9911796707
TMI Blog1970 (11) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Sales Tax. The opponent M/s. Bharat Iron and Brass Foundries, Ahmedabad, is a firm which purchases materials such as unserviceable machinery, its spare parts, iron and steel scraps, pig iron, etc., for being melted and also for manufacturing castings after melting them. The opponent-assessee was assessed for the period from 1st April, 1963, to 31st March, 1964, for the purpose of levying sales tax. During the course of the said assessment, the assessee claimed setoff contemplated by rule 41 of the Bombay Sales Tax Rules (hereinafter referred to as the "Rules") on the ground that it has paid taxes on the purchase of unserviceable machinery and spare parts, which are used in melting and preparing castings. According to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a certificate, under section 12 of the Act, provided that such goods are used by him in the manufacture of taxable goods for sale or in the packing of taxable goods manufactured by him for sale." 5.. It is apparent from the above clause of rule 41 that the set-off in question would be available to the assessee only if his case falls within any of the entries of different schedules specifically mentioned in the clause. 6.. Now the case of the department is that the assessee would not be entitled to claim any set-off of the tax paid by it at the time of the purchase of the articles in question because these articles being iron and steel scraps, are covered by entry 3 of Schedule B of the Act. The contention of the department is that since c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from time to time in section 14B and in Schedules A, B, C and D and in the preceding entries." Obviously, this entry is a residuary entry and, therefore, if the goods in question are not covered by any of the preceding schedules, i.e. Schedules A, B, C and D as well as other entries specified in Schedule E, then they would be covered by this residuary entry. 10.. It is thus an admitted position that if the goods on which the assessee has paid tax at the time of purchase are covered by the abovereferred entry 22 of Schedule E, the assessee would be entitled to claim the set-off in dispute. However, if the goods are covered by the above-referred entry 3 of the first part of Schedule B, then no such set-off can be claimed by the assessee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as the first requirement is concerned, we find that at no stage of the proceedings before the Sales Tax Officer, Assistant Commissioner or the Tribunal, it was contended that the goods in question were not made of iron and steel. The only contention which is found to have been raised by the assessee before the lower authorities as well as the Tribunal was whether they amounted to "scrap" or not. Under the circumstances, we propose to decide this reference on the hypothesis that the goods were of iron and steel. If that is so, the only question which we are called upon to consider is whether they amounted to "scrap" as contemplated by entry 3. On this question Shri Pathak, who appeared on behalf of the assessee-opponent, contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention is not acceptable because one of the dictionary meanings of the word "scrap" is that it is a discarded metal in the form of a machinery and suitable only for the purpose of reprocessing. Reprocessing here refers to the word "metal" and, therefore, the use to which it can be put is the use as a "material" for the purpose of reprocessing or manufacturing some other article. As a matter of fact, the old machinery and its spare parts, which have been purchased by the assessee, are actually used by the assessee itself for melting and recasting. They have been sold also like that by the vendor of the assessee. It is an admitted fact that these articles have been purchased and sold on the basis of their weight and not on the basis of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery and spare parts on which the assessee is found to have paid tax, at the time of their purchase have actually been put to use as metal and not as machinery because it is an admitted position that they have been melted and recast. Under the circumstances even applying the common parlance test, machinery which is totally unserviceable as machinery can be treated as scrap. 14.. Shri Pathak wanted us to consider whether such unserviceable machinery can form part of inter-State trade or commerce and, therefore, can be covered by Schedule B. Here it should be noted that Schedule B consists of those goods which are found to be of importance in inter-State trade or commerce and it was for this reason that Shri Pathak has advanced the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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