ITC credit shall be allowed in case of process loss/ Handling loss/ Input loss etc. due to natural circumstances

 M/s Asahi India Safely Glass Ltd. vs. Union of India [CIVIL APPEAL NO. 2381 OF 2005 (Supreme Court)]

The Hon’ble Supreme Court in this matter held that Input Tax Credit shall be allowed in respect of goods lost in production process. The observations of the Apex Court are given here below:

“Manufacture thus involves series of processes. Process in manufacture or in relation to manufacture implies not only the production but the various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to, manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture or processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture.”

To read the complete judgment 2016 Taxo.online 9