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TMI Blog2009 (1) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... plication has been filed against an order dated August 22, 2003 passed by the West Bengal Taxation Tribunal (hereinafter referred to as, the Tribunal ) holding that the resistance stainless steel wire (hereinafter referred to as the said goods ) is not declared goods falling under sub-item (xv) of item (iv) of section 14 of the Central Sales Tax Act, 1956 (hereinafter referred to as, the 1956 Act ) on which tax was payable at the rate of four per cent. By the said order the Tribunal upheld the decision of the Deputy Commissioner to reopen the assessment for the four quarters ended on March 31, 1999 under section 46A of the West Bengal Sales Tax Act, 1994 (hereinafter referred to as, the 1994 Act ) to assess sales of the said goods under the residuary entry as goods not elsewhere specified attracting higher rate of tax at twelve per cent. Facts revealed that the petitioners imported the said goods from China containing higher chromium and aluminium content. The said goods were assessed by the customs authorities under Chapter 72 of the Customs Tariff Act, 1975, dealing with iron and steel goods, heading 72.23 as wire of stainless steel . Accordingly, import duty was levied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap, runner scrap and iron skull scrap; (ii) steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes); (iii) skelp bars, tin bars, sheet bars, hoe-bars and sleeper bars; (iv) steel bars (rounds, rods, squares, flats, octagons and hexagons, plain and ribbed or twisted, in coil form as well as straight lengths); (v) steel structurals (angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections); (vi) sheets, hoops, strips and skelp, both black and galvanized, hot and cold rolled, plain and corrugated, in all qualities, in straight lengths and in coil form, as rolled and in riveted condition; (vii) plates both plain and chequered in all qualities; (viii) discs, rings, forgings and steel castings; (ix) tools, alloy and special steels of any of the above categories; (x) steel melting scrap in all forms including steel skull, turnings and borings; (xi) steel tubes, both welded and seamless, of all diameters and lengths, including tube fittings; (xii) tin-plates, both hot dipped and electrolytic and tinfree plates; (xiii) fish plate bars, bearing plate bars, crossing sleeper bars, fish plate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the said goods were not 'sheets' for which no evidence whatsoever was led by the Tribunal. . . Mr. Bajoria also drew our attention to a decision H.P.L. Chemicals Ltd. v. Commissioner of Central Excise, Chandigarh reported in [2006] 197 ELT 324 where the Supreme Court held as follows: 29. This apart, classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue. . . The Department has not shown that the subject-product is not bought or sold or is not known or is dealt with in the market as denatured salt. . . 30.. It has been held by this court in number of judgments that burden of proof is on the Revenue in the matter of classification. In Union of India v. Garware Nylons Ltd. [1996] 10 SCC 413, in para 15, this court held as under: '15. In our view, the conclusion reached by the High Court is fully in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat reported in [1992] 84 STC 414 ; [1990] 1 SCC 532, where the apex court held as follows: (page 415 of STC) The question before us is whether the Department is right in claiming that the items in question are dutiable under tariff entry 68. This, as mentioned already, is the residuary entry and only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item. We do not think this has been done. . . He further drew our attention to a decision Commissioner of Central Excise, Meerut v. Maharshi Ayurveda Corporation Ltd. reported in [2006] 6 RC 13; [2006] 193 ELT 10, where the Supreme Court held as under: (para 18, at page 20 of RC) 17. In Bharat Forge Press Industries (P.) Ltd. [1992] 84 STC 414; [1990] 1 SCC 532; [1990] 45 ELT 525 (SC) a three-judge Bench of this court held that if a product cannot be brought under the specific entries in the Tariff Act only then resort can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and gases, passing them through and across angles, turnings, corners and curves are regulating their flow in the manner required. Smaller pieces of pipes and tubes differently shaped are manufactured for this purpose. They are merely intended as accessories or supplements to the larger pipes and tubes. They are pipes and tubes made out of pipes and tubes. There is no change in their basic physical properties and there is no change in their end-use. There is no reason why these smaller articles cannot also be described as pipes and tubes. 5.. But, it is said, they are known in the market differently as pipe fittings, a totally different commercial commodity. The expression 'pipe fittings' merely denotes that it is a pipe or tube of a particular length, size or shape. 'Pipe fittings' do not cease to be pipes and tubes; they are only a species thereof. This aspect of the matter can be illustrated by the decision of this court in Indian Aluminium Cables Ltd. v. Union of India [1987] 64 STC 180; [1985] 3 SCC 284. In that case the question was whether 'properzi rods' manufactured and cleared by the assessee fell within entry 27(a)(ii) of the First Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and tubes and declared goods under section 14 of the 1956 Act rejecting the contention that poles were different commercial commodities. It was held as under: The statement that they are commercially distinct commodities is merely based on their being called 'poles'. They are also available in the same market in which normally pipes and tubes are otherwise available. Neither the circumstance that certain processes are applied to the 'mother' pipes or tubes nor the fact that, in order to identify the particular type of tube or pipe one needs, one may use different names is sufficient to treat the article as a commercially different commodity. (c) In the case of Tube Investments of India Limited v. Deputy Commercial Tax Officer, Group III, Enforcement I, Greams Road, Chennai reported in [2003] 129 STC 238, the Madras High Court held that 'exhaust pipes' supplied by the assessee to Ashok Leyland