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2021 (2) TMI 958 - HC - VAT and Sales TaxClassification of goods - rate of tax - Brass fittings i.e., Elbow, Tee, Socket, Union, Hex Nipples, Hose Colour, Pillar tap Inner fittings, etc. - Bib Cocks Brass or C.P., Brass Ball cock, brass Long body Bib cock C.P., Brass Short Body Bib Cock C.P., Brass Sink Cock C.P., Brass Angle Cock C.P., Brass Wall Mixers C.P., Brass Showers C.P., Brass shower Arm C.P., Brass Foot valve, etc - taxable at the rate of 12.5% or to be treated as items coming under Entry 3(2) of Third Schedule of the KVAT (Amendment) Act, 2005 and taxable at the rate of 4%? - Validity of Clarification under Section 94 of the KVAT Act, 2003 - HELD THAT:- Chapter 74 deals with “Copper and articles thereof”. The Note at the beginning of the Chapter says that it would take in alloys of copper also. Several items of copper are dealt with under different four digit HSN Codes bearing Nos. 7401 to 7419. HSN 7418 specifically deals with sanitaryware and parts thereof of copper. The four digit code HSN 7419 says other articles of copper. From the use of the word ‘other’ in the heading of HSN 7419, it is amply clear that it refers to articles which are not mentioned elsewhere. When it comes to HSN 7419.99, again it is shown as ‘other’, so as to mean that the items mentioned subsequently are not items specified earlier. Therefore, HSN 7419.99.30 with which Entry 3(2) of the Third Schedule of the Act is aligned, cannot be deemed to include the specific products of the assessee being taps, valves and other fittings made of brass which also are used as sanitary-wares, especially for reason of the items mentioned under HSN Codes 7412.20 and 8481, 8481.80 and 8481.80.20 - Chapter 74 of the Explanatory Notes that specific items of copper and its alloys have been identified in eight digit HSN Codes. For example, HSN 7418.10.21 refers to utensils of brass. So also HSN 7418.20.10 refers to sanitaryware of copper. It can be seen that though sanitaryware of brass is not specifically mentioned the products dealt with by the assessee comes under the above extracted entries of 7412 and 8481. When we look at Entry 3(2) in Third Schedule, it can be seen that it does not take in all articles of brass. Entry 3 going by the heading takes in only such articles and other utensils of aluminium, brass, bronze, copper, etc. other than those specified in any other Schedule of the Act. HSN Code 7419.99.30 to which Entry 3(2) of the Third Schedule is aligned, speaks of “Articles of brass” under HSN 7419.99 with heading “Other” which takes in only those Articles not mentioned elsewhere - Thus this part answered against the assessee and in favour of the Revenue. HSN Codes - HELD THAT:- The products of the assessee though can be used as sanitarywares, also are used in general water supply and are covered under the various HSN codes as tubes or pipe fittings, taps, cocks, valves and similar appliances for pipes respectively coming in HSN Codes 7412 & 8481 - The products dealt with by the assessee cannot be covered as sanitaryware under 7418.20.10. The answer however does not interfere with the tax effect of the products which we have held to be covered, otherwise, under the SRO itself. The inclusion of the products under Entry 101 does not fall foul of Annexure-D judgment, since we found that it does not declare specifically as to under which entry the brass products of the assessee fall. Appeal dismissed - decided against appellant.
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