TMI Blog2022 (5) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts under the diversification scheme - the Tribunal further held that the levy of sales tax on the raw materials and sale of finished products @4% and 12% respectively and surcharge @ 10% on the tax on finished products was leviable. Accordingly, the order of the ACST was set aside and the case was remanded to the ACST to make good the deficiency by issuing appropriate notice to the Appellant/Petitioner as to why the taxes as mentioned above would not be levied. The correctness of the remand of the case by the Tribunal for levy of enhanced tax on the Assessee, the Court is of the view that the Tribunal exceeded its jurisdiction. In SHYAMSUNDER SAHOO VERSUS STATE OF ORISSA [ 1993 (2) TMI 314 - ORISSA HIGH COURT] , this Court explained that the power of the Tribunal under Section 23(3)(c) of the OST Act to enhance the assessment is relatable to appeal or cross objection filed by the Revenue. In the present case, there is no such cross appeal by the Revenue and therefore, there was no occasion for the Tribunal to have remanded the issue of tax on raw materials and finished products including surcharge on finished products to the ACST for a fresh determination. Disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction filed by the State ? 3. This Court heard the submissions of Mr. Jagabandhu Sahoo, learned Senior Counsel for the Petitioner and Mr. S. S. Padhy, learned Additional Standing Counsel for the Department-Opposite Party. 4. The background facts are that the Petitioner is a registered dealer under the Orissa Sales Tax Act, 1947 (OST Act) as well as the Central Sales Tax Act, 1956 (CST Act). The Petitioner is a registered Small Scale Industrial Unit (SSI Unit) in terms of the Industrial Policy Resolution (IPR), 1986. It was engaged in manufacture of steel almirahs, racks, tables, air coolers, cabinets. For this, it has been granted a permanent registration certificate by the District Industries Centre (DIC), Rourkela. 5. After coming into force of the IPR 1989, the Petitioner undertook expansion and diversification by virtue of a separate project report, which was duly approved by the Competent Authority. The Petitioner started manufacturing new items viz., foundation packing and rings, gaskets, plates and packing exhaust smoke channel, electrical panel board sheet material like karai, G.P. Tray, Grain Storage Tank, Steel door and window. 6. The Project Manager of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .A. No.913 of 2002-03. According to the Tribunal, the production and sale under the diversification scheme could not be construed to be increased commercial production over and above the installed capacity of the Unit and that the Petitioner had violated the stipulation laid down in the Finance Department Notification vide entry No.26-FF and 30-FFF (ii) of the Tax Free Schedule of the IPR, 1989. It was thus held that the Petitioner was not entitled to enjoy the benefit of exemption of tax on purchase of raw materials and sale of finished products under the diversification scheme. 12. The Tribunal further held that the levy of sales tax on the raw materials and sale of finished products @4% and 12% respectively and surcharge @ 10% on the tax on finished products was leviable. Accordingly, the order of the ACST was set aside and the case was remanded to the ACST to make good the deficiency by issuing appropriate notice to the Appellant/Petitioner as to why the taxes as mentioned above would not be levied. 13. As regards questions (b) and (c) framed for consideration, viz., the correctness of the remand of the case by the Tribunal for levy of enhanced tax on the Assessee, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reference to the expression enabling installed capacity , it was clarified as under: Existing installed capacity means the capacity recorded in the permanent registration certificate (PMT) at the time of issue of the same and there is no provision to amend the same capacity frequently unless undertaken E/M/D, provided such E/M/D should fulfill the criteria as defined in relevant IPR. Similarly, in no case the original capacity recorded in the PMT can be reduced for the purpose of availing the incentives. In this connection, this office has already clarified that once eligibility certificate for S.T. concession is issued, it cannot be amended with every increase in fixed capital investment, vide this office letter No. 6738 dtd. 23.5.2000 (copy enclosed). 16. In Tin Plate Company of India Limited v. State of Bihar [2004] 135 STC 385, the Jharkhand High Court explained with reference to a similar issue and held as under: 13. In view of cause (15) of S.O. No. 478 read with S.O. No. 57 dated March 2, 2000, diversification of a unit is quite distinguishable from expansion/modernization of the unit and diversification of the unit cannot be equated with expansion/mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the production of the new product, i.e., TMBP which was not earlier produced in the unit of the petitioner for manufacture of ETP. 17. Once it was clear that the Petitioner had stopped manufacturing the products in terms of the original installed capacity and was manufacturing only under the diversification unit, there is no justification in withdrawing the exemption. In this context, again reference may be made to a circular dated 24th June 1999 issued by the Commissioner of Commercial Taxes, Orissa to all the authorities functioning under the OST Act wherein it was observed therein as under: xxx xxx xxx Lately it has come to the notice that some of the assessing officers and first appellate authorities have allowed to such Industrial units undertaking Expansion/ Modernization/ Diversification, exemption of sales tax on entire purchase of raw materials and sales of finished products on the interpretation that the dictionary meaning of the term over and above is 'in addition to' or besides . It seems that such authorities have taken out the term over and above out of the context employed in the provision of the entry and have failed to make a harmoniou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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