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TMI Blog2014 (8) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the commodities in question i.e. CICO is water proofing compound and construction chemical used in construction of building and as such it cannot be called as chemical rather it shall be liable to tax as a unclassified item. He, therefore, submits that the First Appellate Authority as well as Tribunal have committed manifest error of law and facts to hold to commodity to be liable to tax as chemical under entry no. 29 of part A or entry no. 126 of part C of IInd Schedule to the U.P. VAT Act, 2008 (hereinafter referred to as the Act) rather it is liable to tax @ 12.5% being an unclassified item. 5. Sri Ashok Kumar, assisted by Sri Praveen Kumar, learned counsel for the respondents submits that entry no. 26 of part A of schedule IInd is very wide which includes all types of chemicals not specified elsewhere in the schedule or any other schedule in the Act. He further submits that the Assessing Authority as well as the First Appellate Authority have accepted the commodity in question is to be a kind of chemical but held that since it is used as water proofing compound / construction chemical and therefore, it would be liable to tax as an unclassified item. He submits that the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the following findings of facts : 7.i) The Assessing Officer had not made any attempt to get the product tasted in any laboratory to ascertain that CICO Tape Crete is not Acrylic Polymer as claimed by the appellant by describing it on the label of the product itself. The Assessing Officer had rejected the claim of the appellant only on the ground that the appellant company had constantly been describing the product as water proofing compound / construction chemicals in import declaration forms it had used for importing the product from its other units and depots situate in other states and this amounts its own admission that the product was not an acrylic polymer in primary form but is only a polymer based construction chemical and water coating / proofing membrane used as a building material. And on page-4 of his judgement the Additional Commissioner has made his own observations that on the label of the product CICO Tape Crete the appellant stakes a claim that it is acrylic polymer for cement composite air fresh treatment system for protecting concrete and in the description given on the label of the product the appellant also claims that it is acrylic base polymer modified c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has also given the very code number to the product falling under Entry No. 162 of Schedule IInd-C of Part-A of U.P. Value Added Tax Act, 2008 and thus the product has to be accepted as one of the kind of goods described in this entry no. 162 and its use would be immaterial in this regard. Both the Assessing Officer as well as the Additional Commissioner has mentioned this contention of the appellant in his order without recording any finding on merit of this contention. In fact the Assessing Officer had rejected the contention only on the ground that this product is only a water proofing /construction chemical and the appellant had itself been paying the tax, before the U.P. Value Added Tax Act, 2008 came into force, at the rate of 12.5% treating the product as one unclassified, and the Additional Commissioner has simply endorsed the view of the Assessing Officer. (ii) In the case of 'Casco Industries Ltd. Vs. State of U.P. and others 2009 NTN (40) 225' a division bench of the Allahabad High Court has held that : "However Section 70 of the Act empowers the State Government to give commodity code number to any goods falling under particular entry and if the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely clear that any kind of product, a product or bi-product of acrylic polymers would be covered in entry no. 162 of Part-C of Schedule II appended to the U.P. Value Added Tax Act, 2008, and for determining the question as to whether or not the product is covered in the entry on the basis of its use for any specific purpose would be wholly immaterial. The ratio of the judgement of the division bench in the case of 'Casco Industries Ltd. Vs. State of U.P. and others 2009 NTN (40)225' thus squarely applies in this case. (9) Based on the above discussion there is no escape from the conclusion that the product of the appellant under the name and style 'CICO Tape Crete' clearly falls in entry no. 162 of Part-C of Schedule-II appended to the U.P. Value Added Tax Act, 2008 with effect from 1.1.2008 and its sale was liable to be taxed @ 4% from 1.1.2008. And now it is not necessary for me to take the other alternative argument of Sri Pradeep Kumar, Advocate for the appellant, that this product is also covered in Entry No. 29 of Part-A of IInd Schedule its being a chemical." 8. It is not in dispute that Excise Code of Acrylic Polymers under the Central Excise Tariff Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question in all its four variants. It held that the First three variants are obtained by modifying sulphonated napihelene formaldehyde. Sulphonate and napthelene are chemical compounds and its formula is C10H8. Sulphonate also figures in the description of chemicals mentioned in Entry 29 of part A of IInd Schedule. Formaldehyde is a solube gas derived from Methyl alchol by oxidation. Combination of these three elements process the properties of super plasticizers and thus all the three products are common chemical admixtures with regard to the fourth variant, the Tribunal held that it a blend of organic polymer as pH value of 6 (minimum). It is also processes the properties of super plasticizers. It is also obtained by the use of chemistry. The Tribunal referred, articles written by Sri M.R. Rixom and Sri Noel P. Mailvaganam on chemical Admixtures for concrete hydroxylated polymers which are common chemical admistures. The aforesaid four variants in question are used for water reducing agent in concrete and it is not only the water proofing product. The Tribunal held that product in question is chemical in the concrete as water reducer and reaction accelerators which accelerates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncrete, complying with IS;9103-1999, IS;2645-2003 and ASTM C-494 Type F & G. Its pH value is 6. It is used either to produce an extremely workable flowing concrete without loss of strength or to enable large water reduction to be made for the same workability which result in a dense, water tight concrete with higher ultimate strength. (8) A bare perusal of above description would make it clear that all the four products are through to the test for qualifying to be the chemicals as per the norms prescribed by the various authorities on the subject as all are obtained by the use of chemistry and each has a pH value of 6 (minimum). 9.(i)The first three products are obtained by modifying sulphonated napthelene formaldehyde. Sulphonate and napthelene (its chemical formula is C10H8) are chemical compounds and there is no doubt about it. Sulphonate also figures in the description of chemicals mentioned in Entry No. 29 of Part-A of IInd Schedule. Formaldehyde is a soluble gas derived from methyl alcohol by oxidation. And combining together the three elements possess the properties of super plasticizers. And thus all the three products are common chemical admixtures. (ii) The fourth p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Tax Act, 2008 and Entry No. 29, 97 and 98 of Part-C of the IInd Schedule appended to the U.P. Value Added Tax Act, 2008. Napthelene is specifically mentioned in entry no. 29; aldehydes in entry no. 97 and suphonated derivatives in entry no. 98. There is no doubt about it that all the three are chemical substances and thus the ultimate product manufactured by these three chemical substances by the use of chemistry is a chemical within the meaning of Entry no. 29 of Part-A of IInd Schedule appended to the U.P. Value Added Tax Act, 2008. It is well settled legal position - I have already discussed this in the earlier parts of this judgment - that if any product is covered in any entry in any part of any of the schedule then the question of applicability of rate of tax on such product cannot be decided on the basis of its use or pretend use. 13. In view of the above, discussions, I do not find any infirmity in the findings of facts recorded by the Tribunal. The applicants have not shown any perversity in the findings of fact recorded by the Tribunal. Under the circumstances the matter is concluded by findings of fact. The tribunal has rightly held that the aforesaid two products ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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