9911796707
TMI Blog1994 (3) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 1941 (in short, "the 1941 Rules") and section 5(3) of the Central Sales Tax Act, 1956 (in short, "the 1956 Act"). 3.. The case of the applicants is that applicant No. 1 (hereinafter referred to as "the applicant") is a proprietorship business, registered as a dealer under the 1941 Act, which carries on business "of manufacturing 'aluminium foil' also known as 'pharmaceutical packing materials' in the shape of labels for sale in West Bengal and also exporting same to places outside India, i.e., Bangladesh, and Singapore after making purchase thereof mainly from M/s. Bharat Aluminium Company Limited .........", also known as BALCO. For the said purpose, the applicant requires declaration forms XXIV-A and XXXIII under rules 27A(1b) and 27C(2) of the 1941 Rules from respondent No. 1. In the middle of the year 1988, the applicant took up export business, for which declarations in form XXXIII became necessary. Declarations in those two forms had been issued to the applicant, as required, without any problem. Forms XXIV-A were last issued on August 27, 1991 and forms XXXIII were last issued on October 10, 1991. Application was made on January 27, 1992, for issuance of those two type ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II and XXIV-A continued to be withheld with the result that supplying dealers demanded payment of further tax. So, the applicant filed an application in this Tribunal, numbered as RN-498 of 1992. During its hearing, respondents submitted that no application for declarations was received by them. So, this Tribunal had permitted the applicant to file an application for declarations with a direction that, if filed, such application should be disposed of within 3 days. Then an application for declarations was filed and it was rejected by the Commercial Tax Officer on December 4, 1992. RN-498 of 1992 was finally disposed of by giving liberty to the applicant to prefer revision from the said order with a direction that, if filed, such revisional application should be disposed of within 4 weeks. But, respondent No. 4, the Assistant Commissioner rejected the revision by his order dated January 22, 1993. A second revision filed before respondent No. 6, the Additional Commissioner, also was in vain in respect of declarations in form XXXIII, although he gave certain favourable directions for issuance of declarations in form XXIV-A in course of his revisional order dated March 30, 1993. Therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XXIII. The applicant was asked to appear and explain on the point whether forms XXXIII earlier issued had been properly used. While denying all material allegations of the applicant, it has been also stated that no letter had been sent to BALCO by Commercial Tax Officer, Assessment Wing, as alleged. According to respondents, after purchase of aluminium foil from BALCO and before exportation, applicant laminates the foils and then prints and sizes the same and manufactures aluminium pharmaceutical packing materials (vide paragraph 17 of the opposition). Seizure of books of account and documents has been said to be justified. It was found out that the applicant did not export aluminium foil, but he exported pharmaceutical packing materials as per designs and specifications of foreign buyers. Some instances of evasion of tax by sales to dealers within India have been cited. Respondent No. 1 has denied that he ever said that declarations had been withheld on instruction from respondents 2 and 3, and that respondent No. 3 ever told the applicant that he had issued no such instruction. It is stated that the applicant was asked to file revised returns. and annexure "P" to the returns, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. We see from annexure page 19 of the affidavit-in-opposition being a representation dated April 19, 1993, submitted to the Commercial Tax Officer, Manoharkatra Charge, that the applicant had clearly admitted that he was manufacturing finished goods and selling the same in West Bengal and returns were filed accordingly. The second type of business is purchase of aluminium foil in West Bengal, conversion of the same into laminated, printed and sized pharmaceutical packing materials and then exportation of such materials to Bangladesh and Singapore. The dispute relates to these exports. The applicant contends that he is entitled to exemption from tax for purchase of aluminium foil, because he claims that he is exporting the same goods, namely, aluminium foil, in spite of laminating, printing and cutting into size. 8.. If any goods is governed by the 1941 Act, the exports would attract section 5(2)(a)(v) which is extracted below: "5(2). In this Act the expression 'taxable turnover' means, in the case of a dealer who is liable to pay tax under section 4 or under sub-section (3) of section 8, that part of his gross turnover during any period which remains after deducting therefro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foil, been exported, the applicant would have to furnish form XII under rule 27(2) of the 1954 Rules and in that case, he would not pray for issuance of declarations in form XXXIII under rule 27C(2) of the 1941 Rules. 