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TMI Blog2018 (12) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... & Sales Tax X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the compounding scheme and such products would have to readily concede to assessment under the regular provisions, especially for reason of there being no compounding scheme for that product. The dealers when they produce M-Sand by VSI/HSI are not absolved from the assessment of that product which does not fall under the categorization of granite metals. The proviso, according to the learned Government Pleader, specifically intended that the M-Sand produced with the machines as seen in clause (b) of Section 8 alone would be exempted. It is the further argument that the exemption was only on account of such M-Sand obtained as a by-product, in production of granite metals in the machines specified in sub-section (b) of Section 8 woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocured from the VSI/HSI are not produced by the machines referred to in Section 8(b). The crusher units use different machines for production of granite metal. The quarried metal of large size is first reduced to smaller size in the primary crusher and then crushed to still smaller aggregates in the secondary crushers. The VSI/HSI is used to further crush the smaller aggregates to fine sand which along with the crusher sand obtained from the primary and secondary crushers are called M-Sand. Though they are of different quality the terminology is the same and both are saleable as M-Sand in the market. 8. The learned Single Judge found that it was not in dispute that the products,namely granite metal, crusher sand and manufactured sand are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hines, then the exemption would have been worded otherwise. It would have been specifically with respect to M-Sand produced by the machines and not by the dealers or the units as the proviso is now worded. 9. Section 8(b) is very clear and indicates compounding fee only on the specific machines provided there under with respect to a dealer producing granite metals. True, the legislature never contemplated the introduction of vertical or horizontal shaft impactors for the purpose of producing M-Sand from the granite metal produced by a separate process through an impactor. The exemption granted, did not exclude such production by a separate machine other than that specified in clause (b) of Section 8. The exemption granted as per the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Officers of Commercial Taxes Department was set-up. The proposed scheme is based on the study report of the said Committee. It is proposed to introduce an annual compounding scheme for manufactured sand based on the production capacity of the machines used for this purpose, i.e., vertical shaft impactor/horizontal shaft impactor, in the following five slabs". 11. The speech itself indicates that the Government realised a drain of tax insofar as an exemption provided to manufactured or M-Sand by the proviso. It was then sought to introduce a compounding fee for the VSI/HSI also separately. This in fact further fortifies the contention of the dealers that prior to such introduction they were entitled to the exemption, whether the M-Sand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fically notice that the learned Single Judge found that if the notice is issued only with reference to the interpretation of Section 8(b), the issue would be covered by the decision in Mar Basil Granites and Metals v. Commercial Tax Officer [(2015) 2 KLT 58]. The decision in Mar Basil Granites and Metals (supra) have now been upheld by us in the appeals of the State. A reading of the notice under Section 67 indicates that the grounds raised for the proceedings under Section 67 is only non-disclosure of the installation of Vertical Shaft Impactor for the manufacture of M-sand. The allegation of books of accounts being not maintained correctly, is also on the ground that the manufacture of M-sand and metal sand and the data of sale in M-sand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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