2009 (2) TMI 791

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..... ze, etc., which after manufacture are sold in sheets, circles, rounds and as utensils. The respondent claimed exemption on the sale of metal in various forms and on sale of utensils on the ground that such sales are second sales because scrap metal purchased by them from out of which products are made have suffered tax in the State. In the first round of litigation this court felt that the Tribunal has not taken into account the relevance of entry 121 of the First Schedule which provided for separate rate of tax on metal scrap other than those covered under the Second Schedule. However, even after remand by this court, the Tribunal confirmed its earlier order declaring eligibility for second sale exemption for the respondent against which t .....

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..... espondent has claimed that identity of the item purchased is not lost in the manufacture or processing and the same is accepted by the Tribunal, we have to necessarily examine the scheme of taxation with reference to entries contained in the First Schedule. It is clear from entry 121A above referred to that metal scrap is identified by the Legislature in two groups, one falling under the Second Schedule which is essential steel scrap of various types. Metal scraps other than those falling under the Second Schedule are covered by entry 121A of the First Schedule to the KGST Act which is taxable at the point of first sale in the State. In other words, in the absence of such an exclusion clause in entry 121A it is clear that the specific entri .....

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..... nganese, brass, bronze, magnesium, etc., are covered by entry 121 of the First Schedule which provide for tax on "metallic products" because the specific entries providing for the rate of tax on these items of metals cover only metal as such whatever be the form in which it is sold and not products made out of such metal. We therefore hold that the metal produced by the respondent in the form of sheets, rounds, circles, etc., from out of scrap metal cannot be treated as the raw material, viz., scrap purchased by them by paying tax. On the other hand the metal recovered from scrap purchased is a different product taxable at the relevant entries referred above. In fact utensils are a final product made out of metal recovered in various forms .....

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