2026-VIL-521-J&K
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SGST High Court Cases

GST - Budgetary Support Scheme under GST - Eligibility of By-products - Scrap arising from manufacturing process qualifies as specified goods – Petitioner engaged in production of TMT bars applies for reimbursement of State taxes under the budgetary support scheme notified under GST regime – Rejection of claim on the ground that M.S. scrap does not fall within the category of "specified goods" as the unit is registered only for manufacture of TMT bars and not scrap - Whether non-standard sized pieces of the principal product (TMT/CTD Bars) that are sold as scrap fall within the definition of specified goods for purposes of claiming budgetary support under the State notifications when the unit is registered only for manufacturing the principal product – HELD - Where a manufacturing unit is registered for production of a particular item and the scrap in question is an inherent and necessary residue of that manufacturing process, having undergone the identical manufacturing process and retaining the essential character of the primary product, such scrap qualifies as specified goods under the Scheme – The scrap constituting non-standardized lengths of the principal product retains the essential character of such product and has undergone the identical manufacturing process as the standard-sized finished products for which the unit is registered - The exclusionary list in the notification is intended to disentitle only those units manufacturing goods specifically enumerated therein, and since scrap is not enumerated in the exclusionary list and is an inevitable byproduct of the authorized manufacturing process, the exclusion does not apply – The respondent's refusal to grant reimbursement solely on the ground that the unit is registered for manufacturing specified products and not scrap is not justified in law. Accordingly, the order refusing reimbursement is quashed and the Respondent is directed to reconsider the claim afresh in accordance with applicable regulations – The writ petitions are disposed of
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