TMI Blog2010 (1) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the petitioned initiating a suo motu revision on the basis of audit query. On the same date another notice was issued directing the petitioner to pay tax at four per cent on the sale of metal scraps even before any order was passed in the suo motu revision. Aforesaid notices were challenged in R.N. 445 of 2008 before this Tribunal. By order dated August 28, 2008 this Tribunal set aside those notices and quashed sou motu revisional proceeding on the ground that the revisional authority should apply his independent mind and record his own prima facie satisfaction before initiation of such proceeding. It was held in the said order that the language of the proposed order indicated a closed mind. This Tribunal, however, gave liberty to the respondents to proceed afresh in accordance with law if they so desire. Thereafter, the Assistant Commissioner of Sales Tax issued a fresh notice dated October 29, 2008 in form 55 proposing to revise assessment order for the period 2002-03 on the ground that in view of the eligibility certificate obtained by the petitioner, it was not entitled to get exemption on sales of scraps. The petitioner has challenged the said notice and the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Aryan Zinc Products v. Commercial Taxes Officer, Special II, Jodhpur [2000] 119 STC 443 (Raj), judgments of the Madras High Court in JBM Sungwoo Ltd. v. State Industries Promotion Corporation of Tamil Nadu Ltd. [2007] 6 VST 527 (Mad) and in Commercial Tax Officer, Thirupparangundram Assessment Circle v. Thiagarajar Mills Ltd. [2004] 134 STC 58 (Mad) and a judgment of the Patna High Court in Ambe Agro Indus tries Ltd. v. State of Bihar along with Bhawani Flour Mills Pvt. Ltd. v. State of Bihar [2003] 131 STC 276 (Patna). In Aryan Zinc Products [2000] 119 STC 443 (Raj), the Rajasthan High Court was considering whether iron scraps obtained in the process of manufacturing goods from iron sheets could be treated as goods manu factured in the unit. The Rajasthan High Court has held therein (page 445 in 119 STC): . . . It cannot be doubted that activity which is carried on by any manufacturer is that of obtaining a particular goods as a principal manufacturing item. However in the process of manufacture of that article he obtains many things as a by-product which are incidentally obtained or can be termed as an adjunct of his manufacturing activity. Nonetheless such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected or separated before putting those into manufactur ing process may sometimes be loosely called scraps but those cannot be obviously be treated as manufactured items/products. What we consider as scraps in this judgment are those pieces or portion of some raw material which are left out at a particular stage or stages in the process of manufac turing the main products. These scraps are no longer treated as the same raw material as it was before being put into the manufacturing process and those cannot be used for the purpose for which those were originally purchased. Those get new form, new shape, new use and acquire identity of a separate kind of marketable goods having a different sale value in the market. The respondents have contended that scraps cannot be treated as manufactured product because manufacturing is something more than mere processing. The Supreme Court in Union of India v. Delhi Cloth and General Mills Co. Ltd. AIR 1963 SC 791 has approvingly quoted a passage from an American judgment and pointed out: Manufacture implies a change, but every change is not manu facture and yet every change of an article is the result of treatment, labour and manipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he is entitled to any higher benefit he should move the appro priate authority for modification or rectification of the eligibility certificate. Mr. Chakraborty, learned advocate for the petitioner, has referred to the provisions contained in section 39 of the 1994 Act and rule 55 of the West Bengal Sales Tax Rules, 1995 and submitted that the aforesaid provisions having provided for exempting all goods manufactured in the concerned industrial unit from payment of tax, appropriate authority cannot be permitted to curtail such statutory right by specifying any particular item of product. Section 39 and rule 55 have set maximum extent of benefit an eligible dealer is entitled to get. A dealer is required to obtain eligibility certificate for obtaining the benefit of exemption. Eligibility certificate specifies the extent of benefit within the maximum allowable extent, which are made available to the dealer. If any dealer is not satisfied with any of conditions specified in the eligibility certificate he should seek enlargement of his rights in terms of the provisions of section 39 and rule 55. So long as the eligibility certificate specifically mentions the product which is to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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