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TMI Blog2021 (10) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, mining, processing and sale of iron ore. The assessee purchased Volvo FM 400 8 x 4 Mining Tippers ('Mining Tippers') and its accessories for effecting transfer of iron ore for processing in the mine area and availed the input tax credit of Value Added Tax (VAT) paid on the purchase of such Mining Tippers. 3. Reassessment proceedings were initiated by the department denying the input tax credit availed on the purchase of mining tippers and its accessories on the ground that such input tax credit is not available as per the restrictions prescribed under Section 11(a)(2) read with Fifth Schedule of the KVAT Act. Subsequently, re-assessment order was passed demanding the input tax credit along with interest and penalty. 4. Being aggrieved by the said order, the assessee preferred an appeal before the First Appellate Authority urging that the operation of mining tippers in mine area is integrally connected with the activity of manufacture/processing of iron ore, and therefore, the restriction in relation to the availment of input tax credit on the motor vehicles as prescribed under Section 11(a)(2) of the KVAT Act would not apply to the mining tippers purchased by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Co. Pvt. Ltd., supra, in support of his contention that the use of machinery in mine area is integrally connected with the activity of manufacture/processing of goods. 8. Learned AGA appearing for the respondent made an endeavor to justify the impugned order placing reliance on the judgment of this Court in Canara Overseas Ltd., supra. 9. We have carefully considered the arguments advanced by the learned counsel appearing for the parties and perused the material on record. 10. Relevant provisions are quoted hereunder for ready reference:- Capital goods is defined under Section 2(7) of the KVAT Act, which reads thus:- 2(7) "Capital goods" for the purpose of Section 12 means plant, including cold storage and similar plant, machinery, goods vehicles, equipments, moulds, tools and jigs, and used in the course of business other than for sale." Goods vehicle is defined as under: "2(16). "Goods vehicle" means any kind of vehicle used for carriage of goods either solely or in addition to passengers (other than aeroplanes and rail coaches) and includes push cart, animal drawn cart, tractor-trailer and the like;" 11. Input tax restrictions.- (a) Input tax shall not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed, screened and dressed in the dressing plant and stacked at the mining site and the goods purchased by the assessee for use in the subsequent operations could not therefore be regarded as goods purchased from use in mining. The requirement of Section 8(3)(b) of the Central Sales Tax Act and Rule 13 is that the goods must be purchased for use 'in mining' and not use 'in the business of mining'. It is only the items of goods purchased by the assessee for use in the actual mining operation which are eligible for inclusion in the certificate of registration under this head and these would not include goods purchased by the assessee for use in the operations subsequent to the stacking of the ore at the mining site. Further referring to the decision of the Hon'ble Apex Court in Indian Copper Corporation Limited vs. The Commissioner of Commercial Taxes reported in 15 STC 259 concluded that the machinery, vehicles, barges and other items of goods purchased by the assessee for use in carrying the mined ore from the mining site to the river side and from the river side to the Marmagoa harbour fall within the description of goods intended for use in processing of ore for sale within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. Section 12 of the Act, provides for deduction of input tax in respect of the capital goods. Hence, we are of the view that the appellant is entitled for deduction of input tax in respect of purchase of a Canter fitted with Tanker. The judgment in the case of Canara Overseas Limited, Bangalore v. State of Karnataka reported in 2009 (67) KLJ 161 (HC) (DB) relied upon by the Advocate appearing for the respondent is not applicable to the facts of the present case." 14. In the case of Canara Overseas Ltd., supra, the assessee was an 100% export oriented unit engaged in exporting the iron ore from the place of extraction and processing to the other countries. In order to export the same, iron ore has to be transported from the place of extraction or from the place of processing, till shipment is completed. In order to transport the iron ore, chassis is purchased and thereafter a body is built on it, in order to treat it as a truck or lorry. In that context, it was held that the purchase of chassis by the assessee is not for the purpose of manufacturing of the goods or for processing. 15. In Jayaswal Neco Limited vs. Commissioner of Central Excise, Raipur reported in (2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Commissioner for revising the order of the First Appellate Authority is that these vehicles are used by the assesee for transportation of iron ore from stock yard/mine area to the dump yard i.e., railway station for onward moving to the destination. 20. In the case of Suma Oil Agencies, the assessee had purchased a canter fitted with the tanker for the transportation of edible oil which is taxable goods from one place to another. Even in such context, the input tax credit was extended to the assessee in respect of the purchase of the said canter fitted with tanker. As such, the said judgment would be squarely applicable to the facts of the present case. Moreover, in the light of the judgment of the Hon'ble Apex Court cited above, wherein goods purchased by the assessee for using in mining operation more particularly, where the extraction of ore from the mining and the transporting the same to the harbor involving different operations is held to be in the manufacture or processing of goods for sale or in mining, the mining tippers purchased by the assessee as capital goods is entitled for input tax credit, denial of the same is unjustifiable. 21. For the reasons aforesaid, we an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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