TaxTMI 
TaxTMI 
2011 (4) TMI 592
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Trade Tax Act (hereinafter referred to as 'the Act'). 3. The issue, therefore, which falls for our consideration is as to whether or not bottles and crates used by the respondent could be said to be essential apparatus or equipments or components for the establishment and running of the factory of the respondent. 4. The respondent is engaged in manufacturing and sale of soft drink and beverages. The assessee-respondent applied for the grant of eligibility certificate under Section 4A of the U.P. Trade Tax Act read with Notification No. 640 dated 21-2-1997. Pursuant to the aforesaid request, the respondent/assessee was granted an eligibility certificate on 26-5-2000 by the Divisional Level Committee constituted under Section 4A of the Act. The exemptions were granted to the assessee for a period of ten years running from 15-4-1999 to 14-4-2009 or to the extent of 200% of the fixed capital investment of Rs. 53,79,49,612/-, whichever was earlier. The exemption certificate granted on 26-5-2000 stipulates that it was granted for the goods, which were manufactured by the assessee as mentioned in the eligibility certificate. Towards the end of the eligibility certificate ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly in a captive industry where the liquid which is prepared and collected by way of a continuous process in the bottles and thereafter kept it in crates and therefore both bottles and crates are to be accepted as "apparatus" within the meaning of Explanation (4)(b)(i) to Section 4-A of the U.P. Trade Tax Act. 9. The question of law that was framed by the High Court was answered in favour of the assessee holding that such bottles and crates are to be treated as fixed capital investment. It was also held that the period of exemption was for 15 years. 10. The aforesaid order passed by the High Court was challenged by the appellant by filing the present appeal in which we heard learned counsel appearing for the parties. By way of clarification it has to be stated at this stage that in the present appeal what is specifically challenged is first part of the order with regard to bottles and crates forming part of fixed capital investment and not that part of the order granting exemption for a period of 15 years. The appeal, therefore, is restricted to the aforesaid limited issue. 11. The counsel appearing for the appellant during the course of his arguments had tak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imited and Another reported in (1999) 1 SCC 10. It was held by this Court that in respect of an industry manufacturing soft drinks and beverages, it can be said that plant would mean that apparatus which is used for manufacturing soft drinks or beverages and not articles like crates and bottles used for storing the manufactured goods. It was also submitted by the counsel that the High Court erred in enlarging the scope of the definition of the word "Fixed Capital Investment" ignoring the specific words used in the said definition. It was also submitted that the use of word "Apparatus" in the definition of "Fixed Capital Investment" is restricted to such apparatus which are actually used in the manufacture of finished product and that it cannot be extended to such apparatus which are used for storing of finished products. 14. Counsel appearing for the respondent, however, not only refuted the aforesaid submissions but also submitted that the above referred decision of this Court is clearly distinguishable from the facts of the present case in view of the clear distinction between the provision of law upon which the above referred decision was rendered by this Court and the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purposive manner so as to advance the objective of the provision. 12. We find that the object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State. If the test laid down in Bajaj Tempo Ltd. case is applied, there is no doubt whatever that the exemption granted to the respondent from 9-8-1985 when it fulfilled all the prescribed conditions will not cease to operate just because the capital investment exceeded the limit of Rs. 3 lakhs on account of the respondent becoming the owner of land and building to which the unit was shifted..............." 17. The aforesaid object of the relevant provision in the light of other provisions of the Act, makes it crystal clear that the value of investment for equipments, apparatus and components for running the factory and workshop has also to be considered as investment and such value is required to be included within the ambit of fixed capital investment. The wordings of the provision of law which call for our interpretation are not identical....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trial unit. As the Company had applied as a SSI unit, the District Level Committee had to verify the status of the Company as SSI unit and, therefore, it was bound to take into account the above-referred two notifications of the years 1991 and 1993. If under these circumstances, the District Level Committee came to the conclusion that the Company is not entitled to the benefit of deferment in respect of its investment in bottles and crates, it cannot be said that it has acted contrary to law." 19. A careful reading of the ratio of the aforesaid decision would reveal that expression plant and machinery in the said case was intended to take such articles which are required for the purpose of manufacture and not for storage. Besides, the said decision was rendered in the context of the two notifications which specifically excluded value of bottles and crates to be included in the expression "plant and machinery" as the same are used for the purpose of storage of finished products and not used for the purpose of manufacture of finished products. 20. However, in this case, not only the wordings of the Act are wider but there is also no such notification issued by the Sta....