LAWS(KER)-2018-9-392

MRF LIMITED Vs. STATE OF KERALA

Decided On September 03, 2018
MRF LIMITED Appellant
V/S
STATE OF KERALA Respondents

JUDGEMENT

(1.) The issue in the above Appeal is in a narrow compass as to whether the assessee is entitled to input tax credit under Sec. 11 of the KVAT Act, 2003 (for short "KVAT Act "). The facts in so far as the claims raised are that the assessee manufactures products in its factory at Vadavathoor in Kottayam. The assessee is engaged in the manufacture of tyres, tubes and flaps. It has various units all over the Country and for the purpose of export, the assessee manufactures specific items with a Unique Product Code, which is not done in all the units. For example, if tyres for export is manufactured in Vadavathoor at Kottayam; tubes and flaps for export will be manufactured in some other units. However, the manufacture for export is made on product specifications identified by the Unique Product Code generated for the purpose of filing returns before the Excise Authorities.

(2.) The assessee on manufacture of these products for export, stock transfers it on consignment to its godown at Puzhal in Tamil Nadu, which is stated to be a godown for stocking goods exclusively for the purpose of export. The export is from the said godown and it is an admitted fact that certain exports are carried out from the separate manufacturing units itself.

(3.) The assessee claimed input tax credit of the tax paid on purchase of raw materials from registered dealers to the extent of the stock transfer on consignment, made to the godown of the assessee at Tamil Nadu. The assessee approached the Clarificatory Authority, since it was opined by the assessing authorities that Sec. 13 would not be applicable since the stock transfer on consignment would not be in the course of export. The Clarificatory Authority found that the stock transfer can be said to be in the course of export only if there is certainty that the goods are headed for their foreign destination and not diverted for domestic use. On facts it was found that the manufactured goods received from various manufacturing units of the assessee are pooled at the godown in Tamil Nadu and exported outside the Country. The ultimate destination of the goods would be decided only after the goods are stocked in the godown at Tamil Nadu. The goods according to the Clarificatory Authority joined the export stream only from the godown at Puzhal in Tamil Nadu.