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2014 (8) TMI 859 - HC - VAT and Sales TaxClassification of goods - Road marking points/material (RMP) - Apcomark and Thermoline - Rate of tax 4% or 12.5% - Period April, 2005 to March, 2006 - Held that:- It is not in dispute that Aliphatic Petroleum Hydrocarbon Resin chemical occupies 20% of the RMP and the other four components/chemicals including glass beads occupy major portion of the fluid paste. The test report shows what are the characteristics of each of the chemicals and for what purpose they are used in making the final product RMP. The report also shows that RMP cannot be made or given desired effect in the absence of any of the chemicals. It is, in this backdrop, if we apply Rule 3(b) of the Rules and go by the test of essentiality, the RMP, in our opinion, cannot be classified as petroleum resins and it cannot be stated that the said petroleum resin gives its essentiality character to RMP. - decision of assessee own previous case [1988 (3) TMI 61 - SUPREME COURT OF INDIA] followed - Decided against the assessee. Classification of goods - Colour world machine comprising of tinting machine, computer and UPS - Period April, 2005 to March, 2006 - Held that:- The Tribunal has not taken into consideration that the Department levied tax @ 12.5% only when all three machines, which are inseparable or indispensable, are sold as one single unit. As observed earlier, Computer (CPU) cannot be separated from the machine and it is inbuilt and therefore, it cannot be treated as different from the tinting machine. It is not in dispute that the tinting machine cannot be operated without computer and UPS, and that they are indispensible parts of tinting machine and, therefore, all three together deserve to be treated as one single unit and liable to be taxed at 12.5%, as unclassified item under Section 4(1)(b) of the KVAT Act. - Decided against the assessee. Taxable turnover - inclusion of Freight charges collected - Period April, 2005 to March, 2006 - Held that:- it may be true, the freight incurred by the assessee, becomes a part of the amount for which the goods are sold to the buying dealer/distributor. The assessing authority overlooked that the freight charges were not separately collected by the assessee and they were a part of the price of the goods. The Tribunal, in our opinion, has rightly held that the assessee has included freight charges with the consideration amount of goods. We do not find any reason to interfere with the finding of fact. - Decided against the revenue. Disallowance of assessee's claim towards "sales returns" - Whether since assessee had properly maintained all documents insofar as sales returns were concerned and produced same on record, assessee's claim deserved to be allowed - Held that:- It may be difficult for the department to cross verify every entry but, it was possible for the department to cross-check atleast one or two entries so as to find out whether the material placed on record by the assessees in support of their case of return of goods was genuine. On the other hand, the Tribunal has, after assessing the entire material on record, recorded a categoric finding that all the documents insofar as sales returns are concerned have been properly maintained by the assessee as provided for in law and answered this question in favour of the assessee. The department has not made out any case so as to interfere with this finding of fact and we are not inclined to interfere with the same - Decided against the Revenue.
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