Commercial parlance test confirms exhaust and tail pipes supplied for vehicles are automobile parts, not steel tubes.

Exhaust pipes and tail pipes supplied to a motor vehicle manufacturer were classifiable by their commercial identity and actual use as automobile parts, not as ordinary steel tubes. The Tribunal applied the commercial parlance test, noting that the purchase orders, drawings and specifications described the goods as motor vehicle spare parts and that the First Schedule covered component parts and accessories adapted for use as motor vehicle parts. Further processing by the purchaser did not change their character. The goods were therefore correctly assessed under the First Schedule rather than item 4(xi) of the Second Schedule.

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Issues: Whether exhaust pipes and tail pipes supplied to a motor vehicle manufacturer were classifiable as steel tubes under item 4(xi) of the Second Schedule or as automobile parts under serial No. 3 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The goods were described in the purchase orders, drawings and specifications as exhaust pipes and related motor spare parts for use in motor vehicles. The entries in the First Schedule covered component parts and articles adapted for use generally as parts and accessories of motor vehicles, while item 4(xi) of the Second Schedule covered steel tubes, both welded and seamless. Applying the commercial parlance test and the actual nature and use of the goods, the Court held that the assessee's goods supplied to the motor vehicle manufacturer were automobile parts and not ordinary steel tubes. The Court also agreed that the further processing done by the purchaser did not alter their character as motor vehicle parts.

Conclusion: The goods supplied to the motor vehicle manufacturer were correctly assessed as automobile parts under the First Schedule and not as steel tubes under item 4(xi) of the Second Schedule.

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