9911796707
TMI Blog2000 (6) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... afety valves are parts and accessories of machineries and therefore the goods have to be classified under item 81 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 taxable at 8 per cent. The assessing authority held that the safety valves are essential for the progress and safety functioning of the machineries with which they are linked. In the absence of such valves, the machineries would get damaged due to excessive pressure of liquid or gas and that the valves regulate the smooth flow of liquid or gas to the various parts of the machineries in the petroleum and chemical industries and other such industries. Therefore, rejecting the claim of the assessee, safety valves were assessed to tax at 8 per cent. In the first appeal, the Appellate Assistant Commissioner observed that though safety valve is fitted on a pipe-line, the pipe-line itself is linked to the main machinery and therefore, the valve cannot be isolated from the machinery. Further, he observed that the valves are designed for fitting in a pipe-line which is a part of the main machinery and therefore the classification under entry 81 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neries, with which they are attached. Only if the valves are fitted with the pipe-line which is a part of machinery, the machinery can function well otherwise, the machineries would get damaged due to excessive pressure of gases. These valves regulate the both flow of liquids or gases through various parts of the machineries. So, the function of the valves clearly indicates that it is a part of machinery worked by power and they clearly fall under entry 81 of the First Schedule." The Appellate Tribunal further observed as follows: "The facts of this case and the location of the valves in the machinery indicates that the safety valves have been specifically designed for a particular purpose of using them as a safety device for the relief of pressure in the tank or pipe-lines connected with machineries in the industries. This cannot be operated separately and they can be operated only if they are fitted with machinery. The safety valves are necessary tools for the relief of pressure in the tank or pipe-lines connected with the machineries. The purpose for which the commodity 'safety valves' are used also indicates that the valves are tools connected with the machineries, falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (P.) Ltd. v. State of A.P.] it was held that voltage stabilizer cannot be treated as machinery propelled or operated by electricity. Similarly, in the decision of the Supreme Court in [2000] 117 STC 149 (Deputy Commissioner of Sales Tax v. Anand Wire Allied Industries) it was held that stay wires which were metallic ropes used for supporting electric posts were not accessories of electrical goods. In the present case also, classification of safety valves as parts or accessories of machinery is totally erroneous. 4.. Mr. R. Mahadevan, the learned Government Advocate, contended that the Appellate Tribunal on a detailed and elaborate analysis of the function of safety valves has rightly classified the item as an item falling under entry 81 of the First Schedule to the Act. In [1992] 86 STC 434 (Mad.) (General Marketing and Manufacturing Company Ltd. v. State of Tamil Nadu), excavator was held to be an integral part of the machinery, namely, rear dumps, lodes, etc., specified in entry 55A of the Tamil Nadu General Sales Tax Act, 1959. 5.. Mr. N. Inbarajan, the learned counsel for the petitioner while replying to the arguments of the learned Government Advocate stated that the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1991] 80 STC 233, has categorically held that the correct test to classify an accessory would be "whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the motor vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle, or a supplementary or secondary to the main or primary importance". 7.. In Industrial Machinery Manufacturers Pvt. Ltd. v. State of Gujarat [1965] 16 STC 380 (Guj), it was held that the humidifiers used by cotton textile mills in order to maintain certain humidity for the purpose of increasing the strength of yarn to avoid breakages of yarn and of improving the quality of yarn were essential to the modern textile industry and were "machinery" falling within the analogous entry 15 of Schedule C to the Bombay Sales Tax Act, 1959. Even in the decision reported in [1988] 71 STC 281 (AP) in the case of Katragadda Electronics (P.) Ltd. v. State of A.P., originally the assessing authority classified the voltage stabilizer under entry 38(v) of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957, namely, electronic systems, instruments, apparat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential part. Thus in the light of the above position, having regard to the Supreme Court decision in Mehra Bros. case reported in [1991] 80 STC 233 and the decision of the Madras High Court in [1977] 40 STC 169 (V. Govindarajan Brother v. Government of Pondicherry), we have no hesitation in holding that safety valves fitted on the pipe-line but control the flow of liquid or gases in the machinery and ensure the smooth and safe functioning of machineries are nothing but accessories of machineries and therefore would fall under entry 81 of the First Schedule to the Act as rightly held by the Appellate Tribunal. It is significant to know that safety valves add to the convenience or effectiveness of the machinery in the petroleum and chemical industries and they are manufactured specially for use in the processing industries so as to regulate the flow of liquid or gases. In such circumstances, we find that the conclusion reached by the Appellate Tribunal in classifying the safety valves as falling under entry 81 of the First Schedule to the Act is quite in order and there is no case to interfere. Accordingly, the tax revision cases are dismissed. And this Tribunal doth further orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
