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TMI Blog2021 (8) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... , [ 2012 (11) TMI 835 - ORISSA HIGH COURT] where the question was whether coal, alum, caustic soda and other consumables used as inputs for manufacturing of aluminum, aluminum ingots and sheets would enable the Petitioner in that case to avail input tax credit on such inputs. That question was answered in the affirmative in favour of the said Petitioner. 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 claimed by the Petitioner - the Tribunal erred in holding that the coal is not a raw material for manufacturing cement - the Tribunal erred in coming to the conclusion that coal could not be treated as a raw material vis- -vis the finished product i.e. cement. Revision petition disposed off. - STREV No.28 and 29 of 2007 - - - Dated:- 18-8-2021 - THE CHIEF JUSTICE DR. S. MURALIDHAR AND JUSTICE B.P. ROUTRAY For the Petitioner : Mr. Siddhartha Ray, Advocate For the Opposite Party : Mr. Sunil Mishra, Additional Standing Counsel ORDER Dr. S. Muralidhar, C.J. 1. Both these revision petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysis 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 orders passed by the ACST filing the aforementioned appeals before the Tribunal. By the impugned common order dated 16th December 2006, the Full Bench of the Tribunal upheld the conclusion arrived at by the ACST and dismissed the appeals. 6. This Court has heard the submissions of Mr. Siddhartha Ray, learned counsel appearing for the Petitioner and Mr. Sunil Mishra, learned Additional Standing Counsel for the Opposite Party-Sales Tax Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a mill to fine powder and then with the use of coal the fine powder is burnt in a kiln to get clinker. Then the clinker so obtained is mixed with gypsum and slag and ground in a mill to fine powder to get cement. It is also submitted that when coal is burnt in the kiln, coal ash thereof gets mixed with the clinker which is an intermediate product from which cement is produced. It is further submitted that the ash content of coal thus ultimately forms an ingredient of the end product. 9. The Tribunal further noted the submissions of the Department to the contrary that the coal used in the manufacturing process plays the role of fuel and it is not used as raw material . In this context, Mr. Sunil Mishra, learned Additional Standing Counsel for the Opposite Party-Sales Tax Department places reliance on the decision of this Court in Bhusan Power Steel Limited v. State of Orissa and another [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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 Mills Co. Ltd v. Sales Tax Officer, Kanpur and others [1965] 16 STC 563 (SC) where it was held that the expression in the manufacture of goods should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. It was further observed as under: Where any particular process is so integrally connected with the ultimate production of goods but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would fall within the expression in the manufacture of goods . Undisputedly, in the present case, the generation of electrical energy in the captive power plant is integrally connected with the ultimate production of finished goods. Therefore, the goods required in the process of generation of electrical energy would fall within the expression in the process of manufacturing. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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