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State Of Karnataka Versus M/s. Federal Mogual TPR (India) Ltd.,

2017 (2) TMI 468 - KARNATAKA HIGH COURT

Whether in the facts and circumstances of the case the Tribunal is right in law in holding that the piston ring manufactured and sold by the appellant dealer as declared goods falling under Section 14(iv)(viii) on CST Act 1956 and Exigible Tax in Section 4(1)(b)(i) of KVAT Act 2003? - Held that: - reliance placed in the case of STATE OF PUNJAB Versus FEDERAL GOGUL GOETZE (INDIA) LTD. [2011 (3) TMI 416 - PUNJAB & HARYANA HIGH COURT], where it was held that Rings are specifically mentioned in .....

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thy, Aga)) ORDER JAYANT PATEL J. As the delay is for a longer period of 549 days in filing the above petitions, we have found it appropriate to consider the matter on merits too and the learned Additional Government Advocate has also addressed us on the merits of the main petitions. 2. All petitions are directed against the common order dated 17.01.2014 passed by the Tribunal where by the Tribunal for the reasons recorded in the order has allowed the appeals and has issued direction as contained .....

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eard Mr. Vedamurthy, learned Additional Government Advocate appearing for the petitioner-revenue. 5. As such on facts, there is no dispute that the respondent is manufacturing piston rings. It was the case of the appellant that such piston rings would fall in the category of rings as per Section 14(iv)(vi ii) of the Central Sales Tax Act (for short CST Act ) and tax is leviable accordingly and tax were also paid accordingly. But the Assessing Officer found that piston rings are different than th .....

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nt portion of Section 14 of the Act, which reads as under: 14. Certain goods to be of special importance in interstate trade or commerce- (i) to (iii) xxx (iv) Iron and Steel that is to say. (i) xxx (ii) xxx (iii) xxx (iv) xxx (v) xxx (vi) xxx (vii) xxx (viii) discs, rings, forgings and steel castings (ix) to (xvi) xxx 7. It will not be out of place to mention that in respect of the very assessee the Punjab and Haryana High Court for the very product has taken the view that piston rings falls un .....

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imately the Tribunal has allowed the appeals. 8. The only contention raised by the learned counsel for petitioner-revenue was that piston rings are not being made as it is from iron but they are processed after the rings are made and specifically manufactured for use as piston rings and once in commercial parlance the product is separately identifiable, it would not fall in the general category of rings and therefore it has to come under residuary entry for the purpose of chargeability of tax. I .....

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l Government Advocate, the aforesaid decision to that extent has not been interfered with by the Apex Court and the appeal is dismissed. He contended that if the iron and steel used for fabrication, creation of doors, window frames, grills are manufactured, a different treatment is given for the purpose of Value Added Tax Act, the same principle may apply even for the difference between the iron rings and piston rings and therefore he submitted that the Tribunal has commit ted error and question .....

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n the same shape. Hence, said decision would not be of any help to the petitioner- revenue more particularly because the issue stands already covered by a decision of not only Punjab and Haryana High Court in the case of respondent [State of Punjab and Haryana Vs M/s. Federal Mogul Goetze Ltd., reported at 2011 (267) ELT 602 (P & H)], but also stands covered by the decision of the Apex Court in the ca se of M/s. Dewan Enterprises supra. 10. We may record the decision of the Apex Court in the .....

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oods or not. Sub-clause (xiv) of sub-Section (iv) of Section 14 of the Act reads as follows: "It is hereby declared that the following goods are of special importance in inter-State trade or commerce: (iv) iron and steel, that is to say,- (xiv) wheels, tyres, axles and wheel sets". 4. It is not in dispute that according to Section 15 of the Act in respect of the declared goods which are enumerated in Section 14 of the Act, the tax on their sale or purchase inside the State cannot excee .....

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to be read as a whole and the meaning also assigned to the words "wheel sets" in the said entry and a rim which is admittedly a part of a wheel set would fall in the said entry. 6. In ASHOK TYRES CASE (1988 (68) STC 123) (SUPRA), this very entry came up for consideration before the Rajasthan High Court where the Tribunal held that the rims and axles fell within the ambit of entry [xiv] of clause [iv] of Section 14 of the Act. While dismissing the petition filed by the Assistant Commerc .....

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peting entry. This being so, if the above quoted entry (xiv) is wide enough to include rims within its ambit, then the applicability of the residuary entry would automatically been excluded. Taking into account the ordinary meaning of "wheel" in the manner in which it is understood amongst persons dealing with the same, it is reasonable to hold that rim is included within the expression "wheel" in the above entry, particularly when there is no other competing specific entry f .....

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of the Allahabad High Court in the judgment under appeal gives a very narrow meaning to the said entry and cannot be upheld. 8. For the aforesaid reasons, the appeal is allowed, the judgment of the High Court is set- aside and it is held that the appellant is only entitled to be taxed @ 4% on the sale price of the cycle rims. The appellant will also be entitled to costs. (Emphasis Supplied) 11. The aforesaid shows that the Apex Court did not agree with the view of the High Court and found that t .....

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