2023 (7) TMI 630 - ORISSA HIGH COURT

Classification of goods - 150 HP Fully Automatic ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel - whether ATS falls within the scope of Entry Serial No. 29 of Part-II of Schedule-B so as to attract levy of value added tax @4% [prior to 01.04.2012] and @5% [with effect from 01.04.2012] or subject to tax @13.5% as per entry in Part-III of Schedule-B appended to the Odisha Value Added Tax Act, 2004?

HELD THAT:- Considering the instant case etched on various tests and well-accepted tenets, ATS answers that it is accessory to ‘Centrifugal, Monoblock and Submersible pumps and pump sets’. The document like expert opinion supported by Affidavit furnished by the petitioner remained undisputed by the opponent-State of Odisha. This Court is of the firm view that the contention of the petitioner deserves seal of approval.

In the present case, the authorities below never examined the pertinent issue as to the identity of the commodity— ATS with reference to Entry 29 of Part-II of Schedule-B. The Assessing Authority mechanically discarded the explanation rendered by the petitioner and shifted the onus on the dealer.

For ascertaining the true nature of ATS, the petitioner has brought on record the expert opinion and this Court on visiting web portal of manufacturers of such commodities found that in trade parlance ATS is treated as accessories to ‘Centrifugal, Monoblock and Submersible pumps and pump sets’. The explanation of the petitioner being in consonance with the well-settled tests and guidelines propounded by the Courts, the suggestion of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax & Goods and Service Tax Organisation for sending the matter back to the Assessing Authority for fresh adjudication by giving scope for enquiry/investigation is rejected. What is emanating from the Order-in-Second Appeal of the learned Sales Tax Tribunal is that no enquiry as to identity of commodity vis-à-vis entry in Serial No. 29 of Part-II of Schedule-B was conducted by neither the Sales Tax Officer (Audit) nor the Assessing Authority. Legal position is well-established in HINDUSTAN FERODO LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [1996 (12) TMI 49 - SUPREME COURT] ratio of which is this, that the onus of establishing that a product falls within a particular item is on the Revenue.

This Court does not find force in the argument of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax & Goods and Services Tax Organisation, more so when the Revenue has not chosen to file any objection to the Expert Opinion supported by Affidavit sworn to by Managing Partner of the petitioner-firm. This Court, hence, feels it expedient to show indulgence in the Order-in-Second Appeal of the learned Odisha Sales Tax Tribunal in exercise of power of revision under Section 80 of the OVAT Act.

By reversing the conclusion arrived at by the Appellate Authority, the learned Odisha Sales Tax Tribunal essentially held that the commodity in question, i.e., ATS, falls within the scope of entry in Part-III of Schedule-B. Before holding the commodity to fall in residuary entry, the learned Tribunal as also the Assessing Authority failed to bear in mind the enunciation in the matters of BHARAT FORGE & PRESS INDUSTRIES (P) LTD. VERSUS COLLECTOR OF C. EX. [1990 (1) TMI 70 - SUPREME COURT]; INDIAN METALS & FERRO ALLOYS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1990 (11) TMI 143 - SUPREME COURT]; SPEEDWAY RUBBER CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [2002 (5) TMI 51 - SUPREME COURT]; CC. (GENERAL), NEW DELHI VERSUS GUJARAT PERSTORP ELECTRONICS LTD. [2005 (8) TMI 657 - SUPREME COURT]; COMMISSIONER OF C. EX., MEERUT VERSUS MAHARSHI AYURVEDA CORPN. LTD. [2005 (12) TMI 93 - SUPREME COURT], conspectus of which leads to show that only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item.

This Court has no hesitation to hold that the commodities, i.e., 150 HP Fully Automatic ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel is comprehended in the term “accessories” as per entry in Serial No. 29 of Part-II of Schedule-B appended to the OVAT Act, which attracts rate of tax @ 4% for the tax periods prior to 01.04.2012 and @5% for the tax periods commencing from 01.04.2012 pertaining to the periods of assessment - the question of law as framed by this Court which fell for consideration is answered in the negative, i.e., in favour of the petitioner-assessee and against the Revenue.