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2014 (7) TMI 443 - ALLAHABAD HIGH COURTLevy of entry tax - U.P. Tax on Entry of Goods Into Local Areas Act, 2007 - whether "rail line scrap" which is an item of iron and steel is exempt from entry tax in view of amended notification dated January 15, 2009 or would fall within the clause (xvi) of section 14(iv) of the Central Sales Tax Act, 1956 as has been held by the Tribunal - Held that:- It is common acknowledge that "scrap" is something which is a waste and discarded material or a material which has been worn out or has been declared as useless - Generally, the person filling form 38 and making tax invoices are not technical persons, who may be able to make a distinction between scrap and defective/rejected material and the impact of mentioning it incorrectly. Therefore, the mere entry of the material in form 38/tax invoice as rails (defective/RE) would not be sufficient and conclusive to hold that the material was actually defective or rejected basis of iron steel and not a waste or a scrap material - rail line scrap has been sold in the first instance by the railway authorities and has been subsequently purchased by the dealer in question. The authorities below simply on the basis of the entries made in invoice and form 38 without any physical examination of the material have treated it to be a defective and a rejected material and not a scrap or a waste material - It is therefore, clear that anything which has been rendered useless and worn out or is a waste would be a scrap and it is different from material which is defective or rejected but the real test to distinguish between the two would only be by ascertaining the nature of the material in the hands of the party selling it, i.e., the railways in the present case - Impugned order is set aside - matter remanded back - Decided in favour of assessee.
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