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2016 (12) TMI 66 - RAJASTHAN HIGH COURT

2016 (12) TMI 66 - RAJASTHAN HIGH COURT - TMI - Whether in the facts and circumstances of the case the Rajasthan Tax Board was justified in law in holding the goods namely "Mobile Cranes wire ropes" liable to tax @ 4% under schedule IV despite of the facts that there is no specific entry of the same and they are liable for tax as per rate prescribed under schedule-V? - Held that: - the user of Wire Ropes being mainly to put in the Mobile Cranes, is certainly integral part of the Mobile Cranes an .....

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and 2008-09. The question of law raised by the Revenue reads as under:- "whether in the facts and circumstances of the case the Rajasthan Tax Board was justified in law in holding the goods namely "Mobile Cranes wire ropes" liable to tax @ 4% under schedule IV despite of the facts that there is no specific entry of the same and they are liable for tax as per rate prescribed under schedule-V." 2. In so far as STR No. 449/2011 is concerned, the respondent assessee moved an appl .....

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IV or VI of the Rajasthan Value Added Tax Act, 2003, as such shall be taxable at the rate notified in Schedule V of the Act 2003. 4. The matter was assailed before the Tax Board. 5. In the connected petitions, STR Nos.99, 100/2013, 101/2013 and 106/2013, a survey took place on 16.12.2008 wherein it was noticed that the said assessee had sold Wire Ropes/Strained Wires, however, paid tax @ 4% whereas as per the Assessing Officer it ought to have been 12.5% and in assessment the differential tax o .....

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ple meaning is required to be looked into and the item in which the dispute has been raised, being distinct and separate, the claim of Revenue is just and proper. 9. Learned counsel for Revenue contended that Mobile Cranes can be operated without Wire Ropes and it is not necessary that Wire Ropes are required to be used only in Cranes, but can be used for diverse purposes and no material has been placed by the assessee respondent to show that it was being used only for Mobile Cranes and not for .....

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ises, the order of Assessing Officer is required to be upheld. 10. Per contra, learned counsel for the assessee vehemently contended that Wire Ropes are indeed part of Mobile Cranes and nothing else. It has been contended that had the Assessing Officer or the Additional Commissioner has taken a different view, they could have said something additional, but merely to say that it is distinct from Mobile Cranes, is not sufficient. 10.1 Learned counsel further contended that the Tax Board has gone e .....

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h. He relied upon judgments rendered in Annapurna Carbon Industries Co. v. State of Andhra Pradesh [1976] 37 STC 278 (SC), Commissioner of Central Excise, Delhi v. Insulation Electrical (P) Ltd. [2008] 30 STT 01 15 (SC), Tata Engineering & Locomotive Company Ltd. v. State of Bihar & Anr. [1995] 96 STC 211 (SC), The Deputy Commissioner of Agricultural Income-Tax and Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Union Carbide India Limited, Madras [1976] 38 STC 198 (Ker), ACTO v. .....

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omes loose or breaks, and nothing more. It may be that few people may use it for some other purposes, that does not mean that it becomes a different commodity. It should be part & parcel of Mobile Cranes and nothing more. 12. The apex court in the case of Insulation Electrical (P) Ltd. (supra) considered a case wherein the assessee was engaged in the manufacture of Rail Assembly front Seat (Omni), Adjuster Assembly slider Seat, YE-2 Rear Back Lock Assembly and 1000 CC Rear Back Lock Assembly .....

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ying its products. It was the claim of assessee that the items manufactured by it are only adjuncts, additions to the seats for the better utilization of the seats for comfort and convenience of the passengers and they are not essentially components or parts of seats, and the claim of the Revenue before the apex court was that the products manufactured by the assessee are parts of the seats because assessee was supplying these products to M/s Bharat Seats Limited and M/s Krishna Maruti Limited w .....

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de the ambit of Entry 73 of the Second Schedule to the Karnataka Sales Tax Act, 1957 and was not exigible to sales tax at 13 per cent. Undoubtedly this ratio would help the appellant. The learned judges laid emphasis thus- "Every part is useful to the car for its effective operation. Likewise should be the aid of other accessories in order to fall within the said entry. The accessory to a part which has no convenience of effectiveness to the entire car as such cannot in our opinion fall wit .....

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this Court in the case of Pragati Silicons (supra) came to the conclusion that 'accessory' is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product. Chapter 9401 covers all types of seats and not only the seats of a car and a seat is complete even without the rail assembly front seat, adjuster/assembly slider seat and rear back lock assembly. They are not essential parts of the seat. Chapter heading 9401 covers only the part .....

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cles. When seats are affixed on these rails, seats can slide back and forth with the operation of a lever forming part of other rail assembly front seat adjuster. This enables the driver or the passenger, to adjust the position of the seat to suit his comfort and convenience. These are merely to improve the efficiency and convenience of the seat and does not form part of seat. The seats are complete in themselves without these mechanisms and therefore it cannot be held that the parts manufacture .....

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t be termed as accessories to the motor vehicle for better convenience of the passengers/drivers travelling in the car." In Tata Engineering & Locomotive Company Ltd. (supra), the apex court was considering a case of Tata Company which is manufacturing and processing motor vehicles, trucks and bus chassis, excavators and other engineering products, purchased commodities including such commodities as tyres, tubes, batteries and other various other items which are used for producing the g .....

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Engineering Works Ltd. (1989) 75 STC 313 (SC); a question arose whether name-plates used by manufacturer of fans being, "input" were exempt from payment of excise duty which provided that duty of excise leviable on such goods falling under Item 1-A of Serial No. 68 as used "inputs" would be exempt. It was held that name-plate affixed on the fan was not a piece of decoration and the fan without name- plate could not be marketed, therefore, it was exempt as provided in the not .....

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in the vehicle, to make it marketable as vehicles." The Kerala High Court in the case of Union Carbide India Limited (supra), has opined thus :- "...The principle which can be drawn from the above decisions appears to be that a thing is a part of the other only if the other is incomplete without it. A thing is an accessory of the other only if the thing is not essential for the other but only adds to its convenience or effectiveness. Based on this principle the courts held that a type .....

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ly added to the convenience or effectiveness of the principal thing, namely, the machinery. Although it was not considered by the Mysore High Court whether the printing types were part of the printing machinery, it would appear that, in the light of its decision in State of Mysore v. Kores (India) Ltd., it would have, had the question arisen, held that the printing types were not part of the printing machinery, for the machinery was complete without the types. 7. To restate the principle : A thi .....

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ioning of the transistors. They are not accessories for they do not merely add to the convenience or effectiveness of the transistors, but they make them work. Nevertheless they are not parts of the transistors, for the transistors are complete without them. Same is the position with the arc carbons vis-a-vis the cinematographic equipments." A coordinate Bench of this court in the case of ACTO v. Industrial Instruments (supra), was considering the case of "CVT & UPS" and this .....

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x Board also noticed in para 8 of its judgment that the facts of the case on record showed that the appellant being the manufacturers of Automobile Leaf Springs, leaves and accessories are registered as such with the Govt. of Maharashtra and they have been granted ISO certificate as manufacturers of Automobile Leaf Springs and Assemblies. They manufacture leaf springs for exclusive use in various types of motor vehicles like Tata. Telco. Mahindra & Mahendra etc. and sell it only to auto deal .....

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