M/S Vijay Steel Industries Sidco Industrial Complex Bari Brahmana Jammu vs. U T Of J And K Th State Tax Officer Circle G Excise And Taxation Complex Jammu

Held

The Court held that the respondent was not justified in refusing reimbursement on the ground that M.S. Scrap is not a specified good under the scheme. The definition of 'specified goods' in SRO 519 means goods manufactured by the industrial unit, except those in Annexure-A. The petitioner is registered for manufacturing TMT/CTD Bars, and the scrap is a necessary residue of this process. Since scrap is not listed in Annexure-A, the exclusion does not apply. The Court noted that the respondent acknowledged the scrap as an inherent residue and that it undergoes the identical manufacturing process as the primary TMT/CTD Bars. The Court also noted the petitioner's contention that Central Tax Authorities had granted similar reimbursement. Consequently, the order rejecting the claim was quashed, and the respondent was directed to reconsider the claim afresh and pass a reasoned order within one month.

Facts

The petitioner, M/s Vijay Steel Industries, established a unit for manufacturing steel products and was initially entitled to excise duty exemptions. Following the GST rollout, new budgetary support schemes were introduced by both Central and State governments. The petitioner applied for this budgetary support, and an inspection team found it eligible. The petitioner sought reimbursement for periods between April 2018 and April 2021. The State Tax Officer rejected the claim, stating that M.S. Scrap, an output of the manufacturing process, did not fall under the definition of 'specified goods' as per Notification No. 519 dated 21.12.2017. The petitioner argued that M.S. Scrap, being edge cuttings from TMT bars, constituted manufactured goods and qualified for the scheme.

Key Issues

1. Whether M.S. Scrap, arising as edge cuttings from the manufacturing of TMT/CTD Bars, qualifies as 'specified goods' under Notification No. 519 dated 21.12.2017 for the purpose of availing budgetary support under the Goods and Services Tax regime, thereby turning on the interpretation of 'specified goods' as defined in Clause 2.2 of SRO 519 and the exclusionary list in Annexure-A. Petitioner's arguments: The M.S. Scrap is not mere waste but a manufactured product that has undergone the entire manufacturing process. It was cleared during the pre-GST regime on payment of Central Excise Duty and thus qualifies as 'specified goods' under both Central and State budgetary support notifications. The Central Tax Authorities have already granted reimbursement for M.S. Scrap. Respondent's arguments: The petitioner is registered for manufacturing TMT/CTD Bars, not for producing scrap. Clause 2.1 and 2.2 of SRO 519 indicate that the scheme is available only for goods manufactured by the industrial unit. Since scrap is not among the specified goods for which the petitioner is registered, it remains ineligible for reimbursement.