11.. There was no controversy, nor could there be any, that plain aluminium foil is a notified commodity under section 25 of the 1954 Act. By Notification No. 4584-F.T. dated September 9, 1980, issued under section 25 (ibid.), the following commodity was taken out of the 1941 Act and brought within the purview of the 1954 Act: "Aluminium foils including aluminium foils backed or interleaved with any substance, other than paper." In the instant case, it is common ground that what the applicant purchases, even for export, is plain aluminium foil, neither backed nor interleaved. There is, however, a controversy as to whether what is exported is the same commodity which was purchased. 12.. Mr. Pradip Ghosh, learned counsel for the applicants, argued that having regard to the object and intention of article 286 and section 5(3) of the 1956 Act, to the effect that exports should be encouraged and should not be burdened with sales tax, the processes of lamination, pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export." Mr. Pradip Ghosh contended that the intention of section 5(3) above is to treat the last purchase of goods for export in the same manner as the export itself for the purpose of exemption from sales tax. Be that as it may, two conditions are to be fulfilled in order to be eligible to reap the benefit of the exemption. There must be an export out of the territory of India and "those goods" which were purchased last must have been so exported. Mr. Ghosh argued that if the purchased goods are subjected to certain processes for complying with the requirements of the foreign buyer, the goods will remain the same goods, no matter whether under the State enactments the purchased goods is taxable under the 1954 Act and the exported goods is taxable under the 1941 Act. He submitted that section 5(3) of the 1956 Act should not be given a literal interpretation. Mr. Ghosh further contended that lamination is a prerequisite for printing; and printing is done only on one side of the foil, leaving the other side as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. De also referred to the case of Edible Products [1991] 83 STC 317 in which this Tribunal held that refined cocoanut oil produced after processing cocoanut oil (as purchased) by neutralisation, decolouring and deodorisation is a different commercial commodity from the original one. He also referred to the case of Presidency Kid Leather [1991] 80 STC 338, in which this Tribunal held that raw goat skin and processed semi-finished product therefrom were different commercial commodities. That was of course not a case in the context of section 5(3) of the 1956 Act. Mr. De also relied on the case of Bengal Iron Corporation [1993] 90 STC 47 (SC), where it was held that cast iron as "declared goods" within the meaning of section 14(iv)(1) of the 1956 Act does not include cast iron castings. It was also not a case under section 5(3) of the 1956 Act. Learned State Representative placed reliance on the case of Consolidated Coffee Ltd. [1980] 46 STC 164 (SC). He contended that in the instant case there was a long timegap between purchase of aluminium foil and export thereof and therefore, benefit under section 5(3) of the 1956 Act, ought not to be extended. Mr. Pradip Ghosh took serious ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent and new commercial commodity in the form of printed aluminium foil. Mr. Ghosh has drawn our attention to the fact that although in the application and elsewhere the commodity exported is described as pharmaceutical packing material and although the party describes the same as such, it was described by the applicant in the relevant documents as printed aluminium foil. Moreover, Mr. Ghosh pointed out that the plain aluminium foil was purchased for export for use as pharmaceutical packing material and after the printing and cutting were made, the foil was exported for the same purpose. So, functionally the foil exported was no different from the foil purchased. 16.. Mr. Pradip Ghosh drew our attention to item 76.07 of the Central Excise Tariff of 1993-94 and showed that aluminium foil whether or not printed came under the main heading of the item. Mr. T.N. De, State Representative, however, pointed out that the sub-item 76.07.10 related to plain aluminium foil, whereas 76.07.50 related to printed aluminium foil. He, therefore, argued that, though under the same broad heading, plain and printed foils were treated for the purpose of excise duty as different commodities. Mr. Ghos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of form XXIV-A, respondents should issue declarations in form XXIV-A to the applicant according to law. We like to make it clear that the position with regard to declarations in respect of export turnover is different from that of sales turnover within West Bengal, in view of the restrictions and conditions imposed by section 5(3) of the 1956 Act in terms of article 286 of the Constitution. Therefore, although the applicant had wanted that form XXXIII should be issued for export turnover and although that form, like form XXIV-A, was also under the 1941 Act, we are directing that regarding export turnover, the appropriate certificate or declaration forms should be furnished or issued according to law, as the case may be. 18.. In the result, the application is allowed. The applicant is entitled to the benefit of section 5(3) of the Central Sales Tax Act, 1956, for the last sale or purchase of aluminium foil for complying with export sales, though instead of plain aluminium foil, printed and sized aluminium foil was exported. If the applicant files fresh applications for issuance of declarations for the purpose of availing of the benefit under section 5(3) of the 1956 Act, respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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