Cotton fabric classification controls beltings used in machinery; use as a component does not make them machinery parts.

Cotton and hair beltings containing more than 40% cotton were held to fall within the statutory definition of cotton fabrics incorporated into item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. Their use in machinery did not alter their character into machinery parts or accessories, because entry 81 applied to machinery and its components, not to fabric that remained fabric in substance. The goods were therefore correctly classified as cotton fabrics and not taxed under the machinery-entry classification.

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Issues: Whether cotton and hair beltings sold during the assessment year 1974-75 were classifiable as cotton fabrics under item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959 or as parts or accessories of machinery under entry 81 of the First Schedule to that Act.

Analysis: The beltings contained more than 40 per cent cotton and therefore answered the definition of cotton fabrics contained in item 19 of the Central Excises and Salt Act, 1944, which was incorporated by reference in item 4 of the Third Schedule. The mere fact that the beltings were used in machinery did not convert the fabric into a part of the machinery or its accessory. Entry 81 covered machinery and its parts and accessories, but the material sold remained cotton fabric and could not be equated with machinery components.

Conclusion: The goods were correctly classified under item 4 of the Third Schedule and were not taxable as machinery parts or accessories. The revision had been rightly dismissed, and the appeal failed.

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