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TMI Blog2003 (9) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... TNGST No. 2020320/20012002 dated May 16, 2003, wherein the respondent has assessed the transactions pertaining to sale of paper cones against form XVII, under section 3(2) of the TNGST Act at four per cent. In this case also, the petitioner claims that the sale of paper cones to spinning mills for winding of yarn on it, is eligible for concessional levy at three per cent as packing material. 3.. Since the question involved in these cases are common and arguments have been advanced by both the counsels in common, the original petitions are disposed of by this common order. 4.. With reference to the O.P. No. 649 of 2003, the learned counsel for the petitioner argued that the petitioner is engaged in the manufacture and sale of paper cones and paper tubes and they are used by the textile mills to wind the yarn as a primary packing material. Paper cone is essential to hold the yarn wound on it and sold in the cone form only and paper tube is used by the paper mills for rolling the paper and by the pump manufacturer for packing submersible pumps. Paper cones were sold as packing materials taxable at the concessional rate of 3 per cent under section 3(3) of the Tamil Nadu General Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing order, all that it meant was that the Supreme Court was not inclined to exercise its discretion so as to allow the appeal being filed and no declaration of law flows from the order of the Supreme Court dated August 4, 1997 ([1997] 107 STC (Journal) 3) and, therefore, the order of this Special Tribunal in T.C. (A). No. 18 of 1996 dated September 17, 1996 requires to be reconsidered with regard to correct rate of taxation on the ground that paper cones are used as and when yarn is to be wound and as such, the placing of this paper cones over a metallic cone does not per se become an accessory or a component of a textile machinery. 6.. The learned Government Advocate argued supporting the stand taken by the authorities that the "paper cones" would be classified as spares of textile machinery under entry 76, Part B of the First Schedule to the TNGST Act taxable at 4 per cent under section 3(2) of the Act. 7.. I heard the rival contentions and perused the records. On seeing the decision of this Special Tribunal in T.C. (A) No. 18 of 1996 dated September 17, 1996*, I could see that the controversy in that case that paper cones and tubes manufactured and sold to textile mills woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of sale of paper cones and tubes to spinning mills for winding yarn on it, were subjected to tax at four per cent under entry 76, Part B of the First Schedule to the TNGST Act, which reads as "textile machinery, parts and accessories thereof". But, the petitioner says that paper cones are used for packing of yarn only, that for using paper cones as textile machinery spares, it could not be sold without functional capability as a textile machinery, that paper cone as such are placed over a metallic cone holder which is attached to a cone lever and with every winding of yarn in the cone to the desired length, the wound up yarn on the paper cone is taken out of the cone holder for sale in this packed condition, that winding is nothing but packing the yarn for sale in the market and the cone loses its shape and usage once the yarn is taken out of the cone, that placing of the paper cones over a metallic cone does not per se become an accessory or a component of a textile machinery and because of this, the petitioner is eligible for concessional levy at three per cent under section 3(3) of the TNGST Act as packing See page 362 supra. See [2002] 125 STC (Journal) 41, Sl. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wheels " 11.. As the learned counsel for the petitioner argued that as soon as winding of yarn in the cone to the desired length is over, the wound up yarn on the paper cone is taken out of the cone holder for sale, I could come to a conclusion from the dictionary meaning of the words "part and accessory" given in the above dictionaries that paper cones and tubes used in the spinning mills for winding yarn on it and sale of such yarn with paper cones and tubes, are neither parts of the textile machinery nor accessories of the textile machinery, since paper cones and tubes are neither components nor attachment or fitting to the textile machinery. 12.. The contention of the learned counsel for the petitioner that the paper cones and tubes are packing material, is also not accepted. In common parlance, to pack means to pack a thing or that the thing should be wrapped or tied together for carrying. So, to become a packing material, the material should be used for packing a thing or wrapping a thing. But, in the present case, yarn is the main product and that is not wrapped or tied or packed with the paper cones supplied by the petitioner, but yarn is wound on paper cones properly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x payable by the seller of any goods (paper cones and tubes) shall be at the rate of only three per cent on the turnover relating to such sale. However, the "metallic cones" fitted to the textile machinery would be a component of the textile machinery or part or accessory of the textile machinery and that would fall under entry 76, Part B of the First Schedule to the TNGST Act. The question of considering the paper cones and tubes as machinery and to treat the transaction as falling under section 3(5) of the Act, as argued by the learned counsel for the petitioner, would not arise. 14.. Therefore, I have no hesitation to hold that "paper cones and tubes" sold by the petitioner to spinning mills for use by the spinning mills in manufacture of yarn, by the process of winding yarn on the paper cones and tubes supplied by the petitioner for sale, would neither be "parts and accessories" of textile machinery to fall under entry 76, Part B of the First Schedule to the TNGST Act nor a packing material as claimed by the petitioner, but to classify the "paper cones and tubes" as falling under caption "any goods" used in connection with manufacture inside the State under section 3(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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