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2022 (7) TMI 1271 - HC - Income TaxTax Collection at Soruce (TCS) - Addition u/s 206C(6)/206C(7) - Tribunal held that Swan timber is different from timber when there is no distinction drawn under Section 206C except in the case of timber obtained under forest lease - liability under Section 206C of the Act does not arise in case of traders in Sawn timber - HELD THAT:- The effect of the said provision continue to remain the same even after the amendment in the year 2003 wherein the proviso stood substituted. However, this condition was inserted by way of sub-Section (1A) of the Act which states that notwithstanding anything contained in sub-Section (1) of Section 206C(1), no collection of tax shall be made in the case of a buyer who is a resident in India and if such buyer furnishes to the person responsible for collecting tax, a declaration in writing to the effect that goods referred to in Column 2 of the table contained under Section 206C(1) are to be utilized for the purposes of manufacturing, processing or producing articles or things and not for trading. Thus, if the timber is being sized, sawn into logs of different dimensions and shapes in activities carried on saw mills authorised by the Government, it would amount to a different produce. Even in respect of timbers which are procured as described in table, if it is used in the process of manufacturing, the provision of Section 206C(1) of the Act would not be applicable due to the fact that the product ceased to be a forest produce. As mentioned earlier, the facts in the case of Y. Moideen Kunhi & Ors. (1985 (11) TMI 58 - HIGH COURT OF KARNATAKA AT BANGALORE] are different from the case on hand as the question in the said case was whether sawing of timber logs into different sizes, planks, beams would amount to manufacture within the meaning of Section 2(f) of the Central Excise and Salt Act, 1944. In the instant case, we are considering the effect of a special provision namely, Section 206(C) of the Act and the said decision cannot be applied to the case on hand. For all the above reasons, we agree with the ultimate conclusion arrived at by the tribunal in dismissing the appeal filed by the revenue but for the reasons assigned by us in the earlier paragraphs. In the result, the appeal filed by the revenue is dismissed.
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