TMI Blog2014 (5) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... g by Section 3(3), there is no hesitation in holding that the assessee is entitled to concessional rate of tax as given u/s 3(3) of the Act - The relevancy or otherwise of the Sixth Schedule, hence, loses its significance in the matter of considering the claim for concession - Even though timber was brought under the Sixth Schedule during the assessment year 1994-95, for the reasons already stated, such amendment does not stand in the way of considering the claim of the assessee; that even assuming for a moment that veneer is a timber falling under the Sixth Schedule, in the absence of any restriction to be read in the first part of Section 3(3) viz., 'in respect of sale of any goods', there is no hesitation in allowing the contention of the assessee – It is held that the goods dealt with by the assessee could not be called as timber - A mere look at the material produced before us shows that it is only a scrapped material which is under commercial parlance, called veneer to be used at the top of the plywood that had been sold by the assessee - Given the fact that the timber and veneer are commercially a different goods and that the entry in the Sixth Schedule contemplates "timber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlance, they are called as core veneer. They are used as an input between the face veneer to constitute the thickness of plywood. Since veneer is used on both sides of the plywood while manufacturing the same, by no stretch of understanding, veneer could be termed as timber and timber could be termed as veneer. He pointed out that selected species of hardwood are put on peeling lathe machines, and at certain speed, these logs are rolled on the peeling lathes and the gears are adjusted to get a particular thickness of the layer of sheet from the hardwood logs. The thick sheet is called face veneer used on both sides of the plywood. The maximum thickness of the veneer would go upto 1 mm. After peeling, the rest of the wooden logs having more than 1 mm thickness is called core veneer. This is used as an input between face veneer to constitute the thickness of the plywood. Consequently, the question of bringing it under the VI Schedule to reject the claim of the assessee, did not arise. 3. Learned Government Advocate, in support of the order passed by the authorities below, submitted that the assessee is not entitled to claim concessional levy as regards veneer and the same has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Part 'C' Entry 47, taxable at 8%. 6. On going through the above provisions of the Act, it is clear that during the relevant assessment year 1994-95, all that Section 3(3) of the Act read was that concessional levy was available with reference to sale of any goods for use in the manufacture of any goods mentioned in the First Schedule other than those falling under item 56 Part D of the First Schedule. Only on and from 17.7.1996, under Act 13 of 1996, the exclusion of goods falling under the VI Schedule, particularly to Item 1 from being considered for the claim of concessional rate, was brought under Section 3(3) of the Act. Leaving this aside, a reading of the said Section shows that the concessional levy under Section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 is available in respect of tax payable by the dealer on the sale of any goods, including consumables, packing material and labels, but excluding plant and machinery. The second condition for qualifying the concessional levy under Section 3(3) of the Act is that the goods sold have to be used by the purchaser for the manufacture, assembling, packing or labelling in connection with such manufacture inside the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al rate of tax at 3% is available to sale of any goods. As far as this part is concerned, there is nothing to read from Section 3(3) of the Act that the Legislature intended to restrict the applicability of the provision to the sale of only those goods falling under the First Schedule for the purpose of use in the manufacture of goods. On the other hand, the restriction on the claim for concessional levy is with reference to the sale of goods manufactured, using the materials purchased at a concessional rate . That is, the goods manufactured are to be those falling under the First Schedule other than Item 56 in Part D of the First Schedule and arrack. Thus, if these two conditions are satisfied, an assessee selling goods for use in the manufacture would be entitled to claim a concessional rate of tax under Section 3(3) of the Act. In considering any goods for sale to be used in the manufacture of goods, one need not trouble to find whether these goods fall under the First Schedule or under the Sixth Schedule. A reading of Section 3(3) of the Act shows that the tax payable by a dealer in respect of sale of any goods including consumables, packing materials and labels other than capi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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