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TMI Blog2012 (2) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the Joint Commissioner exercising appeal jurisdiction is erroneous for the reason that the dealer/assessee who had claimed certain sales in respect of what is known as moulds manufactured by it for the purpose of manufacturing a product which was exported to the foreign buyer and which was claimed as an export sale insofar as manufacture of mould is concerned, for which the dealer had received payment in advance called as "tool development charges" amounts to a sale transaction attracting section 4 of the Act for the reason that the goods, i.e., the moulds were never actually exported, but remained with the dealer. 3. The second question is, as to whether the permanent wire tightener manufactured by the assessee is one classifiable within the scope of entry No. 67 of the Third Schedule to the Act as aluminium extrusions or if it is not so fitting into this entry, it has to be subjected to tax as residuary entry taxable at the general rate of tax in terms of section 4(1) (b) of the Act. 4. It is because the Commissioner took the view that the value received by the dealer from its foreign business associate amounted to sale price of the moulds and being not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment by way of "tool development charges", there being no physical delivery of goods or movement of the goods from the premises of the assessee to the foreign buyer or any one else, legally also there cannot be a transaction in the nature of sale and the amount received by way of tool development charges from the foreign buyer cannot be characterised as sale price of any product. 7. In support of his submission Mr, Shankare Gowda, learned counsel for the assessee, places reliance on a judgment of the Division Bench of the Madras High Court in the case of State of Tamil Nadu v. Govel Plastic Pvt. Ltd. reported in [2002] 128 STC 577 (Mad). Drawing attention to this decision Mr. Shankare Gowda would point out that an attempt on the part of the Revenue in that case in the revision petition before the High Court to contend that a transaction wherein payment received from a business associate who was outside the State towards the cost of making dies and tools as in the present situation was held to be not attracting tax in terms of the provisions of the Central Sales Tax Act, 1956 as the said goods had never moved out of the State to attract levy of such tax under the Act. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner. 11. On the other hand Sri.Vedamurthy, learned Government Pleader, supports the order of the Commissioner. It is pointed out that the Commissioner has given proper reasonings; that the Commissioner did examine the entire records and found that the dealer had, in fact, manufactured by casting mould not merely for the customers abroad, but also for local customers and by using its own raw materials and inputs for consideration paid by the buyers and most of the rime the said goods are also delivered to the local buyers, but it is also found that the said goods or moulds are used by the dealer many a items for the manufacture of engineering goods according to the specification of the very buyers of the moulds and the dealer was also receiving price for the moulds from the customers. It is because of this position that the Additional Commissioner took the view that it is taxable under the provisions of the Act. 12. It is also pointed that insofar as the permanent wire tighteners are concerned, it is a product by this name and manufactured by the dealer and it is also sold in the market by that name and it is not sold as any aluminium extrusion, but as "permanent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ean there is no sale or no delivery, etc. Delivery can be actual or symbolic and the delivery in the instant case is definitely symbolic as once the goods have become the property of the foreign buyer and the assessee has not only held on behalf of foreign buyer but also has acted on the instructions of the buyer by using the goods to further manufacture other goods for the use and benefit of the foreign buyer. 17. Insofar as the reliance placed on the judgment of the Madras High Court is concerned, we find that the issue there was, as to whether the transaction was an inter-State sale, attracting levy of tax under section 3 of the CST Act. That is not the question here and moreover an observation that there is no question of tax liability in that case is an observation in general and not an issue raised as the issue there was whether the transaction attracted tax under section 3 of the CST Act and not a question of charge under the local State Sales Tax Act. 18. We find that the view taken by the Additional Commissioner on this aspect in restoring the assessment order by setting aside the order is perfectly justified as, the moment the assessee had received the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry and what one can notice here is that several items in this entry are one fitting into a basic presentation of aluminium metal as a commodity either in moulds or in billets or in aluminium extrusion, etc., though, it is contended by Sri Shankare Gowda that the permanent wire tightener of aluminium metal is also to be considered as another "extrusion of aluminium" such as for extrusion of aluminium sheets, etc., we are unable to accept this submission for the simple reason that the product itself is identified as permanent wire tightener, is marketable in that name and is sold in the market. In fact, the assessee also has described that and sells it as permanent wire tightener and not as aluminium extrusion or any form of aluminium. May be the mould used is aluminium, but that in no way detracts from the end-product which is distinctly identified as a product and not merely as a form of aluminium in which the aluminium metal can be sold. It is for this reason we reject the argument that it should have been brought within the scope' of entry 67 of the Third Schedule to the Act. 23. These two aspects having gone against the assessee, there is no need for interference in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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