REPUTED PLASTIC COLOURS LIMITED Vs. STATE OF ANDHRA PRADESH
SALES TAX TRIBUNAL
Reputed Plastic Colours Limited
STATE OF ANDHRA PRADESH
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Girija Jagannath, Member (A) -
(1.) THESE three appeals are filed by the same appellant against the orders of the revision passed by the Deputy Commissioner (CT), Abids Division, Hyderabad, withdrawing the set off of tax allowed by the Commercial Tax Officer, Narayanaguda Circle, Hyderabad, in the assessments orders. As a common issue is involved in all the three appeals, they are taken up together and disposed by way of a common order. Particulars of the appeals are as follows: -
The appellant is a manufacturer of plastic cable sheathing compound using locally purchased L.D.P.E. granules and E.V.A. and carbon, the latter being marginal quantities compared to the former. The Commercial Tax Officer assessed sheathing compound manufactured by the appellant under entry 187 of the First Schedule to the A.P.G.S.T. Act, as an article of plastic granted set off for tax paid on raw material falling under entry 186 of the First Schedule in terms of G.O.Ms. No. 574 Revenue(s) Department dt. 9.6.1987. Such set off of tax paid on local purchase of raw materials amounted to the figures indicated above in column No. 5. The revising authority felt that the appellant's product was only an intermediary compound and not an article of plastic and hence liable to tax as general goods. He also concluded that only for such of those finished products which fall under article of plastic enumerated in entry 187 of First Schedule to the APGST Act can a set off be given for tax paid on local purchase of raw material falling under entry 186 of the First Schedule to the APGST Act on the premise that articles of plastic (entry 187) are manufactured from polymers in primary form (entry 186). Accordingly, he withdrew the set off granted by the Commercial Tax Officer by revising the assessment orders. The appellants therefore aggrieved and has filed these appeals questioning the orders of revision. Though the counsel for the appellant strenuously urged that the product was necessarily to be classified as an article of plastic under entry 187 of the First Schedule of the Act, in the course hearing before us from the arguments of both sides several questions have arisen apart from the main issue of whether the product was to be classified as an article of plastic under entry 187 of First Schedule to the Act. There is no doubt that the set off is available only if the product falls under entry 187. Hence, determination of the classification of the product is most crucial.
(2.) THE points to be considered are: -
(1) Was the revising authority justified in withdrawing the set off granted in terms of G.O.Ms. No. 574 Revenue(s) Department, dated 9.6.1987.
(2) Whether the cable sheathing compound manufactured by the appellant is an article of plastic falling under entry 187 of the First Schedule to the APGST Act or is it general goods.
(3) If it is neither general goods nor an article of plastic does it fall under entry 186 itself.
(4) If both the raw material and the finished product fall under entry 186 of the 1st Schedule of the Act, has the appellant carried out any manufacture.
It is urged by the appellant that it was denied a reasonable opportunity by omitting in the show cause notice the ground for revision, that the Deputy Commissioner failed to note that the cable sheathing compound made from plastics and sold by the appellant is used for installation of telecom cable and hence the article of plastic, that the word "including" in entry 187 of the First Schedule to the Act is illustrative and not exhaustive that more than 90 per cent of the product is composed of plastics and hence impugned product was an article of plastic, that an article need not necessarily be a finished product, it could be the raw material for subsequent user. The counsel for the appellant pointed out that the appellant was registered by the D.G.T.D., Government of India and Industries Department of the State of Andhra Pradesh and the Central Excise Department as a manufacturer of plastics. The appellant was a member of the All India Plastic Manufacturers' Association and its product was identified as plastic product by the Central Institute of Plastic Engineering and Technology. Merely because, the appellant's product was in granule form, it did not cease to be an article. Therefore, the action of the revisional authority in withdrawing the set off of Rs. 8,80,404/ - was unjustified and contrary to the provisions of G.O.Ms. No. 574 Revenue(s) Department dt. 9.6.1987.
(3.) IN the course of hearing, the counsel for the appellant took up an alternate ground that the product manufactured also fell under entry 186 sub -item (1) thereof, that the appellant merely added additives and filling to L.D.P.E. granules to make them environment resistant and that no chemical process was involved. On this ground, he urged that no tax was leviable at all on the product as it was not different from the raw -material.;
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