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TMI Blog2013 (12) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... arma, CA Sh. R. L. Chhanalia ORDER The assessee has filed these four appeals against the consolidated impugned order of CIT(A), Jalandhar, dated 28.05.2012 for the assessment years 2007-08, 2008-09, 2009-2010 2010-2011 respectively. As the issue involved in all these appeals is common, these were heard together and therefore, are being disposed off by this consolidated order for the sake of convenience. 2. The grounds raised by the assessee in ITA No.337(Asr)/2012 for the assessment year 2007-08 are reproduced hereunder, as the grounds raised in other appeals are also identical: "1. That on facts and the circumstances of the case and the provisions of law, treating molasses, generated during sugar production, as scrap and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards bagasses, it is contended that it is used as bio fuel. Also, it is used as a renewable resource in the manufacture of pulp and paper products and building materials. The assessee finally contended that both Molasses and Bagasses did not fall within the definition of scrap as per Explanation (b) to section 206C of the Act. The AO considered the submissions of assessee and did not accept the same and held that the assessee was liable to collect tax at source on the sale of Molasses and similarly as regards to Bagasses, the same is being sold to M/s. ABC Paper Mill Ltd; for manufacture of pulp, paper and building materials. No tax has been collected at source nor any declaration u/s 27C has been obtained from the company. With the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable by the assessee vide impugned order dated 28.05.2012 for the assessment years in dispute. 4. Now, aggrieved by the order of the Ld. CIT(A), the assessee has filed the present appeal against the impugned order dated 28.05.2012 challenging the order of the ld. CIT(A) before this Bench, in which the Ld. CIT(A) has upheld the action of the AO in holding the assessee to be in default under section 206C(6) of the Act in respect of sale of Molasses and charging interest under section 206C(7) of the Act. 5. The Ld. counsel for the assessee stated that the ld. first appellate authority has rightly deleted the addition on account of Bagasses in the impugned year which has been upheld by this Bench vide order dated 19.11.2012 in assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: "Explanation - For the purposes of this section,- a..................... aa................... ab.................. [(b) 'scrap" means waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons;" 7.1. The Hon'ble Delhi High Court in the case of CIT vs. Deep Chand and others 257 ITR 756 relied upon the decision of the Hon'ble Supreme Court in the case of Gurudevdatta VKSSS Maryadit vs. State of Maharashtra AIR [2001] SC, 1980 in which it was held as under:- "It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITA No.327 to 330(Asr)/2012 7.4. The ordinary meaning of scrap and waste thus has a similarity in words. Ordinarily , the word "AND" is used in a conjunctive sense. This word is used to connect clauses or sentences or to coordinate words in the same clauses. 7.5. The explanation to section 206C of the IT Act provides the meaning of scrap means "waste and scrap" from the manufacture or mechanical working of material which is definitely not usable as such because of breakage, cutting up, wear and other reasons. In the above definition the important words used in the definition of scrap are "waste and scrap" - "from manufacture" and "which is". The word "waste and scrap" are one item. Thereafter, the word used is "from" the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al working of materials that the Molasses is obtained when the sugar is crystalised from sugarcane juice after boiling and clarifying. The process of crystalisation takes place when the sugarcane juice is saturated to such an extent that the sugarcane juice separates into sugar crystals and molasses and that is the stage where molasses and sugar crystals are separated, no mechanical working of materials is involved. 7.8. Keeping in view the aforesaid discussions alongwith various decisions rendered by the Hon'ble Supreme Court as well as the Hon'ble High Courts, we are of the view that Molasses is not a scrap as held by the Revenue Authorities in the impugned orders. It is not waste or scrap and cannot be used as such. Thus it does not fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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