2006 (8) TMI 547

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....at they were entitled to an exemption of sales tax on ingots as the ingots were manufactured by using iron scrap as raw material which had already suffered tax. This contention was not accepted by the Tribunal. In the alternative, the assessees had contended that they were entitled to set-off in terms of G. O. Ms. No. 1194 Revenue (S) Dept., dated July 17, 1984 and G. O. Ms. No. 774, Revenue (S) Dept., dated July 9, 1985 with respect to the tax paid on scrap while purchasing it. This contention was accepted by the Tribunal and therefore, these revisions. G. O. Ms. No. 1194, dated July 17, 1984 lays down: "Exemption of tax on sales of scrap made to mini-steel plantscum-rerollers: Notification.--In exercise of the powers conferred by s....

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....nt or the mini-steel plant-cum-reroller purchased the scrap: (a) Invoice No. and date (b) Description of the scrap: (c) Quantity set out in the bill: (d) Amount set out in the bill: I, hereby declare that the purchase of the above scrap is for the purpose of manufacture of ingots/billets of rerolled products in our mini-steel plant/mini-steel-plant-cum-rerolling unit situated in side the State. Signature of the declarant Status and relationship to the dealer Note: This G. O. applies only to mini-steel plants and re-rollers." A bare perusal of this G. O. shows that there was tax exemption on the sale of iron and steel scrap referred to in item 2 of the Third Schedule to the Act, made by dealers to the mini steel plants-cum-rero....

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....ould show that where tax was collected on scrap, it would be reduced on the finished product. Therefore, the contention of the assessees was that in the first instance, they were exempt under G. O. Ms. No. 1194 on the first sale, but in any case if it had been paid, they were entitled to a set-off. The contention of the Revenue on the other hand was that in terms of G. O. Ms. No. 1194, a declaration, which forms part of the G. O., had to be made by the dealer, at the time of first sale of the scrap. If no such declaration was made, G. O. Ms. No. 774 would not apply. The learned counsel for the assessees, however, relied on a judgment of this court in Arun Ispat Udyog, Secunderabad v. State of Andhra Pradesh [2004] 135 STC 140; [2003] 4 AL....