9911796707
TMI Blog1998 (9) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioner purchases methyl alcohol from different distilleries and also from the open market and dilute the same by adding water in an exact proportion, i.e., 43.8 volumes of methonol and 56.2 volumes of distilled water at a temperature of 16.60° F and 10.0° C or alternatively, a minimum of 36 per cent and a maximum of 38 per cent by weight of methonol in water. According to the petitioner, the said mixture of methonol and water is used for specific purpose for taking off of the aeroplanes. Such water is tested in laboratory for strict adherence to quality and proportion thereof at a particular temperature. By the said process a new product comes into existence which is used only for aviation purposes. The said product au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleased to hold that methonol mixed with distilled water in certain proportion, tested in the laboratory and sold it for specific purpose of using it as a power augmentation to it mainly in aeroplane engines for the purposes of take-off brings into existence a new product commercially and that should be considered manufacturing of a new product. 5.. Mr. Bharat Ji Agrawal cited another decision in the case of Commissioner of Sales Tax v. Chandausi Chemicals, Moradabad 1984 UPTC 1278 where the distilled water used in injection is considered to be a new product and not water simpliciter. 6.. I have considered the submissions of the revisionist and the respondent carefully. The Bombay decision (Commissioner of Sales Tax v. Indian Oil Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax under the State law whereas the rectified spirit is taxable under the Central Act [AIR 1997 SC 1208 (Bihar Distillery v. Union of India)]. The nature character and use of a particular item is changed by mixing the same with water and a new product is born. The same cannot be said to be the same old undiluted product. Dilution of product makes it altogether different. As such taxable liability of the petitioner's product will fall under the heading as "unclassified item" and not under the heading of "methyl alcohol".
7.. In the result, the revision succeeds and is allowed. The order passed by the Tribunal dated March 29, 1990 is hereby set aside. There will be no orders as to costs.
Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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