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TMI Blog2003 (4) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... block. Corona treatment is a must for all the bags to be supplied to us". 3. In the view of the AO, the supply of printed packing material is covered under s. 194C of the IT Act inasmuch as on the packing material (sacks) assessee-company's trade name, logo, contents and quantity etc. is printed especially as per the assessee-company's prescribed specifications. For supply of this printed packing material there exists contracts. Not even a small portion of such material without such prescribed specification is used. For supply of such printed material a specialised skill is required. Such printed material is not available in the open market at any point of time. Such printed material required assessee-company's prior approval before executing the entire bulk over that too has within a period of time as required. Thus it is a fact that the printed packing material required in the activities of the assessee-company is of a specialised nature which maintains its goodwill and credibility. Thus, the printing is not at all purely incidental in this case, as the supplier has to take due care of the prescribed specifications required by Narmada Cement. In other words the principal object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cks', which was not proper. The assessee's counsel had particularly relied upon the decision of the Tribunal in the case of Wadilal Dairy International Ltd. vs. Asstt. CIT (2001) 70 TTJ (Pune) 77 and pleaded for deletion of both the demands created. 5. The learned CIT(A) while considering and accepting the plea of the assessee has concluded in para 6 of his order as under: "I have gone through the order of the AO as well as the submission made by Shri R.T. Chaugule on appellant's behalf. I find that the appellant's case is squarely covered by the decision of Tribunal, Pune, in the above case, and, therefore, it is held that the supply of bags in the appellant's case was that of a purchase and, therefore, fell out of the purview of s. 194C of the Act. Therefore, the AO was not justified in working out short deduction under s. 201(1) or the levy of tax under s. 201(1A) of the Act as he has done in the present case. As a result, his order dt. 28th April, 2000 is cancelled." 6. Aggrieved by this order of the learned CIT(A), the Department is in appeal and while relying upon the basis and reasoning as given by the AO it was pleaded for setting aside the order of the learned CIT(A) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and the cost of printing is very less and compared to the cost of material. So far as Sarvodaya Printing Press case is concerned, the same cannot be compared to the facts of the present case and making a reference to various papers submitted in the paper book to show that cost of printing is nominal, it was pleaded for confirmation of the impugned order or setting aside the matter back on the file of the AO. 9. The learned Departmental Representative, in order to counter the submissions of the learned counsel for the assessee, submitted that the printing is incidental is of no consequence as pleaded for by the learned counsel for the assessee is not correct. The specifications are there and if material is not supplied according to the specification, the same is liable to be rejected and persons supplying the material cannot sell that material as scrap. Therefore, the ratio of these decisions as relied upon, is very much applicable to the facts of the case and the learned CIT(A) was not justified in deleting the demand created. 10. After considering the facts of the case and the material on record in the light of case law cited and relevant provision of law, I find from the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rately mentioned. Under such contract, the supplier party cannot retain or use the printed material and the excess, if any, was to be destroyed. The supplier party is responsible for protecting the goods and preventing them from falling into the hands of third parties. Its commercial value becomes zero in the case of rejection and it cannot be used even as a scrap. Therefore, the supply of printed material i.e. PP woven sacks, the packing material for cement, as per specification supplied by the supplier is not a sale but a contract involving work. Merely because excise duty or sales-tax was charged on the supply of material could not lead to the conclusion that it was purely purchase of goods, because the said levies have their own identity and nothing to do with income-tax. Moreover, Board Circular No. 715, dt. 8th Aug., 1995, applies only to the supply of printed materials with prescribed specifications and not for other purchases. 11. Before proceeding to consider the issue raised, let me examine the judicial aspects. The Hon'ble Bombay High Court (Full Bench) in the case of Sarvodaya Printing Press vs. State of Maharashtra where dispute was under sales-tax laws and after disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere are several decisions, which are too numerable to be noticed. The last word on the subject has been uttered in the authoritative pronouncement of the Supreme Court in the case of State of Tamil Nadu vs. Anandam Viswanathan (1989) 73 STC 1 (SC). It was a case of printing and supply of question papers of the University. The Supreme Court held that though sale of paper and ink was involved, it was merely incidental. It was not a case of sale but of a works contract having regard to the work to be done and the confidence reposed for the work to be done for remuneration. Following observations are appropriate: "The primary difference between a contract for work or service and a contract for sale is that in the former there is in the person performing or rendering services no property in the thing produced as a whole, notwithstanding that a part or even the whole of the material used by him may have been his property. Where the finished product supplied to a particular customer is not a commercial commodity in the sense that it cannot be sold in the market to any other person, the transaction is only a works contract". 13. Having regard to the special type of job work done and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itting together even in a Special Bench, can be quashed/set aside/reversed/ annulled/disturbed/overruled/vacated even by the Division Bench of the jurisdictional High Court. As regards doctrine of precedents is concerned, the rule of judicial precedent is a salutary one and is aimed at achieving finality and homogeneity of judgments. The doctrine of binding precedent has the merits of promoting certainty and consistency in judicial decisions, and enables organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of clear and consistent enunciation of legal principles in the decisions of a Court [Union of India & Anr. vs. Raghubir Singh (1990) 87 CTR (SC) 186 : (1989) 178 ITR 548 (SC)]. The Art. 141 of the Constitution of India embodies the doctrine of precedents as law and provides that the law declared by the Supreme Court should be binding on all Courts and Tribunals in India [CWT vs. Aluminium Corporation of India Ltd. (1972) 85 ITR 167 (SC)]. Similarly, the doctrine of precedent is applicable to the decisions delivered by the High Court. The law declared by the High Court is binding on all the Courts subordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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