TMI Blog2010 (11) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... s 7(1)(a) and 7(1)(b) - While Section 7(1)(a) deals with the dealers of gold/silver ornaments or wares, Section 7(1)(b) deals with mechanised 'crushing units' producing Granite metals. Thus, the benefits contemplated under Section 7(1)(b) is with reference to the 'unit' and not otherwise - AO has no case that, the assessee is not running a mechanized crushing unit producing granite metals and in fact has granted compounding benefit, however confining it to the 'main product' 'Granite metal' alone; while the M-sand (by-product) is sought to be reckoned under the residual entry, imposing higher rate of tax; which has been rightly interfered by the Tribunal. The finding of the Tribunal that the benefit of compounding has to be given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product' (granite metal) as well as to the 'by-product' (M-sand) after turning down the contention raised from the part of the Revenue, that the assessee could have compounded the tax only in respect of the 'main product' and not the 'by-product'. 2. The issue pertains to the assessment year 2003-04. The assessment was completed by the assessing authority, granting the benefit of compounding sought for from the part of the assessee, only in respect of granite metals (entry No. 70 as given in the schedule), while the by-product i.e. M-sand was reckoned as the residual entry and thereby the benefit of compounding was rejected to the same, fixing and demanding a higher rate of tax. Being aggrieved of the said ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned under Section 7(1)(b) for providing the benefit of compounding is 'Granite metal' and there is no reference to 'M-sand' and this being the position, the assessment order passed by the assessing authority and confirmed by the appellate authority are within the four walls of the law, which ought not to have been set aside by the Tribunal. 6. In this context, it is necessary to look into the different situations contemplated under Section 7, so as to understand and appreciate the scheme and provisions providing the benefit of compounding. Section 7(1)(a) reads as follows: 7. Payment of tax at compounded rates.--(1) Notwithstanding anything contained in sub-section (1) of Section 5. (a) any dealer in gold or sil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of this subsection opens a new branch during a year, such branch shall be treated as if it were an independent place of business and the provisions of this sub-section shall apply to it accordingly] Going by the entire contents of Section 7, it is obvious that, the said provision has been incorporated in the statute book as an alternative measure for realization of the tax, instead of undergoing the ordeal with reference to the charging provision under Section 5. It is also pertinent to note that, such benefit of compounding is not open to all sectors, but the same stands confined to 'two' different situations/units, as taken care of by Sections 7(1)(a) and 7(1)(b). While Section 7(1)(a) deals with the dealers of gold/sil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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