Girija Jagannath, Member (A) -
(1.) THIS is an appeal preferred against the orders of the Deputy Commissioner (CT), Nellore, in proceedings R.V. No. 33/90 -91, dated 30.10.1992, revising the orders of the Commercial Tax Officer No. I, Nellore -2, in proceedings Assessment No. 21088/87 -88, dated 2.11.1988. The appellant is a manufacturer -cum -dealer in paper and was assessed on a net turnover of Rs. 2,21,43,520/ -, which included a turnover of Rs. 84,68,917/ - relating to the first sales of paper within the State during the period from 15.6.1987 to 31.3.1988, which was taxed by the Commercial Tax Officer, at the basic rate of 4 per cent besides additional tax and surcharge. 'Paper', though liable to tax at the basic rate of 7 per cent vide entry 143 of the First Schedule to the A.P.G.S.T. Act, the concessional rate of 4 per cent was available to small paper mills using non -conventional resources, vide G.O.Ms. No. 573, dated 9.6.1987 read with G.O.Ms. No. 912, dated 20th October, 1990, which was granted by the Commercial Tax Officer. According to the revising authority, the appellant had used more than the prescribed percentage of imported paper pulp and therefore not eligible for the concessional rate of 4 percent. Accordingly, he revised the assessment and enhanced the basic rate applicable to 7 percent. The appellant is therefore aggrieved and has preferred this appeal.
(2.) THE point to be considered is whether the turnover of Rs. 84,68,917/ - is eligible for concessional rate of 4% vide G.O.Ms. No. 573, dated 9.6.1987 read with G.O.Ms. No. 912, dated 20th October, 1990? As per G.O.Ms. No. 573, dated 9.6.1987, the tax leviable with effect from 15.6.1987 under Section 5(2) read with item 143 of the First Schedule to the A.P.G.S.T. Act shall, in respect of paper and paper boards manufactured by small paper mills using straw, bagasse, waste paper and other non -conventional raw materials, be at the rate of 4% in the rupee at the point of first sale in the State. The A.P. State Government then issued a G.O.Ms. No. 912, dated 20.10.1990 indicating the conditions for availing the reduced rate of tax on paper and paper boards manufactured by small paper mills using non -conventional raw materials. As per this G.O., the following are the criteria: -
(a) Production capacity - not exceeding 24,000 tons P.A.
(b) Submission of a certificate from Superintendent of Central Excise.
(c) Imported wood pulp usage shall not exceed 15%.
(d) The mill shall not have bamboo/wood pulping plant.
(3.) IT is urged by the appellant that the revision was uncalled for as there was no error in the assessment, and that the Deputy Commissioner (CT) ought to have appreciated that it was the quantum of usage of wood pulp, vis -a -vis total raw material used in the industry, which was relevant and not the quantum of wood pulp used vis -a -vis the total production of paper, for the purpose of granting concessional rate. It is urged that the revising authority further compounded his mistake by trying to compare the values of wood pulp used and the value of the finished product instead of comparing the quantities. The revising authority was also misguided in banking upon appellant's letter dated 28.2.1990 wherein it was stated that 20 percent of wood pulp was used for manufacture of paper along with chemicals etc. He failed to see that the letter was issued without reference to any figures and cannot be said to bind the assessee to its alleged admission that the percentage of wood pulp used was about 20 percent. In fact, by its letter dated 13.5.1991, the appellant gave full quantitative details of production and consumption of raw -material which was not rejected by the Deputy Commissioner. From such figures, it could readily be seen that the tonnage of wood pulp used, of 1530.609 Metric Tonnes worked out to 12.7 percent of the quantum of total raw -material used which was 12,050.269 Metric Tonnes. There was no rationale in comparing the quantum of wood pulp used to the quantum of paper produced as it was not the intention of the said G.Os., referred to above. The G.Os., contemplate concessional rate of tax to encourage those paper mills which manufacture, paper using non -conventional raw -material i.e., other than wood pulp which is depletable resource. Therefore, the ceiling of 15 per cent for wood pulp applies to the proportion of wood pulp used in comparison to the total raw -material used considering quantum thereof. Accordingly, the revision was without basis and liable to be set aside.;