9911796707
TMI Blog2015 (3) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in a business of development of software and is a 100% export oriented unit (for short 'EOU'). They undertake the activity of research, development and export of computer software. The petitioners have been importing capital goods, consumables, spares, etc., for development of software duty-free availing the benefit of Notification No.140/91-Cus dated 22.10.1991 under the EOU/STPI scheme. They are also procuring the said items indigenously as per the permission granted by the manufacture sanction order of the Deputy Commissioner of Customs. The petitioners after manufacturing the software products, with the help of raw materials, export such software products outside India. Monthly returns are filed by the petitioners since Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machines, office stationery, air conditioners, building materials, security systems for building, work stations and works contract tax on AMC. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. The Tribunal partly allowed the appeal by allowing the claim of input credit rebate on purchase of work stations and confirmed the orders of the authorities below insofar as the input credit rebate of Xerox machines, office purchases, stationery, air conditioners, building materials, security systems for building. It is against this order, the assessee has preferred the appeal. In fact, the revenue has also preferred an appeal challenging the basis for allowing the input tax rebate on work stations. 3. The learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts business of sale of any goods in the course of export out of territory of India, then notwithstanding the fact that the said goods fall in Fifth Schedule to the Act, the assessee is entitled to the benefit of tax repaid notwithstanding Section 11 of the Act. Therefore, it is necessary to find out what the capital goods are and how it has been defined under the Act. 6. Section 12 deals with capital goods. It reads as under: "12. Deduction of input tax in respect of Capital goods.- (1) Deduction of input tax shall be allowed to the registered dealer in respect of the purchase of capital goods on or after the commencement of this Act] for use in the business of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in business of taxable goods. Rule 133 of the KVAT Rules provides that no deduction of input tax shall be allowed where the use of capital goods relates wholly to the sale of exempt goods. Clause (b) of the above Rule provides that where the capital goods used for sale of taxable goods wholly or partly the dealer shall be eligible for rebate on such capital goods. The cumulative reading of the above provisions make it clear that when the dealer purchased the capital goods for the purpose of his business, he is entitled for deduction of input tax under the Act. The language employed in the definition of 'Capital Goods' makes it clear that deduction of input tax shall always be allowed in respect of purchase of capital goods for the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te as to whether the Xerox machine was a machine or not. But the question was whether it should be treated as duplicating machinery or machinery. Therefore, the duplicating machine i.e, Xerox machine is a machine which falls within the definition of 'machine'. 9. Insofar as air conditions are concerned, it is also machinery which is used to keep the temperature of a manufacturing process at a particular temperature. Therefore, it is a machinery used in the course of the business of the assessee and it is also eligible for input tax rebate. Similarly, the security systems for buildings are also machinery installed in the premises of the business for production of the manufacturing and therefore, the finding recorded by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; and as such the machinery is used in the course of business the assessee is entitled to the input tax rebate. The appellate Tribunal has not looked into this statutory provision before arriving by such conclusion and therefore, it is not sustainable. 10. Similarly, the findings of the Tribunal that there is no requirement that a particular temperature alone is essential for software development, the air conditioner makes the atmosphere good and increases the comforts, but they are not directly connected with the software activity, are concerned, in view of the reasons set out above, while considering the meaning of the word 'business', it is not necessary that there should be a direct nexus between the machinery and the activi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
