BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT Dated : 12.05.2025 CORAM:

THE HON'BLE Mr.JUSTICE P.VELMURUGAN and THE HON'BLE Mr.JUSTICE K.K.RAMAKRISHNAN TC (MD).No.21 of 2010 M/s.Shri Natraj Ceramic & Chenical Industries Ltd., Dalmiapuram, Trichy. ... Appellant Vs.

The State of Tamil Nadu represented by The Joint Commissioner (CT), Trichy Division, Trichy. ... Respondent Prayer Tax Revision Case has been filed under Section 60(1) of the Tamilnadu Value Added Tax Act, 2006, to set aside the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, in MTA.No.48 of 2009 dated 17.08.2010.

For Appellant : Mr. S.Karunakar For Respondent : Mr.R.Suresh Kumar, Additional General Pleader

JUDGMENT

(Order of the Court was made by K.K.RAMAKRISHNAN J.,)

The present Tax Case Appeal is filed seeking to set aside the order dated 17.08.2010 passed by the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, in MTA.No.48 of 2009.

2. The brief facts of the case are as follows:-

The appellant is a manufacturar of Refratory products. They entered into an agreement with M/s.Dalmia Cement (Bharat) Limited (herein thereafter called DCL) on 27.11.1997 wherein they undertook to carry out the job work of manufacturing the refratory products by using the basic raw materials supplied by DCL. They are the registered dealer under the Tamil Nadu Value Added Tax Act, 2006. They made the assessment for the year 2006 – 2007 under the Tamil Nadu Value Added Tax Act, 2006 as per the original assessment order dated 30.06.2008 passed against them.

Subsequently, the assessment was revised by the assessing authority for the wrong claim of 'input tax credit' on capital goods for the reason that the appellant was only doing job work to the Tvl.Dalmia Cements (P) Limited and they are not eligible to claim input tax credit on capital goods and therefore, there is a claim of Rs.3,06,337/-. The said reassessment order was challenged by the appellant before the Appellate Deputy Commissioner (CT), Trichy. The Appellate Deputy Commissioner (CT), Trichy, declined to accept their appeal and hence, they preferred further appeal before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, in MTA.No.48 of 2009 and the same was dismissed by the order dated 17.08.2010. Aggrieved over the said order, the appellant has preferred the present appeal.

2.1. The learned counsel for the appellant would submit that both the Authorities failed to consider that the appellant is entitled to input tax credit on the purchase of capital goods as per Section 19(2)(iv) of the TNVAT Act, 2006.

2.2. He would further submit that the authorities erroneously held that since the appellant who undertook the job work of manufacture for others, are not eligible to avail input tax credit on the purchase of capital goods since the capital goods were used for job work of others. The Appellate Tribunal failed to consider the clause(e) in sub rule (4) of Rule 10 of the TNVAT Rules, 2007, and hence, there are legal infirmities in the order of both the authorities. Hence, he seeks to allow this appeal by setting aside the order dated 17.08.2010, passed by the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, in MTA.No.48 of

2009.

3. Per contra, Mr.R.Suresh Kumar, the learned Additional Government Pleader for the respondent would submit that first of all, to claim benefit of input tax credit, the appellant should be a dealer and also manufacturing capital goods. In this case, the appellant is neither a dealer nor manufacturing capital goods. DCL produced the final products by using the products supplied by the appellant vide the job work. The job work does not come under the purview of the Act. Even though, there is no definition for 'job work' under TNVAT Act, it was incorborated in Rule

2(n) of the Cenvat Credit Rules, 2004, which reads as follows:-

“(n) “job work” means processing or working upon of raw material or semi-furnished goods supplied tothe