TMI Blog2014 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... he understanding of what 'manufacturer' is - It defines, 'manufacturer' - Manufacture' has to be understood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines - Thus, when fresh milk is made as recombined milk or pasteurised milk, there being manufacture, the assessee is entitled to the benefit of Section 3(3) - Tribunal committed an error in holding that there was no manufacturing activity involved when fresh milk was converted as recombined milk/pasteurised milk. Concessional levy of Tax – Penalty - u/s 3(3) & u/s 23 of the TNGST Act, 1959 – Held that:- Section 3(3) grants concessional levy on the sale of packing materials - The benefit of concessional levy is available in respect of purchase of polythene sheets to be used as packing material for sale of pasteurised milk - Order of the Tribunal set aside including the levy of penalty and the Revision is allowed – Decided in favour of assessee. - Tax Case (Revision) No.1149 of 2006 & TCMP No.1601 of 2006 - - - Dated:- 20-7-2012 - Chitra Venkataraman And K. Ravichandra Baabu,JJ. For the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or packing manufactured item. As it had undergone a process as a sachet, Section 3(3) was not available. Consequently, the assessee was not entitled to the concessional levy. 4. Thus, on this gruond, the claim was rejected. Aggrieved by this, the assessee went on further appeal before the Tamil Nadu Sales Tax Appellate Tribunal, which confirmed the view of the Authorities below. 5. The Tribunal pointed out that milk marketed by the assessee did not undergo any processing to result in a different commodity, thus pasteurised milk retained its characteristics as milk; consequently, there was no manufacturing activity involved to result in a different commodity. It further pointed out that re-constituted or re-combined milk and fresh milk were included under Entry 6 to part B of the third Schedule to the Act, the concessional levy under Section 3(3) would be available only in respect of goods attracting levy under First Schedule to the Act. Thus, as milk sold by the assessee was assessable under Third Schedule, concessional levy was not available. As regards the levy of penalty, the Tribunal reduced the same to 50% of the tax payable as against 150% adopted by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned milk, there is a manufacturing process involved; consequently, the Tribunal committed serious error in holding that there was no manufacturing process. Thus learned counsel pointed out that contrary to the understanding of the Tribunal, milk was very much under the First Schedule good during the relevant assessment year, viz., 1993-94 and only from 1994-95, it was brought under Third Schedule. Being First Schedule good, Section 3(3) was very much applicable to the facts of the case. 8. As far as the packing material is concerned, the Act contemplates use of packing material in connection with the manufacture and sale of goods mentioned in the First Schedule. Once the first question thus stood answered in favour of the assessee, Form XVII declaration used for the purchase of packing material also qualified for concessional rate of tax. 9. Learned Special Government Pleader appearing for the Revenue, however, disputed the said claim of the assessee and submitted that there was no manufacturing activity involved in converting the fresh milk into recombined milk or a pasteurised milk. In the circumstances, the assessee is not entitled to concessional levy in respect of purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned milk and milk drink with or without any addition thereto for being sold as a beverage . 14. Going by the enumeration in the exemption notification, it is clear that the State intended to treat fresh milk as different from recombined milk and milk drink with or without addition, to be sold as a beverage. If the Statute intended fresh milk and other enumerated item as one and the same, then there would be no need for enumeration of recombined milk and milk drink with or without addition thereto for being sold as beverage. Thus, when the exemption notification contemplated fresh milk as well as recombined milk as subject matter of exemption, it stands to reason that the State had fully understood the difference between the fresh milk and recombined milk and the process involved in bringing out a commercially different product, namely, recombined milk. 15. In the decision reported in (2009) 20 VST 276 (Allahaba Dugdh Utpadak Sahkari Sangh Limited V. Commissioner, Trade Tax, U.P.Lucknow), the Allahabad High Court pointed out the different types of milk as different commercial commodity on the strength of the notification granting exemption to milk. The High Court held that art ..... X X X X Extracts X X X X X X X X Extracts X X X X
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