9911796707
TMI Blog1985 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... y issued a notice proposing to determine the total and taxable turnovers to the best of its judgment at Rs. 9,80,400.67 and Rs. 4,69,217.97. In the objection letter dated 24th December, 1976, amongst others, the assessee claimed that according to the amended entry in item 4 under the Third Schedule cotton fabrics are exempt from tax and stove wicks being braided cotton cord would be exempt from tax. The assessing authority noticed that item 4 under the Third Schedule of the Act had been amended with effect from 1st April, 1974, and found that the assessee has not proved that the stove wicks would fall under "cotton fabrics" as defined in item 19 of the Central Excises Salt Act, 1944, and therefore, the turnover relating to the sale of stove wicks should be included in the taxable turnover. On appeal by the assessee to the Appellate Assistant Commissioner, he took the view that braided cords and/or stove wicks are not found in item 19, 21 or 22 of the First Schedule to the Central Excises Salt Act, 1944, and, therefore, the claim of the assessee that the stove wicks should be treated as braided cords falling under "cotton fabrics" cannot be countenanced and the claim for exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule to the Central Excises Salt Act, 1944, relate to woollen fabrics and man-made fabrics and have no application to this case. Item 19 as it stood at the relevant time alone is relevant and it runs as under:- '"Cotton fabrics' means all varieties of fabrics manufactured either wholly or partly from cotton and include dhoties, sarees, chaddars, bed-sheets, bed-spreads, counterpanes, table cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials, but does not include any such fabric if it contains - (i) 40 per cent or more by weight of wool; (ii) 40 per cent or more by weight of silk; (iii) 60 per cent or more by weight of rayon or artificial silk; or (iv) 50 per cent or more by weight of jute (including Bimlipatam jute or mesta fibre)." The rest of the entry is not very material for our purpose. We have to examine the question whether the stove wicks sold by the assessee would fall under the head "cotton fabrics" within the meaning of item No. 19 of the First Schedule to the Central Excises Salt Act, 1944, and if it does, then, it would also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bonding together of cotton fibres in the shape of a wick by a process of braiding leads to a pattern and a product of utility and even if the end-product is not obtained by resorting to weaving as commonly understood, nevertheless, it would be a fabric resulting from the bonding of cotton fibres by a process of braiding. We are also of the view that the stove wicks' having been fabricated out of cotton will fall within the expression "cotton fabric". Item 19 earlier extracted is an inclusive entry and though it may be that some of the articles included therein under "cotton fabrics" may not in common parlance be so known or called, nevertheless, item 19 is so defined as to take within its sweep cotton fabrics popularly known and recognised as such and also other kinds of fabrics. We are therefore of the view that the cotton stove wicks sold by the assessee would fall within the scope of "cotton fabrics" in item 19 of the First Schedule of the Central Excises Salt Act, 1944. 4. We may now briefly refer to the several decisions to which our attention was drawn. In State of Tamil Nadu v. T.T. Gopalier [1968] 21 STC 451, the question arose whether the term "weaving" is confined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make it useful in stiffening collars in the manufacture of ready-made shirts, it was held that though when a manufacturing or other operation is carried on the cloth, it ceases to be a textile within the scope of item 4 of the Third Schedule, as it then stood, yet, it would be a cotton fabric under item (iia) of section 14 of the Central Sales Tax Act, 1956. In that context, it was pointed out that the circumstance that the stiffening material is prepared out of cotton and put together by a manufacturing process, would not take that out of the category of cotton fabrics. Here also, by the process of braiding, cotton fibres are transformed into a stove wick for use in homes but on that account, it does not cease to be a cotton fabric made out of cotton. In Narayan Venkat Co. v. State of Andhra Pradesh [1978] 41 STC 437, the assessee contended that cotton rags sold by it fall within the definition of "cotton fabrics" in item 19 of the First Schedule to the Central Excises and Salt Act, 1944, and, therefore, exempt from sales tax under item 5 of the Fourth Schedule to the Andhra Pradesh General Sales Tax Act, 1957. In upholding this contention, it was pointed out that it would suffi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e out of cotton were cotton fabrics covered by entry 37 and entry 51 of Schedule I to the Gujarat Sales Tax Act, 1969, and entry 19 of the Central Excises and Salt Act, 1944. It was pointed out that the cutting of cotton cloth into the required size and shape would not make the end-product a different article than cotton fabric and that the impregnation of the cloth with chemical compounds would not take it outside item 19 of the Central Excises and Salt Act, 1944, and therefore, they would fall under entry 37 of Schedule I to the Gujarat Sales Tax Act, 1969, and hence exempt from sales tax. The principle of this decision would also support the case of the assessee that the sale of the stove wicks fabricated out of cotton would still fall within "cotton fabrics" under item 19 of the First Schedule to the Central Excises and Salt Act, 1944. 5. The Allahabad High Court in Palco Lining Company v. Sales Tax Officer, Sector IV, Allahabad [1983] 54 STC 255, had occasion to consider whether collar linings made of two pieces of cloth cut and pressed together on sticking to the other and with no stitching at all in it and which cannot be used as it is as a collar, would cease to be cotto ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
