TMI Blog2018 (11) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured sand produced by dealers engaged in the production of granite metals who have opted for compounding based on the specification in Sub clause (i) to (iv) of Clause (b) of Section 8. There is no reference to an inferior quality or negligible quantity of M-Sand which alone stands exempted. It cannot also be said that the M-Sand procured from the VSI/HSI are not produced by the machines referred to in Section 8(b). Section 8(b) is very clear and indicates compounding fee only on the specific machines provided there under with respect to a dealer producing granite metals. True, the legislature never contemplated the introduction of vertical or horizontal shaft impactors for the purpose of producing M-Sand from the granite metal prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the year 2014-15 as also (iii) the judgment of a Division Bench reported in 2011 (4) KHC 876 [ State of Kerala V. Poabs Granits P.Ltd.] found the dealers to be not liable to be separately assessed for the M-Sand produced by VSI/HSI, for the relevant period. 3. The learned Special Government Pleader has put forth compelling arguments in challenge of the findings of the learned Single Judge. It is pointed out that Poabs Granites P.Ltd.(supra) was in the general sales tax regime and has no application to the KVAT Act. It is also argued, on a reading of Section 8(b) that only dealers producing granite metals would be entitled to compounding under the provision. Hence any other product distinct from granite metal would not be covered un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 8 has been extracted by the learned Single Judge in the judgment and we deem it appropriate that the proviso alone be extracted herein. Provided that in the case of dealers, who opted to pay compounded tax under this clause, no separate assessment shall be made in respect of [Manufactured sand} produced by them. 6. The proviso clearly exempts manufactured sand produced by dealers engaged in the production of granite metals who have opted for compounding based on the specification in Sub clause (i) to (iv) of Clause (b) of Section 8. There is no reference to an inferior quality or negligible quantity of M-Sand which alone stands exempted. It cannot also be said that the M-Sand procured from the VSI/HSI are not produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e compounding fee was provided; would not by such user alone make liable the dealers for a separate regular assessment on the M-Sand produced by such machines in the crusher units; which units have admittedly opted to pay tax under the compounding scheme. We specifically notice the proviso extracted above, which speaks of dealers who opt under the compounding scheme, to be not liable to separate assessment in respect of Manufactured Sand produced by them; ie: produced by the dealers or the specific units. If, as contended by the learned Special Government Pleader the exemption was with respect to the M-Sand produced by the machines referred to in Section 8(b) ie: the primary and secondary crusher machines, then the exemption would have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Due to scarcity of river sand, the new product called manufactured sand, produced by crushing granite stones, is currently being used widely in construction. As per the present provision, a compounded quarry producing granite metals need not pay any tax for quarry dust, a bye-product in the process. Taking advantage of this exemption, many units which primarily produce manufactured sand using dedicated machines, are claiming tax exemption in case of manufactured sand, causing tax loss to the Government. In order to curtail this, it is proposed to introduce a separate compounding provision for manufactured sand. To study the practical issues involved in this matter, a special committee consisting of the Officers of Commercial Taxes Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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