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TMI Blog2015 (11) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... C-I-29, the Tribunal was justified in law in holding that the non-ferrous metal castings, namely aluminum castings manufactured and sold by the respondents (original appellants) are covered by Entry C-I-29? 2. The real dispute in the present Reference is whether raw aluminum castings manufactured and sold by the Respondent herein, are covered by the residual Entry C-II-102 of the BST Act and exigible to tax @ 10% or whether they fall under Entry C-I-29 exigible to tax @ 4%. 3. The brief facts giving rise to the present controversy are that the Respondent herein (M/s. Jai Hind Industries Limited) manufactures raw aluminum castings required by the automobile industry. It had sold such castings for cylinder head cover supplier part to M/s Tata Engineering and Locomotive Company Ltd (for short, "TELCO Ltd."), vide invoice No.1682 dated 13th December, 1994. It is the case of the Respondent that they purchase aluminum alloy in the form of ingots which are then melted with the help of a melting furnace at 700° C. This molten metal is put into a dye through a special opening and considerable pressure is applied to the molten aluminum, due to which it reaches all the cavities inside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Reference Application No.54 of 1997 before the MSTT requesting it to refer the questions of law set out in paragraph 1 above, to this Court under Section 61(1) of the BST Act. The said Reference Application No.54 of 1997 was rejected by the MSTT vide its judgment and order dated 16th December, 2000. On this rejection, the Revenue moved this Court by filing an application under the first proviso to Section 61(1) of the BST Act which application was registered as Sales Tax Application No.3 of 2001. When this Sales Tax Application No.3 of 2001 reached hearing before this Court, by an order dated 25th July, 2003, this Court directed the MSTT to draw and refer the questions of law set out in paragraph 1 above to this Court for its decision. It is in these circumstances that this Reference has come up for our consideration. 7. In this background, Mr Sonpal, Special Counsel for the Applicant - Revenue contended that raw aluminum castings sold by the Respondent herein could never be classified under Entry CI- 29 of the Bombay Sales Tax Act 1959. It was the submission of Mr Sonpal that what was manufactured by the Respondent was in fact a new commercial commodity different from what was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Respondent was squarely covered by the decision of the Supreme Court in the case of Vasantham Foundry (1995) 5 SCC 289 and therefore, in any event, the question of law as framed in paragraph 1 above ought to be answered in the affirmative and in favour of the Respondent. 10. We have perused the papers and proceedings in the Sales Tax Reference alongwith the order of determination dated 13th January, 1996 passed by the Commissioner, the order dated 13th June, 1997 passed by the MSTT in Appeal No.33 of 1996 as well as the order of Reference dated 29th January, 2004. The narrow dispute that arises for our consideration is whether raw aluminum castings manufactured and sold by the Respondent fall within Entry C-I-29 of the BST Act, or whether the same could be classified under the residual Entry C-II-102. Entry C-I-29 reads as under :- Sr. No. Description of Goods Rate of Sales Tax Rate of Purchase Tax Period of Operation 1 2 3 4 5 29 (i) Non-ferrous metal powder and scrap (ii) Non-ferrous metal foils, sheets,rods, wires, bars, slabs, blocks, ingots, circles, tubes, angles, strips, plates and slugs (other than those of gold and silver specified in entry 1 of Part1 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 13th June 1997, we find that these Certificates have been relied upon by the MSTT. It is not the case of the Revenue that these Certificates are not genuine and / or could not be relied upon for any reason. 12. On the basis of these facts, we have to now examine whether the case of the Respondent falls within the ratio of the decision of the Supreme Court in the case of Vasantham Foundry (1995) 5 SCC 289 or whether the same would be covered by Bengal Iron Corporation's case. 1994 Supp (1) SCC 310. 13. The facts of Bengal Iron Corporation's case 1994 Supp (1) SCC 310 reveal that the Appellant before the Supreme Court manufactured and sold cast iron pipes, manhole covers, bends etc. These items manufactured by the Appellant (Bengal Iron Corporation) were assessed to sales tax on the turnover of sale by treating them as general goods. It was the Appellant's contention that these goods / products were 'cast iron' within the meaning of Item (2) (i) of Schedule III to the Andhra Pradesh General Sales Tax Act, 1957 and therefore liable to tax only at 4%. The Assessing Officer rejected this claim of the Appellant and held that 'cast iron castings' manufactured by the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different and distinct goods from 'cast iron' being manufactured and sold in the market. It is in this factual scenario that the Supreme Court opined that 'cast iron castings' manufactured by the Appellant were different from 'cast iron' as appearing in the relevant Entry under section 14 of the Central Sales Tax Act, 1956 as also in Schedule III of the Andhra Pradesh General Sales Tax Act, 1957. 15. As far as the decision of the Supreme Court in Vasantham Foundry (1995) 5 SCC 289 is concerned, it was the case of the Appellant therein that the basic materials for producing 'cast iron' were pig iron, steel scrap, iron scrap, cast iron scrap etc. After melting these raw materials and adding the requisite quantity of carbon, silica etc., the molten metal in the cupola furnace was poured into moulds of different specifications to get the 'cast iron castings' as required by the end users. The foundry owners like the Appellant manufactured these rough 'cast iron castings' according to the specifications of their customers, who in turn, after putting them through various other processes like machining, grinding, polishing etc., manufactured final products like manhole covers, pipes, com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake it any the less a rough mould. What emerges from the moulds is a cast iron casting in its primary form, that is to say, rough cast iron casting. But, that will not take it out of the ambit of declared goods. If cast iron or cast iron casting in the primary form is not to be treated as declared goods, then the whole purpose of including cast iron in the list of declared goods will be defeated. 16. The Central Sales Tax Act imposed a levy of tax on sale or purchase of goods that takes place in course of inter-State trade or commerce. "Declared goods" and 'goods' have been defined in sub-sections (c) and (d) of Section 2 of the Act: "2. (c) 'declared goods' means goods declared under Section 14 to be of special importance in inter-‐State trade or commerce; (d) 'goods' includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities;" 17. By including 'cast iron' among the goods of special importance in inter-State trade or commerce, the legislature could not have given the phrase 'cast iron' a narrow and limited meaning so as to exclude everything made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the present case. It is not disputed that the Respondent herein is purchasing non-ferrous metal ingots and are manufacturing primary and unfinished non-ferrous castings (aluminum castings). The MSTT, at paragraph 22 of its order dated 13th June, 1997 has categorically held that this fact has been proved by the Respondent herein. Whilst coming to this finding, the MSTT has relied upon several Certificates issued, including the ones from M/s Telco Ltd. as well as M/s Premier Automobiles Ltd. The Certificate issued by M/s Telco Ltd. dated 30th October, 1994 reads as under:- "We state that the raw castings being procured by us from M/s Jayahind Industries Ltd. are subjected to extensive machining such as milling, drilling, tapping etc. at our end, before they are further used in the manufacture of our motor vehicle/chassis." (emphasis supplied) Similarly, the Certificate dated 17th October, 1994 from M/s Premier Automobiles Ltd. reads thus:- "This is to certify that the various types of raw castings manufactured and supplied by M/s Jaya Hind Industries Ltd., Pune to us are being further processed at our end for carrying out various operations viz. drilling, milling, tapp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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