9911796707
TMI Blog2020 (3) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Bareilly. The revisionist company is registered under the Act, 1948 as well as Central Sales Tax Act. The revisionist has been granted recognition certificate under Section 4-B(2) of the Act, 1948, for purchase of diesel against form III-B as provided under Section 4-B of the Act, 1948. The Diesel purchased by the revisionist was used in the Generator Sets for generating electricity which in turn was used for running the plant and machinery which is required for manufacture of "Khandsari Sugar". A notice under Section 4-B(5) of the Act, 1948 was issued by the Assistant Commissioner (Assessment), Trade Tax, Bareilly. The revisionist submitted a detailed reply to the aforesaid notice on 17.03.2007. Considering the reply of the revisionist, the competent authority vide order dated 20.03.2007, imposed penalty of Rs. 13,00,000/-. Aggrieved by the order dated 20.03.2007, revisionist filed an appeal under Section 9 of the Act, 1948 before the Deputy Commissioner (Appeals), Trade Tax, Bareilly. The appeal was dismissed by order dated 23.08.2007, confirming the imposition of penalty. The revisionist filed second appeal before the Trade Tax Tribunal, Bareilly, which was dismissed by order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of this Court in the case of M/s Shree Bhawani Paper Mills Ltd. Vs. State of U.P., 2015 UPTC 1057, wherein the Court has observed as under : "27. It is undisputed that petitioners were granted a Recognition Certificate under Section 4-B of the Act read with Rule 25-A of the U.P. Trade Tax Rules, 1948 (hereinafter referred to as the Rules) in which under the heading "fuel and lubricants" the comidity "high speed diesel oil" is mentioned. It is also undisputed that in the Recognition Certificate several goods including diesel oil has been mentioned as the goods required tin the manufacture of the final product by the petitioners. It is also undisputed that some of the petitioners as mentioned above do not have any power connection and use diesel oil in their generator set installed in the factory premises to run their plant and machinery so as to manufacture their final product. The other petitioners who have power connection but their industry is a continuous process industry and, therefore, so as to ensure to run plant and machinery continuously even in the vent of power cut or power breakdown, generators have been installed in the factory in which diesel oil has been used t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r exemption as raw material, processing material or consumable stores and observed as under : "8. In our view, one of the important tests applied by this Court in J.K. Cotton, AIR 1965 SC 1310, and Ballarpur Industries, 1989 (4) SCC 566 is the "test of essentiality" or the "test of dependency" in deciding the question as to whether the expression "raw materials" or processing materials" or "consumable stores" would cover various fuels like naptha, liquid diesel oil, natural gas etc. We may reiterate for the sake of clarity that in this case, the fuels consumed are natural gas, furnace oil, diesel oil and naptha. Broadly, these fuels are used by the industry for carrying on its manufacturing process. In most cases, these fuels are used to generate electricity which is then used in the manufacture of end products like caustic soda, industrial chemicals, etc." 8. Learned Sanding Counsel appearing for the Revenue on the other hand has supported the order impugned and submitted that penalty has been rightly imposed under Section 4-B(5) of the Act, 1948 inasmuch as the Tribunal in very clear terms has recorded finding that the revisionist has procured Diesel Oil in excess of the quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to run the plant and machinery for manufacture of sugar. It has also been urged that the remaining amount of Diesel was used for maintenance and installation of machinery, which is permissible under the law. 14. Looking into the aforesaid facts and circumstances that the Revenue in exercise of power under Section 4-B of the Act, 1948 has granted recognition certificate to the revisionist for procuring Diesel Oil to be used for production of sugar and taking into consideration the judgment of this Court in the case of M/s Shree Bhawani Paper Mills Ltd. (supra), the revisionist was entitled for the benefit under the Act, 1948. The Tribunal has recorded that the revisionist had procured 175 Kilo Liters of Diesel Oil in the relevant assessment year which is far in excess to the quantity of 10 Kilo Liters of Diesel for running the plant and machinery during the season for production of final product, and therefore, there is all possibility that the said excess quantity of Diesel has been diverted for private gain, and for which penalty has been rightly invoked. 15. Perusal of the impugned order passed by the Tribunal clearly indicates that there was no material before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
