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TMI Blog2014 (5) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... d in commissioning an imported machinery by a dealer for its customer form part of the cost of machinery in order to attract tax liability under the provisions of the Tamil Nadu General Sales Tax Act, 1959?" 2. The dispute herein relates to the turnover of Rs.14,62,403/- relating to expenses incurred by way of technical fees to the technician for fine tuning of the machinery imported by the assessee. The Assessing Officer viewed that the charges paid related to sale of machinery, hence, assessable at 8%. Aggrieved by the assessment, the assessee went on appeal before the first Appellate Authority. The Appellate Assistant Commissioner pointed out that the assessee is stated to have expended a sum of Rs.14,62,403/- being expenditure met on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and commissioning at the site of Tamil Nadu Newsprint Limited, then the nature of work rendered by the Engineers of M/s.Jagenberg Inc. Enfield had to be looked at. Thus, in order to find out whether the contract was composite one or divisible one, the matter was remanded back to the Assessing Officer for fresh consideration. Aggrieved by this, the assessee went on appeal before the Sales Tax Appellate Tribunal. It observed that the copy of the agreement entered into between the assessee and the supplier for purchase of machinery was to the value of Rs.1,07,00,000/-, out of this, a sum of Rs.57,27,500/- represented the price of indigenous components. As per clause 14, the supplier had to demonstrate the performance of the Machine in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity and the first Appellate Authority also pointed out the same. Thus, in the absence of the materials, the Assessing Authority rightly came to the conclusion. When the assessee placed invoices before the Appellate Assistant Commissioner, he rightly remanded the assessment back to the Assessing Officer for fresh consideration. Without following the said course, the Tribunal however viewed that the assessee had entered into separate agreement for commissioning of the machinery erected in the assessee's premises and that the Engineers were paid charges for the services rendered as well as for stay and travel. In the light of the fact that the assessee had not produced necessary documents before the Assessing Officer, the Tribunal should have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment made to the technocrafts for travel and stay and for technical services rendered, would be part of sale of the equipment and hence, cannot be removed. 5. We fail to understand how this aspect of rendering of technical assistance would form part of the agreement of purchase of the machinery. So long as the payment made had nothing to do with the transfer of property in any goods, and that the payment made was not on sale of any goods, payment on labour charges has always been held as outside the purview of the Act for the purpose of taxing it. Even prior to 46th amendment to the Constitution, the settled principle was that the labour charges charged for separately, would not form part of the turnover for the purpose of assessment und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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