Limited, a manufacturer of trucks, are steel tubes within the meaning of declared goods falling under the Second Schedule, item 4(xi), of the TNGST Act and that the fact that the buyer has used the steel tube supplied by the petitioner as part of chassis/eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to him, the Tribunal was entirely erroneous and contrary to law settled by the Supreme Court came to such finding. The Tribunal also failed to consider that the onus was on the Revenue to show that the said goods were not declared goods but it had not submitted any evidence in support of its contention. In these circumstances, he submitted that the decision of the Tribunal should be set aside and it is held that the said goods as declared goods at the rate of four per cent and are not residuary entry at the rate of twelve per cent. On the contrary, Mrs. Roy, learned Advocate appearing on behalf of the respondents, contended that it is the case of the petitioner that the stainless steel wire and stainless steel wire resistance are identical goods. She submitted that on the chemical and physical properties of stainless steel wire resistance, the melting point of this material is low and is therefore, used in electrical circuit to ensure that the stainless steel wire resistance melts first when the circuit is heated and this ensures the safety of the circuit. She further pointed out that the Legislature does not classify commodities on the basis of scientific or technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of iron and steel mentioned in the main item in entry 4(xv) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959, it includes all kinds of steel like non-alloy steel and alloy steel, as well as stainless steel. If iron and steel occurring in the main item includes non-alloy steel and alloy steel including stainless steel, the same meaning must be given to all the sub-items including sub-items (xi) and (xv) also. A sub-item cannot be construed with the aid of another sub-item, to restrict the scope of one sub-item. For understanding the sub-items, we must look into the main item, and if so done, there is difficulty in holding that stainless steel tubes and stainless steel wires are declared goods. It further appears to us that in section 14 of the 1956 Act it has been stated in item (iv)(xv) that wire rods and wires-rolled, drawn, galvanized, aluminized, tinned or coated such as by copper would be treated as a declared goods. Now in this case, it appears to us that the resistance which is also made out of the wire rods or wires-rolled or even put it with coated with copper treating it as a resistance, then there would not be any difficulty to treat the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shape, generally round and between 5 to 14 mm. in diameter, and is intended for conversion into wire. A rod that has been sized would be classified as wire provided it is between 5 to 12.5 mm. in diameter. It will be classified as a cold rolled bar if it is above 12.5 mm. in diameter. The term wire bar is the usual term which has later on come to be designated as wire-rod and hence wire bar and wire-rod are synonyms.' We will now refer to Wire Encyclopaedia (from Wire Industry Year Book 1968): 'Stainless steel: High chromium steel, often including nickel, which is resistant to corrosive and oxidizing influences. The best known form of stainless steel is 18.8, an austenitic steel containing about 18 per cent, chromium, eight per cent nickel, the carbon content being kept low. See also entries for stainless steel under annealing , welding , and lubricants . A suitable solution for cleaning 18.8 stainless and similar qualities is 35 per cent hydrochloric acid, five per cent nitric acid, five per cent restrainer and 55 per cent water. See also chromium oxide scale . Wire-rod: Produced from a steel billet by passing, when hot, through a series of rolls by which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carbon and three to six per cent of chromium. Liquid steel obtained by the abovementioned processes, with or without further refining, is generally run into a receiving ladle. At this stage alloying elements or de-oxidising agents, in solid or liquid form, may be added. This may be done in a vacuum to ensure freedom from gaseous impurities. Steels obtained by all these processes are divided, according to their content of alloying elements, into non-alloy steels and alloy steels (stainless or other). They are further divided in accordance with their special properties into free-cutting steel, silicon-electrical steel, high speed steel or silico-manganese steel, for example. Alloy steel. All steels containing carbon and small amounts of silicon, sulphur, manganese and phosphorous. Steels which contain intentional additions of elements other than those or in which silicon and manganese are present in large amounts are termed alloy steels. The alloying elements are deliberately added to produce certain properties in the product. In Government statistics, alloy steel figures relate to steel, other than high-speed steel, containing any of the elements named below and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r normal connotation and effect. Thus, in Stroud's Judicial Dictionary, 4th Edn., Vol. 5, at page 2753, we find: That is to say. (1) 'that is to say' is the commencement of an ancillary clause which explains the meaning of the principal clause. It has the following properties: (1) it must not be contrary to the principal clause; (2) it must neither increase nor diminish it; (3) but where the principal clause is general in terms it may restrict it. See this explained with many examples, Stukeley v. Butler Hob 171 .' We also cannot brush aside the observation made by the Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra reported in [1976] 37 STC 319 (SC) where the Supreme Court observed as follows: (page 322) It will be seen that 'iron and steel' is now divided into 16 categories which clearly embrace widely different commercial commodities, from mere scrap iron and leftovers of processes of manufacturing to 'wires' and 'wheels, tyres, axles and wheel sets'. Some of the enumerated items like 'melting scrap' or 'tool alloys' and 'special steels' could serve as raw material out of which other good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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