TMI Blog2015 (4) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... under the expression ‘part thereof’, were manufactured as per the specifications of the railways, the dealers are liable to collect tax at the rate of 4% falling under Entry 76 of the Third Schedule as the battery is an integral part of the rail coaches, engines and wagons and falls under ‘part thereof’. On the same analogy, the honeycomb partition frames used for partition of the rail coaches becomes a part thereof of the rail coaches and therefore, the Tribunal was justified in holding that the honeycomb partition frames manufactured and supplied by the assessee to the railways, form part of a rail coach and falls within Entry No.76 to the Third Schedule of the KVAT Act. We do not see any error committed by the Tribunal. - Decided agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct. It has to be taxed as an unscheduled good under Section 4(1)(b) of the KVAT Act at 13.5%. Accordingly, a proposition notice was issued and the assessee filed his objections. However, overruling the objections of the assessee, the Assessing Authority rectified the order passed on 18.10.2012 and passed rectification order on 22.10.2012 under Section 69 of the KVAT Act read with Section 9(2) of the CST Act. Aggrieved by the said order, the assessee preferred an appeal before the Joint Commissioner for Commercial Taxes who dismissed the appeal. The assessee preferred a second appeal to the Karnataka Appellate Tribunal. The Karnataka Appellate Tribunal, on careful consideration of the rival contentions and after taking note of the vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal and set aside the orders passed by the lower authorities and held that the tax paid at 5% is what is legally due. Aggrieved by the said order, the revenue has preferred this appeal. 3. The learned Government Advocate, assailing the impugned order, contended that the honeycomb partition frames are available in the market. Merely because the said partition frames are used in the construction of rail coaches, it does not become a part of a rail coach as it is not a scheduled item. It has to be taxed as an unscheduled good and the rate of tax payable is 13.5% and the order passed by the Karnataka Appellate Tribunal is erroneous and requires to be set aside. 4. Per contra, the learned counsel for the assessee reiterated the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose these partition frames are used. Without such partition frames, there cannot be a rail coach as understood in common parlance. Therefore, it falls under Sl.No.76 of Third Schedule to KVAT Act which specifies rail coaches, engines, wagons and parts thereof. 7. The counsel for the revenue relied on a judgment of the Division Bench of this Court in the case of MYSORE AGRO SERVICE CENTRE v. STATE OF KARNATAKA and contended, articles cannot be taxed depending on the user in individual cases. In ATUL GLASS INDUSTRIES (P) LTD. V. COLLECTOR OF CENTRAL EXCISE [1986] 63 STC 322, the Supreme Court applied the said test of functional character of the product in question. That was a case where the court had to consider whether mirror was treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods by the authorities of the forest department who called them varyingly as 'eucalyptus fuel- wood' 'eucalyptus wood-heap', etc. is not determinative, the fact that the purchasers were dealers in timber is also not conclusive. 9. From the aforesaid judgments it is clear, a particular use to which an article can be applied in the hands of a special consumer is not determinative of the nature of the article. The intention of the legislature seems to levy a particular rate of tax in respect of sales transactions pertaining to a particular good as enumerated in the Schedules of the Act. What falls from that judgment is, if a particular good is enumerated to the Schedule of the Act, then, levy of tax should be according to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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