TaxTMI 
TaxTMI 
2022 (4) TMI 1034
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....1988 read with Central Motor Vehicles Rules 1989 and the definition of 'vehicle' under Section 2(ar) of the Act covers only those vehicles which are used for transportation of goods? ii) Whether input tax credit can be denied on spare parts of loader and tipper, which are integral part of manufacturing process, without which, the manufacturing process, even if theoretically possible, is commercially inexpedient in view of the Apex Court judgement in the case of M/s J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs. STO, Kanpur AIR 1965 SC 1310 and Jayaswal Neco Ltd. vs. CCE, Raipur 2015 VIL 31 SC decided on 13th March, 2015? iii) Whether the Tribunal erred in law in ignoring the definition of 'vehicle' under the U.P. VAT Act and thereafter relying on the Apex Court judgement in the case of Bose Abraham vs. State of Kerala AIR 2001 SC 835, which was rendered in the context of Motor Vehicles Act, 1988 and the definition of 'vehicle' under both the Acts are substantially different? 3. Learned counsel for the applicant submits that the Company is engaged in mining of boulders from the mine situated at Sonbhadra. From the boulders, the applica....
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....is further averred that for shifting boulders upto the stone crushing plant, tipper is used and then loader is used for loading to the hopper of the stone crushing plant. It has further been averred that without the help of these two machines, manufacturing/processing activity cannot be done. It is further averred that these two machines, i.e., tipper and loader, are captively being used within the mining area, where the crushing plant is also situated. Therefore, these two machines should be treated as "capital goods". 7. Before proceeding further, certain provisions of the U.P. VAT Act, U.P. VAT Rules and Central Motor Vehicle Rules are necessary to be looked into, which are as follows: U.P. VAT Act "Section 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 the dealer and includes:- (i) components, spare parts and accessories of such plant, machine, machinery, equipment, apparatus, tool, appliance or electrical installation; (ii) moulds and dies; (iii) storage tank; (iv) pollution control equi....
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.... goods and where such manufactured goods is,- A- sold within the State or in the course of inter-state trade or commerce or in the course of the export of the goods out of the territory of India; or B-transferred or consigned outside the State otherwise than as a result of a sale; or (ii) manufacture of any exempt goods except non-vat goods and where such manufactured goods are sold in the course of export of the goods out of the territory of India; or (iii) generation of electrical energy, where such energy is used for the manufacture of any taxable goods other than non vat goods and such manufactured goods is,- A- sold within the State or in the course of interstate trade or commerce or in the course of export of the goods out of territory of India; or B-transferred or consigned outside the State otherwise than as a result of a sale; or (iv) generation of electrical energy where such energy is used for the manufacture of any exempt goods and such exempt goods is sold in the course of export of the goods out of territory of India; and the amount of input tax shall be computed and be claimed in prescribed manne....
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....hority under rule 35; (h) "non-transport vehicle" means a motor vehicle which is not a transport vehicle." 8. According to section 2(f)(viii) of the VAT Act, machinery, loader, equipment for lifting or moving goods within factory premises are capital goods. Further, exclusion clause (iv) of section 2(f) provides that vehicle used for transporting goods or passengers or both, on which items ITC will not be available. 9. Section 2(f) (ar) defines "vehicle", which means any kind of mode of transportation used for carriage of goods including motor vehicle constructed or adapted for the carriage of goods, or any other motor vehicle not so constructed or adapted when used for the carriage of goods solely or in addition to passengers including every wheeled conveyance, pull or push cart including animal drawn cart, animal, trailer, trolley, bicycle, tricycle, carrier, etc. Rule 2 (ca) of the Central Motor Vehicle Rules defines "construction equipment vehicle". Perusal of the said sections would clearly show that the loader is specifically covered by the definition of "construction equipment vehicle" and tipper, being designed off-highway operations in mining, industrial und....
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....ng site to the river side and from river side to the Marmagoa harbour was not based solely on the ground that these items of goods are purchased for use `in mining'. The alternative contention of the assessee was that these items of goods are purchased for use in processing of ore for sale. The assessee submitted that mining of ore and processing it for the purpose of sale by carrying out blending through the Mechanical Ore Handling Plant constitute one integrated process and carrying the ore from the mining site to the river side and from the river side to the Marmagoa harbour where the processing is being done, is part of this integrated process and hence the items of goods purchased for use in this latter operation are eligible for inclusion in the Certificate of Registration. We think there is great force in this submission of the assessee. Where a dealer is engaged both in mining operation as also in processing the mined ore for sale, the two processes being interdependent, it would be essential for carrying on the operation of processing that the ore should be carried from the mining site mined ore for sale, the two processes being inter-dependent, it would be essential f....
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....ons and in the manufacturing process-the two processes being inter-dependent- it would be impossible to exclude vehicles which are used forremoving from the place where the mining operations are concluded to the factory where the manufacturing process starts. It appears that the process of mining ore and manufacture with the aid of ore copper goods is an integrated process and there would be no ground for exclusion from the vehicles those which are used for removing goods to the factory after the mining operations are concluded. Nor is there any ground for excluding locomotives and motor-vehicles used in carrying finished products from the factory. The expression "goods intended for use in the manufacturing or processing of goods for sale" may ordinarily include such vehicles as are intended to be used for removal of processed goods from the factory to the place of storage. If this be the correct view, the restrictions imposed by the High Court in respect of the vehicles and also the spare parts, tyres and tubes would not be justifiable." 13. In the aforesaid judgement, the Hon'ble Supreme Court has held that if any machinery or vehicle is used for carrying from mining site ....
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....rent kind of vehicle. Hence, in our view, the High Court has correctly decided the matter and the impugned order does not call for any interference by us. However, the question whether any motor vehicle has entered into a local area to attract tax under the Entry Tax Act or any concession given under the local ales Tax Act will have to be dealt with in the course of assessment arising under the Entry Tax Act." 18. The Hon'ble Apex Court in the said judgement dealt with the issue with regard to levy of entry tax or not on excavators and road rollers. On the said background, the Hon'ble Court was pleased to hold that merely because of motor vehicle is put to a specific use, such as, being confined to enclose premises, will not render the same to be a different kind of vehicle as they are registered under the Motor Vehicle Act and liable for payment of entry tax. 19. The issue in hand is entirely different. The issue in hand is not the levy of tax, but the issue is as to whether purchase of loader and tipper can be considered as "capital goods" within the meaning of section 2(f) of the VAT Act or not. The levy of tax is not in dispute in the case in hand and therefore, t....