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TMI Blog1996 (8) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... types of chemicals, lacquers, etc., which are used for tanning, treating and/or polishing leathers. Such leather chemicals are not notified under either the 1954 Act or under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act"). The applicant has been granted registration under both the 1941 Act as well as the Central Sales Tax Act, 1956. The applicant placed orders for two types of leather chemicals, viz., "Matt-Top" and "Icasolv-TL-460" on their manufacturer M/s. Haryana Leather Chemicals Limited who despatched the materials in two different consignments. Since the commodity imported by the applicant was nothing but leather chemicals and had no nexus with the 1954 Act, there was no question of obtaining permits for them. The respondent No. 1 seized both the consignments when they arrived at the Duburdih check-post. The first consignment was seized on November 30, 1994 and the second one on December 1, 1994. The applicant met the respondent Nos. 1 and 2 at Duburdih and submitted that the items that were being imported by him were purely leather chemicals and could not be equated by any means with "paints" and/or "lacquers". The applicants also contacted the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the aforesaid notification will be treated as included in the term "paints of all kinds" only when those are used as paints. The items imported by the applicant are purely leather chemicals used in the leather industry. These commodities have no application whatsoever as paints. The concept of leather chemicals is not new. The item is extensively used in the leather industry. The items imported by the applicant have been identified and prescribed as such by the Central excise authorities who have categorised the same under "Tariff item numbers 3210.90 and 2308.30". If the aforesaid items had been used as paints, the said authority would not have declared these as leather chemicals. The items imported by the applicant have been identified as leather chemicals by the Ministry of Industry, Government of India and the Sales Tax Authority of Haryana Government, as would be evident from the industrial licence and exemption certificate granted by these two authorities to the manufacturer M/s. Haryana Leather Chemicals Limited. 5.. The applicant has approached the Tribunal for declarations as mentioned earlier, as he needs to import such leather chemicals regularly and unles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sales tax permit. There was no harassment of the petitioner and the respondents have acted in accordance with provisions of law. In their affidavit-in-reply the applicant has reiterated his case. 7.. Mr. M.L. Bhattacharjee, learned advocate for the applicant, argued that the items imported by the applicant cannot be considered to be "lacquer" as it is used only in the leather industries and has no relationship with paints. The registration certificate of the dealer shows that he is a reseller in respect of leather chemicals and he has imported only leather chemicals. The industrial licence of the supplier which has been issued by the Government of India in the Ministry of Industry also shows that the supplier would manufacture only leather chemicals. A letter from the supplier M/s. Haryana Leather Chemicals Limited (annexure "D") also mentions that the industrial licence "categorically states that we are manufacturers of leather chemicals, and we have no licence or plant to manufacture any other chemical (Ref. annexure 2)". The letter from the supplier also refers to the sales tax exemption certificate "which clearly states that we are manufacturer of leather chemicals and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the material imported by the applicant is not "lacquer" as included in the notification dated March 29, 1994, but is only a leather chemical. 8.. Mr. M.C. Mukhopadhyay, learned State Representative, argued that from the documents supplied by the applicant it is quite clear that lacquer has been imported by him. This lacquer is admittedly used for finishing the top coat of leather. The meaning of the term "lacquer" can be seen from the Webster's Encyclopaedic Dictionary to be a protective coating consisting of a resin, cellulose ester, or both, dissolved in a volatile solvent, sometimes with pigment added. Therefore, there is no doubt that the material imported by the applicant is lacquer falling within the scope of the definition of the notification dated March 29, 1994. He also argued that the use of the word "including" extends the meaning of that word. The definition does not exclude lacquers used in leather industry. For the purpose of assessment of tax what is relevant is the type of material that has been imported and whether the material imported is specifically referred to in the registration certificate of the dealer is not really relevant for the purpose. In his ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be seen that the term "leather chemical" also admittedly includes lacquers. The certificate issued by the Central Leather Research Institute merely states that "the products, viz., Icasolv-TL-460 and Matt-Top, as declared by you are normally being used in leather industry as a top finishing material". This certificate was issued in response to the supplier's letter dated October 31, 1995 to the Director, Central Leather Research Institute, Calcutta, wherein it has been mentioned that "the sales tax authorities need clarification from your end that the mentioned products are for use in leather industry only". It may be mentioned that this is not an accurate statement of the position of the revenue in this case. It is the applicant's case that the imported items are used only in the leather industry and, therefore, are exempt from sales tax. The stand of the revenue is that irrespective of use, the item is exigible to tax if it falls within the definition of lacquer. However, the Central Leather Research Institute certificate merely refers to the fact that normally these items are being used in leather industry as top finishing material. This, however, is obvious from the techni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dard Glossary of Terms Relating to Paints it will be seen that "paint" and "lacquer" are different commodities as understood in the paint industry and hence the correct interpretation of the notification would be to hold that the inclusive part of the definition of "paints of all kinds" ends with "acrylic and plastic emulsion paints". Otherwise "lacquer" will stand included in the expression "paints of all kinds" when it is clearly a different commodity. Lacquer is a goods specified in the notification. The notification has not qualified the word lacquer by any means. That being so, all kinds of goods which are lacquer are also obviously covered by the notification irrespective of their end-use. The main point argued before us on behalf of the applicant is that this particular item is specially used in leather industry as a chemical but such use cannot take the item out of "lacquers" mentioned in the notification. 11.. It is admitted that the applicant has imported "Matt-Top" and "IcasolvTL-460" into West Bengal. In the commercial literature of the supplier relating to Matt-Top it has been mentioned that "it is used alone or with the other lacquers to achieve required dull effec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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