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TMI Blog2000 (10) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... wani, who vide order dated September 15, 1989 had rejected the appeal. 3.. Feeling aggrieved by the said order, the applicant preferred an appeal under section 10 of the Act before the Tribunal, which too has been dismissed by the Tribunal by the impugned order. 4.. I have heard Sri Rajesh Kumar, learned counsel for the applicant and Sri S.D. Singh, learned standing counsel appearing on behalf of respondent. 5.. The learned counsel for the applicant submitted that cement was required by the applicant for fixing the machinery, whereas steel was required for use in the boiler and paints were required for the protection of the machinery. He submitted that all the aforesaid three items are connected with the manufacturing. According to the learned counsel for the applicant, the Tribunal had accepted that all the three items play some role in the manufacturing, but did not allow the benefit on the ground that they are not directly used in the manufacturing process. He submitted that the benefit of section 8-A of the Central Sales Tax Act, is not confined to those items, which are directly required for the manufacturing, but the benefit is also available to those goods which are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture or processing of goods for sale, or in mining, or in the generation or distribution of electricity or any other form of power." 8.. On a conjoint reading of the aforesaid provisions, it will be seen that the goods specified in the certificate of registration is to be used by the person in the manufacture or processing of goods for sale. Admittedly, all the items in question, viz., steel, cement and paint cannot be included in the description of raw materials, processing materials, machinery, plant, tools, spare parts, accessories, fuel or lubricants as mentioned in rule 13 of the Rules. 9.. Learned counsel for the applicant contended that they would fall under the description of the word "stores" as mentioned in rule 13. In support of his aforesaid plea he relied on the following decisions of the honourable Supreme Court: (1) Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar, reported in [1965] 16 STC 259 (SC). (2) J.K. Cotton Spinning Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur, reported in [1965] 16 STC 563 (SC). (3) Collector of Central Excise, Calcutta-II v. Eastend Paper Industries Ltd., reported in [1990] 77 STC 203 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) authorises the Sales Tax Officer to specify, subject to any rules made by the Central Government, goods intended for use by the dealer in the manufacture or processing of goods for sale or in mining, or in the generation or distribution of electricity or any other form of power. By rule 13 the Central Government has prescribed the goods referred to in section 8(3)(b): such goods must be intended for use in the manufacture or processing of goods for sale or in mining or generation or distribution of power, and the intended use of the goods must be as specified in rule 13. It is true that under rule 13, read with section 8(3)(b), mere intention to use the goods in the manufacture or processing of goods for sale, will not be a sufficient ground for specification: the intention must be to use the goods as raw materials, as processing materials, as machinery, as plant, as equipment, as tools, as stores, as spare parts, as accessories, as fuel or as lubricants. A bare survey of the diverse uses to which the goods may be intended to be put in the manufacture or processing of goods, clearly shows that the restricted interpretation placed by the High Court is not warranted. The expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be invited to a judgment of this Court in which it was held that vehicles used by a company (which mined ore and turned out copper in carrying on activities as a miner and as a manufacturer) fell within rule 13, even if the vehicles were used merely for removing ore from the mine to the factory, and finished goods from the factory to the place of storage. Spare parts and accessories required for the effective operation of those vehicles were also held to fall within rule 13. See Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar [1965] 16 STC 259 (SC)." At another place the honourable Supreme Court has held that"Building materials including lime and cement not required in the manufacture of tiles for sale cannot, however, be regarded within the meaning of rule 13, as raw materials in the manufacture or processing of goods or even as 'plant'. It is true that buildings must be constructed for housing the factory in which machinery is installed. Whether a building is a 'plant' within the meaning of rule 13, is a difficult question on which no opinion need be expressed. But to qualify for specification under section 8(3)(b) goods must be intended for use o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those, as here, which might be burnt up or consumed in the chemical reactions. The question in the present case is whether the ingredients of the last mentioned class qualify themselves as and are eligible to be called 'raw material' for the end-product. One of the valid tests, in our opinion, could be that the ingredient should be so essential for the chemical processes culminating in the emergence of the desired endproduct, that having regard to its importance in and indispensability for the process, it could be said that its very consumption on burning up is its quality and value as raw material. In such a case, the relevant test is not its absence in the end-product, but the dependence of the end-product for its essential presence at the delivery end of the process. The ingredient goes into the making of the end-product in the sense that without its absence the presence of the end-product, as such, is rendered impossible. This equality should coalesce with the requirement that its utilisation is in the manufacturing process as distinct from the manufacturing apparatus." The honourable Supreme Court has further held that: "On a consideration of the matter, we are persuaded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly, the goods which are used for the construction of buildings or as office equipment would not be covered under it. In the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur [1965] 16 STC 563 (SC); AIR 1965 SC 1310, it was held: "Section 8(3)(b) authorises the Sales Tax Officer to specify, subject to any rules made by the Central Government, goods intended for use by the dealer in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. By rule 13 the Central Government has prescribed the goods referred to in section 8(3)(b); such goods must be intended for use in the manufacture or processing of goods for sale or in mining or generation or distribution of power and the intended use of the goods must be as specified in rule 13. It is true that under rule 13, read with section 8(3)(b) mere intention to use the goods in the manufacture or processing of goods for sale, will not be a sufficient ground for specification; the intention must be to use the goods as raw materials, as processing materials, as machinery, as plant, as equipment, as tools, as stores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be treated as a raw material. Drilling bits were neither instantaneously consumed nor did they form part of the finished goods in any manner. Hewing implements were used to cut down large pieces of the mine walls and surface and their life was perhaps the longest out of the list. Dry cells, torches and cells and electrical bulbs were used only for illuminating the inside of the mine. Cement and lime were used to seal leakages and plaster holes in the mines. It was more in the nature of a building material. The High Court took the contrary view. It said the Commissioner had interpreted the definition of raw material too narrowly. We cannot agree, given that the definition requires that the raw material should be (1) consumed, (2) in the process of manufacture." The honourable Supreme Court has further held that: "It seems to us clear that, drilling bits apart, none of the articles aforementioned can qualify to be articles 'consumed in the process of manufacture' or, to put it in a different way, consumed in the mining of the coal. They may be used for purposes incidental to the mining, but are not integral thereto. 18. So far as drilling bits are concerned, they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word "stores" has been defined as under: "articles (as of food) accumulated or some specific object and issued or drawn upon as needed: the raw or unworked material supplies of a manufacturing concern." 21.. Thus, the dictionary meaning of the word "stores" is material supplies of a manufacturing concern or articles accumulated for some specific object and issued or drawn upon as needed. 22.. From the various decisions referred to above, the principle which emerges is that if a process of activity is so integrally related to the ultimate manufacture of goods so that without the process or activity, manufacture may, if theoretically possible be commercially inexpedient, goods intended for use in the process or activity as specified in rule 13 will qualify for special treatment. This is not to say that every category of goods in connection with manufacture or in relation to manufacture or which facilitates the conduct of the business of manufacture will be included within rule 13. 23.. Applying the aforementioned principles, I find that the cement which is required by the applicant for use in the construction of factory building and or foundation, as held by the honourable Sup ..... 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