STATE OF HARYANA Vs. KARNAL AGRICULTURAL INDUSTRIES LIMITED

JUDGEMENT

(1.) This appeal has been preferred by the appellant -assessee under section 36(1) of the Haryana Value Added Tax Act, 2003 (in short, "the HVAT Act") against the order dated 11.4.2012, Annexure A.3 passed by the Haryana Tax Tribunal, Chandigarh (in short, "the Tribunal") for the assessment year 2004 -05. It was admitted on 14.2.2013 to consider the following question of law: - "Whether the input tax credit can be allowed on furnace oil (Petroleum Product) the primary use of which has fuel only -

(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant is working as Deputy Excise and Taxation Commissioner (ST) cum - Revisional Authority, Karnal. The respondent company - M/s Karnal Agricultural Industries Limited, Karnal is engaged in the manufacturing of disc which is a part of Cultivator Harrow, an agricultural implement used for cultivation of land for agricultural purpose. The raw material for manufacturing of disc is billet (small bar of metal for further processing) or old railway line i.e. iron and steel which is first cut into size, heated in a furnace at a high temperature, rolled to make a plate and then cut in the shape of a disc. Finally, the product is painted or powder -coated for marketing and longevity. The respondent company purchased petroleum products i.e. furnace oil worth Rs. 2,91,17,607/ - for use in furnace for heating involved in processing of metal for manufacturing of discs and claimed input tax credit on it in its returns which was allowed by the Assessing authority vide order dated 24.2.2006, Annexure A.1. The Deputy Excise and Taxation Commissioner (ST) -cum -revisional authority (DETC) in exercise of the powers of revision provided under section 34 of the HVAT Act vide order dated 21.5.2008, Annexure A.2 revised the order of the assessing authority after examining the reply filed by the dealer. The input tax claim on the purchases of Rs. 2,91,17,607/ - of furnace oil was disallowed which was used as fuel by the respondent and as such a demand of Rs. 7,24,306/ - was created. The respondent company preferred an appeal against the order of the revisional authority before the Tribunal. Vide order dated 11.4.2012, Annexure A.3, the Tribunal accepted the appeal and set aside the order of the revisional authority. According to the appellant, the revisional authority revised the assessment order of the assessing authority for the assessment year 2005 -06 and the Tribunal vide order dated 11.4.2012, Annexure A.4 remanded the case to the revisional authority. Hence the instant appeal by the revenue.

(3.) We have heard learned counsel for the parties.