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2016 (11) TMI 1583 - AAR - VAT and Sales TaxRate of Tax - Microcellular Rubber Sheets (Armaflex) - Microcellur Rubber Tubes (Armaflex) - Microcellur Rubber Sheets (Armasound) - section 55 of MVAT ACT, 2002. Held that - The words employed in the notification and notes appended with it suggest the intention of the Legislature. Only those commodities are to be taxed as per rate of tax of Schedule Entry 54 of MVAT Act, 2002, which are expressly covered in the Notification and those which do not find a place in the said Notification cannot be covered even if they find a place in the Central Excise Tariff headings or sub-headings. The Microcellular Rubber Tubes (Armaflex) which is covered by Central Excise Tariff No. 4009 1100. This sub-heading does not appears in the Government Notification issued for the purpose of sechedule entry C-54, therefore it cannot be covered by the scope of that entry.Hence, it is to be covered by the residuary schedule entry. Microcellular Rubber Sheets (Armasound) is covered by Central Excise Tariff No. 4008 1190. This sub-heading does not appears in the Government Notification issued for the purpose of sechedule entry C-54, therefore it cannot be covered by the scope of that entry. Hence, it is to be covered by the residuary schedule entry. The Microcellular Rubber Tubes (Armaflex) covered under Central Excise Tariff No. 4009 1100 is used as insulating material.lt is for ducting and piping application for maintaining the required temperatures inside the refrigerating system. This insulation material slows down the rate of heat transfer.lt is not used to transport any material like liquid or gases.lt has different function. Hence in common parlance also it can not be identified as tube. The people conversant with it, identifies the product as insulating material and uses it accordingly.Hence.the alternate submission being goods, covered by Schedule entry C-72 also not tenable. Application disposed off.
Issues Involved:
1. Determination of the rate of tax on Microcellular Rubber Sheets (Armaflex). 2. Determination of the rate of tax on Microcellular Rubber Tubes (Armaflex). 3. Determination of the rate of tax on Microcellular Rubber Sheets (Armasound). Detailed Analysis: 1. Determination of the rate of tax on Microcellular Rubber Sheets (Armaflex): The applicant, M/s. Armacell India Pvt. Ltd., contended that Microcellular Rubber Sheets (Armaflex) should be taxed under Schedule Entry C-54 of the MVAT Act, 2002, as it falls under Central Excise Tariff No. 4008 1110. The Advance Ruling Authority confirmed that this product is indeed covered by the specified tariff heading in the government notification, thus validating the applicant's claim. Consequently, Microcellular Rubber Sheets (Armaflex) are to be taxed as per Schedule Entry C-54. 2. Determination of the rate of tax on Microcellular Rubber Tubes (Armaflex): The applicant argued that Microcellular Rubber Tubes (Armaflex), classified under Central Excise Tariff No. 4009 1100, should also fall under Schedule Entry C-54. However, the Authority found that this tariff heading is not included in the government notification for Schedule Entry C-54. Despite the applicant's arguments that the manufacturing process and commercial use are similar to those of Microcellular Rubber Sheets (Armaflex), the Authority held that the product does not qualify under Schedule Entry C-54. Instead, it should be taxed under the residuary entry, E-1. 3. Determination of the rate of tax on Microcellular Rubber Sheets (Armasound): The applicant contended that Microcellular Rubber Sheets (Armasound), classified under Central Excise Tariff No. 4008 1190, should be taxed under Schedule Entry C-54. The Authority, however, determined that this tariff heading is also not included in the government notification for Schedule Entry C-54. The applicant's arguments, including reliance on a similar case under the Tamil Nadu VAT Act, were not accepted because the MVAT Act does not have a specific entry for 'insulator'. Thus, Microcellular Rubber Sheets (Armasound) must be taxed under the residuary entry, E-1. Conclusion: 1. Microcellular Rubber Sheets (Armaflex): Covered by Schedule Entry C-54, taxed accordingly. 2. Microcellular Rubber Tubes (Armaflex): Not covered by Schedule Entry C-54, taxed under residuary entry E-1. 3. Microcellular Rubber Sheets (Armasound): Not covered by Schedule Entry C-54, taxed under residuary entry E-1. The Authority emphasized strict interpretation of the notification, adhering to the exact language and intent of the legislature. The applicant is advised to file an appeal within thirty days if aggrieved by this order.
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