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TMI Blog2014 (7) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... make a distinction between scrap and defective/rejected material and the impact of mentioning it incorrectly. Therefore, the mere entry of the material in form 38/tax invoice as rails (defective/RE) would not be sufficient and conclusive to hold that the material was actually defective or rejected basis of iron steel and not a waste or a scrap material - rail line scrap has been sold in the first instance by the railway authorities and has been subsequently purchased by the dealer in question. The authorities below simply on the basis of the entries made in invoice and form 38 without any physical examination of the material have treated it to be a defective and a rejected material and not a scrap or a waste material - It is therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Schedule to the Act on being brought into a local area for consumption, use or sale from any place outside the local area shall be subjected to entry tax at the rate specified but not exceeding 5 per cent. of the value of the goods. Schedule to the Act has been provided by notification dated September 29, 2008. It contains 20 entries and entry No. 14 reads as under: 14. Iron and steel as defined in section 14 of the Central Sales Tax Act, 1956. Subsequently, by an amending notification dated January 15, 2009 some of the entries to the Schedule provided by notification dated September 29, 2008 were amended. The amended entries includes entry No. 14. It has been amended to include iron steel as defined in section 14 of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 38, it has been described as rail (defective/rejected) and as such is not a waste material. Clause (xvi) of section 14(iv) of the Central Sales Tax Act, 1956 reads as under: defective, rejects, cuttings, or end pieces of any of the above categories. In view of above, the only question which arises for consideration in this revision is whether rail line scrap which is an item of iron and steel is exempt from entry tax in view of amended notification dated January 15, 2009 or would fall within the clause (xvi) of section 14(iv) of the Central Sales Tax Act, 1956 as has been held by the Tribunal. It is acceptable to the parties that the material is iron and steel but the only issue is whether it is a scrap material or not. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax invoices are not technical persons, who may be able to make a distinction between scrap and defective/rejected material and the impact of mentioning it incorrectly. Therefore, the mere entry of the material in form 38/tax invoice as rails (defective/RE) would not be sufficient and conclusive to hold that the material was actually defective or rejected basis of iron steel and not a waste or a scrap material. It is well acknowledged that certain scrap or waste material is normally utilized for manufacturing new items and in that respect a thing which is waste for one party may be a raw material for the other party. In other words, a material which may be a waste material in one hand may not necessarily be waste material in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by notification dated January 15, 2009 but the court instead of entering into that controversy disposed of the writ petition without deciding it on the ground of remedy of an appeal. The court specifically said that it has not been called upon to decide the issue which has been raised. Therefore, the Tribunal was not correct in taking shelter of the above two decisions in coming to the above conclusion. In [1971] 28 STC 455 (Guj) Commissioner of Sales Tax, Gujarat v. Bharat Iron and Brass Foundries it has been laid down by the Gujarat High Court that generally waste or scrap material is sold in weight and not item wise. Again the mode of sale is not certain and none of the authorities took care to know about it. It is therefore, c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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