TMI Blog2000 (3) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... he case in hand cutting of cloth pieces into smaller sizes would not amount to consumption or use of the cloth of 100 meters length and, therefore, octroi is not leviable. Appeal allowed. - Civil Appeal No.143 of 1992, - - - Dated:- 1-3-2000 - S.P. Bharucha, S.N. Phukan and Ruma Pal, JJ. REPRESENTED BY : S/Shri B.K. Mehta, R.P. Bhat, M.L. Verma and K.G. Shah, Sr. Advocates, Arun N. Mehta, Mrs. Ketty, M.N. Shroff, Ms. Priya Hingorani, Ms. Hemantika Wahi, Mrs. Tanuja Sheel, Ms. Anu Sawhney and Chirag M. Shroff, Advocates with them, for the appearing parties. [Judgment per : S.N. Phukan, J.]. This appeal by special leave is against the judgment of the Gujarat High Court holding that the appellant is liable to pay octroi duty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds or both, brought within the actroi limits for consumption, use or sale therein; 5. In view of the above legal provisions, octroi duty can be levied when goods are brought into the octroi area for consumption, use or sale - mere physical entry of the goods into the octroi area would not attract the levy of octroi. The only question that falls for consideration in this appeal is whether cloth pieces of 100 meters length brought into octroi area and cutting into smaller pieces within that area and then exported would be liable to levy of octroi. 6. In M/s. Anwarkhan Mahboob Co. v. The State of Bombay Ors. [1961 (1) SCR 709], this Court considered the term consumption with reference to explanation to sub-clause (a) of clause (1) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by him. Their is first the act of ginning; ginned cotton is spun into yarn by the spinner; the spun yarn is woven into cloth by the weaver; the woven cloth is made into wearing apparel by the tailor. At each of these stages distinct utilities are produced and what is produced is at the next stage consumed and , therefore, it is usual, and correct to speak of raw cotton being consumed. 8. The Court also referred to an earlier decision in State of Travancore-Cochin v. Shanmugha Vilas Cashew Nut Factory (1954 SCR 53) and quoted the following observation of Das, J. :- The raw cashew-nuts, after they reach the respondents, are put through a process and new articles of commerce, namely cashew-nut oil and edible cashew-nut kernels, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the octroi limits. Therefore, we hold that no octroi is leviable on the cloth pieces of 100 meters length brought by the appellant within the octroi limits of Nadiad town. 12. In M/s. Anwarkhan Mahboob Co. (supra) while giving the above illustration of use of cotton, this court noted that after each stage some utility to the commodity was put in. Relying on the said observation, the High Court took the view that when the cloth pieces of 100 meters length were cut to smaller pieces, some utility was added as cutting was done to meet the requirement of excise rules and demands of consumers. We hold that the High Court erred in coming to the above conclusion inasmuch as it ignored the fact that due to above cutting of the cloth, no dif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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