Iron and steel scrap classification: discarded rails sold for re-rolling fall under entry 2-A, not item (xvi).

Unserviceable steel rails sold as scrap for re-rolling were held to fall within entry 2-A of the Third Schedule as "iron and steel scrap", because scrap bears its ordinary meaning of waste material no longer serving its original purpose. Item (xvi) of entry 2 was confined to defectives, rejects, cuttings and end pieces arising from the specified manufactured items and did not extend to discarded rails sold as scrap. The Government Order on set-off did not affect the statutory classification. The assessee was therefore liable as the last purchaser, and restoration of the assessment was justified.

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Issues: Whether the steel rails purchased by the assessee as scrap for re-rolling fell under entry 2-A of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957, or under item (xvi) of entry 2 of that Schedule.

Analysis: The term "scrap" was not defined in the Act and was understood in its ordinary sense as waste material no longer serving its original purpose. The purchased rails were unserviceable rails sold as scrap, not as defectives, rejects, cuttings or end pieces arising from newly manufactured items within item (xvi) of entry 2. Item (xvi) was confined to residuals of the categories already specified in entry 2 and did not cover discarded rails sold as scrap. Entry 2-A, captioned "iron and steel scrap", was wide enough to include scrap even if it was used for re-rolling and not for melting. The set-off claimed under the Government Order did not control the statutory levy under the relevant entry.

Conclusion: The goods were correctly classified under entry 2-A, and the assessee was liable as the last purchaser. The revision restoring the assessment was justified.

Ratio Decidendi: Unserviceable iron or steel sold as scrap falls within entry 2-A of the Third Schedule, and item (xvi) of entry 2 applies only to defectives, rejects, cuttings or end pieces of the specified manufactured items.

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