET Act and therefore qualifies for input tax credit as claim....