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TMI Blog2014 (7) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... ng farm implements. The sale of farm implements is exempted from tax whereas the residue sold after making farm implements is taxable. The dispute in the present revisions is regarding levy of entry tax under the provisions of the U.P. Tax on Entry of Goods Into Local Areas Act, 2007 (hereinafter referred to as "the Act") on the rail line scrap purchased and brought into the local area by the dealer. Section 4 of the above Act provides for the levy of tax and stipulates that the goods specified in the Schedule to the Act on being brought into a local area for consumption, use or sale from any place outside the local area shall be subjected to entry tax at the rate specified but not exceeding 5 per cent. of the value of the goods. Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom entry tax as per the amended entry 14 of the Schedule to the Act. The authorities including the Tribunal have held that the material described as "iron scrap" purchased by the dealer is one which falls under clause (xvi) of section 14(iv) of the Central Sales Tax Act, 1956 for the following two reasons: (i) it is not a waste material as it is being reutilised as a raw material for manufacturing of farm implements by the dealer; and (ii) in the tax invoices and form 38, it has been described as rail (defective/rejected) and as such is not a waste material. Clause (xvi) of section 14(iv) of the Central Sales Tax Act, 1956 reads as under: "defective, rejects, cuttings, or end pieces of any of the above categories." In view of above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir Lordships of the Supreme Court, while dealing with the dictionary meaning of the word "scrap" concluded that small pieces or something left over after the greater part has been used especially metal discarded for reprocessing is a scrap. It is common acknowledge that "scrap" is something which is a waste and discarded material or a material which has been worn out or has been declared as useless. Generally, the person filling form 38 and making tax invoices are not technical persons, who may be able to make a distinction between scrap and defective/rejected material and the impact of mentioning it incorrectly. Therefore, the mere entry of the material in form 38/tax invoice as rails (defective/RE) would not be sufficient and conclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te material. This has been done basically on the strength of the two orders of this court dated May 5, 2011 passed in Writ Tax No. 664 of 2011 and 661 of 2011 (Eagle Agro Industries v. Deputy Commissioner and Rustam Agro Industries v. Deputy Commissioner). In both the aforesaid cases the question which had arisen for consideration was whether the material involved was a iron scrap covered by the notification dated September 29, 2008 as amended by notification dated January 15, 2009 but the court instead of entering into that controversy disposed of the writ petition without deciding it on the ground of remedy of an appeal. The court specifically said that it has not been called upon to decide the issue which has been raised. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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