TMI Blog2019 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to be seen first was - whether 'crankshaft' and 'camshaft' of compressors used in refrigerators and air-conditioners manufactured and sold by the assessee were items as would fall within any of the description of the taxing entry 26 of Schedule II, Part A of the Act. While examining that claim the Tribunal could not have looked into the residuary entry that in effect is Schedule V of the Act. Thus, if the answer to the above were in the negative and it were to be found that the 'crankshaft' and 'camshaft' manufactured by the assessee were not machinery, then, in absence of any other or alternative claim, the Tribunal could treat the goods to be unclassified under Schedule V to the Act. If however, that answer were in the affirmative, they could not be treated as unclassified by relying on Section 2(f) of the Act, which has no bearing to classification of any goods for taxation purpose. For the purposes of interpreting a taxing entry and to determine the classification of goods, section 2(f) of the Act and its effect would remain wholly irrelevant. It may be clarified, as there is complete absence of any taxing entry of 'capital goods' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The present revision has been pressed on the following question of law: A. Whether goods in question 'crankshaft' and 'camshaft' are covered within the ambit of Entry No. 26 of Schedule-II Part-A of the U.P. VAT Act, 2008? 4. During the assessment year in question, the assessee was engaged in manufacture of 'crankshaft' and 'camshaft' used in manufacture of compressors for refrigerators. It sold the same to a manufacturer of refrigerators. Treating the items 'crankshaft' and 'camshaft' to be component parts of machinery, the assessee charged those goods @ 4% under Entry 26 of Schedule-II Part-A of the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as the Act). However, the assessing authority took a different view and treated the same as unclassified goods and subjected the same to tax @ 12.5%. Upon first appeal, the first appeal authority upheld this view of the assessing authority, however, it remitted the matter on quantification issues. Upon further appeal, the Tribunal has confirmed the order of the assessing authority. 5. Having heard lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors if not connected with manufacturing process; (ii) an automobile including commercial vehicles, and two or three wheelers, and parts, components and accessories for repair and maintenance thereof; (iii) goods purchased and accounted for in business but utilised for the purpose of providing facility to the employees. (iv) vehicle used for transporting goods or passengers or both; (v) capital goods used in the execution of a works contract; and [(vi) ................] Omitted 9. Section 4(1)(a) of the Act reads as under: 4. Levy of tax on turnover of sale.- (1) The tax, payable on sale of goods under this Act, shall be levied and paid on the taxable turnover of sale of- (a) goods named or described in column 2 of the Schedule II, at every point of sale and at the rate of four percent. 10. Thus, in the first place, Section 4(1)(a) read with Schedule-II of the Act provides for rate of tax on goods that have been described in column-2 Schedule-II. Thus, everything else apart, the rate of tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by contrast, data processing machines have expressly excluded computers. Were it not so excluded, computers would have also fallen within Entry 90. In fact computers are separately dealt with in Entry 97(a). But the exclusion of computers from data processing machines would indicate that the items mentioned in Entry 90 are generic covering all species of such items. Given the language of the two entries we fail to understand how the High Court could have come to the conclusion that Entry 97(b) was the specific entry and that Entry 90 was the general entry. Such an interpretation goes against the express language of the two entries. 13. Thus, if the answer to the above were in the negative and it were to be found that the 'crankshaft' and 'camshaft' manufactured by the assessee were not machinery, then, in absence of any other or alternative claim, the Tribunal could treat the goods to be unclassified under Schedule V to the Act. If however, that answer were in the affirmative, they could not be treated as unclassified by relying on Section 2(f) of the Act, which has no bearing to classification of any goods for taxation purpose. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taxed as such. Only List of Industrial Inputs have been so identified and classified under Part C, Schedule II of the Act. 17. Commonly, even in homes and non-commercial or non-industrial establishment machines come to be used on a daily basis. A common example of such machine is a ceiling fan. In absence of a special taxing entry to categorize it otherwise, merely because a ceiling fan may be used both in an industrial establishment and also at a residential establishment would not change its identity and therefore its taxability as a machine. It cannot be treated both as an classified and unclassified goods solely on the basis of its installation, whether at an industrial establishment or a home. 18. In view of the above, order passed by the Tribunal is wholly unsustainable. The same is set aside and the matter is remitted to the Tribunal to pass a fresh order in accordance with law, keeping in mind the observations made above. 19. Accordingly, the question of law is left unanswered. The proceedings in remand may be completed as expeditiously as possible, preferably within a period of six months from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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