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2019 (5) TMI 1167 - HC - VAT and Sales TaxClassification of goods - narrow woven fabric labels - classified under heading '58.06' of the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 or not - exemption from sales tax under Entry 11 of Part A of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959 - case of the Respondent is that the exemption applies to narrow woven fabric, which is classified under heading 58.06 of the Additional Duties of Excise Act but not to woven labels, which are classifiable under heading 58.07 of the Central Excise Tariff Act, 1944. HELD THAT:- On perusal of Entry 11 of the Part A of the Third Schedule of the Tamil Nadu General Sales Tax Act, it is clear that narrow woven fabrics of silk, wool, cotton or man-made textile materials (produced or manufactured in India) as described in column (3) against the heading '58.06' in column (1) of the First Schedule to the Additional Duties of Excise Act were exempted from sales tax. The position is confirmed by clarification dated 13.02.2001, where it was held the clarification already issued in this office reference D.Dis.Acts Cell II/65536/2000 dated 13.10.2000 and D.Dis.Acts cell II/76081/2000 dated 30.10.2000, treating the product as falling under Entry 67 in Part-D of the First Schedule to the TNGST Act, 1959, taxable at 11% is hereby cancelled - Thereafter, by the subsequent clarification dated 18.05.2001 read with erratum dated 29.10.2001, it was also clarified that both settled cases and pending cases, in respect of narrow woven fabric labels, would be decided as per the clarification dated 13.02.2001. The question arises as to whether the assessing officers are bound by the clarifications issued under Section 28A or whether they can deviate there from - The above question is no longer res integra and was decided in several judgments. For instance, in PAPER PRODUCTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [1999 (8) TMI 70 - SUPREME COURT], it was held that instructions/clarifications issued under Section 37B of the Central Excise Act, 1944, which is broadly similar to Section 28A of the TNGST Act, are binding on the assessing officer. In the instant case, it is evident that the re-assessment proceedings were initiated in disregard of the clarifications dated 13.02.2001 and 18.05.2001 read with the erratum thereto dated 29.10.2001. The text of clarification dated 13.02.2001 underscores the fact that earlier clarifications classifying the product under Entry 67 in Part D of the First Schedule to the TNGST Act were expressly cancelled whereas the assessing officer does precisely the converse. It is further evident that this was done largely on the basis of audit objections. Petition allowed.
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