RAM CHEMICAL INDUSTRIES Vs. STATE OF ANDHRA PRADESH
HIGH COURT OF ANDHRA PRADESH
RAM CHEMICAL INDUSTRIES
STATE OF ANDHRA PRADESH
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Jeevan Reddy, J. -
(1.) These two tax revision cases are preferred against a common order of the Sales Tax Appellate Tribunal. T.R.C. No. 26 of 1978 pertains to the assessment year 1974-75 while T.R.C. No. 27 of 1978 pertains to the assessment year 1975-76. The only question in these cases is : "Whether deodourised kerosene is kerosene within the meaning of item 31(d) of the First Schedule to the Andhra Pradesh General Sales Tax Act, or is it a different product or article ?"
(2.) The assessee purchases kerosene from the Indian Oil Corporation and removes the odour and impurities therefrom by a process which includes passing compressed air for a period of four to six hours or longer. The learned counsel for the petitioner has placed before us the process which is applied for removing the odour and impurities from the kerosene. It reads as follows : "Kerosene oil procured from Indian Oil Corporation or other sources in taken in 600 liters capacity tank and compressed air is passed for a period of 4 to 6 hours or longer till the kerosene passes the stipulated standards and also till the characteristic smell is completely absent. Later, it is filtered to isolate all suspended particles to get a clear oil which is called DEODOURISED KEROSENE. This is filled into 210 liters capacity mild steel drums and forwarded to the customers. Economy : While passing the compressed air and while the filtration through fullers earth, there is a loss of 40 to 45 per cent of Kerosene. Thus for every 100 liters of kerosene taken the yield is 55 to 60 per cent. Therefore, the costs of deodourised kerosene oil only on raw material costs works out to Rs. 1.86 per litre. To this when the labour charges, fullers earth cost, transport cost etc., is added our selling price is Rs. 3.95 per litre, keeping a margin of 20 per cent gross profit."
(3.) The correctness of this process is not disputed by the department before us nor does the Tribunals order say otherwise.;
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