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TMI Blog2006 (8) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed form at annexure I to the notification. All the three authorities including the Tribunal declined the benefit to the petitioner for the reason that the item sold is not consumed in manufacture of products by the purchasing dealer, namely, Cochin Refineries Limited. Therefore the question involved is whether consumption in manufacture of only the item sold will entitle the selling dealer for concessional rate of tax under the notification. Item 3 of Schedule III of the Notification entitles the dealer for concessional rate of tax at five per cent on the sale of goods other than petroleum products coming under entry 108 of the First Schedule to the Act to industrial units including public sector undertakings for use in manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided under the statute. Therefore the notification should be assigned a meaning to make it meaningful and to supplement the statute and not to limit its application to the already available benefits under the Act making the notification unnecessary or redundant. Even though the Government Pleader referred to the definition of the term manufacture contained in the main body of the notification and contended that the purchasing industry should use the item in the manufacture, we are unable to accept this contention because this definition only explains as to what is the activity that qualifies a purchaser to avail of the concessional rate. However, what are the materials, tools and equipment required for manufacture is a matter which d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferential tax if the item purchased is not used for the purposes declared. We are of the view that it is not only failure of use of the item for the declared purpose, but even a misdeclaration with regard to eligibility for concessional rate entitles the Department to proceed against the purchaser to collect differential tax and interest thereon and in cases of deliberate violation, even to levy penalty. Department has no case that Cochin Refineries Limited has issued any misdeclaration or failed to use the goods purchased for the declared purpose because Department has not taken any proceedings against them. In view of the above findings, the sales tax revision case is allowed vacating the order of the Tribunal and confirming the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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