TaxTMI 
TaxTMI 
2004 (8) TMI 679
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.... well as the Central Sales Tax Act, 1956 ("the CST Act", for short). The petitioner is engaged in the manufacture of forgings with specialisation in forging jointless rings, ring gears, flanges of sizes up to 750 mm outer diameter. According to the petitioner, the activity that is carried on by it, is the purchase of mild steel ingots and mild steel billets and then to pound them by hammers under great pressure to form high strength parts known as forgings. It is stated by the petitioner that the metal used for forgings is never melted and poured and there is also no foundry process involved in the manufacture of forgings. The main customers of the petitioner are M/s. Bharat Earthmovers Limited, KGF, M/s. Hindustan Motors Limite....
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....nd also the instructions issued by the Government of India, Ministry of Finance Department of Revenue and Insurance) dated December 18, 1975. The assessee also contended before the revisional authority that the assessing authority had not committed any error whatsoever, which called for a revision of assessment orders passed for the assessment years 1990-91 and 1991-92 by the revisional authority. Therefore, it requested the revisional authority to drop the proceedings. The revisional authority, after going through the purchase orders placed by the petitioners customers and also after adverting to the opinion received from the Ministry of Finance dated December 18, 1975 again came to the conclusion that there is some process involved afte....
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....omponents or parts. The counsel referred to the sample copies of orders, invoices and two letters of its customers. They were produced by the counsel at the time of arguments. The sample copies of orders, invoices and two letters of BEML, dated August 2, 2002 and Hindustan Motors Limited, dated July 31, 2002 make it clear that goods ordered and supplied were in machined condition termed as proof machined condition and the products were according to the specifications such as bushings, flange, gear, gear drive, gear crank, joint yoke, ring gear, shaft, screw, sleeve, ring hub, lockup, gear front internal and fly wheel. No doubt it is stated in the opinion letters of BEML and Hindustan Motors Limited, that proof machining is only to detect fl....
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....ional authority and also the Tribunal were not justified in coming to the conclusion that what is processed and sold by the petitioner to his customers is not forgings and therefore, not declared as goods falling under section 14(viii) of the CST Act read with section 5(4) of the KST Act. It is his further contention that the findings of the revisional authority and the Tribunal that by the process of production of forgings, the end-product would be rough and unmachined and the process of "proof machining" would change the identity of the forgings is unsustainable in law. The learned counsel has also shown to this court the samples of rough forging and the end-product after the proof machining to demonstrate that the proof machini....
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.... Americana (Vol. II, page 599) the word "forging" has been defined as "Forging is the shaping of metal by compressing between a hammer or ram and an anvil". In the most primitive form of the process, the metal is held in a large block, or anvil and beaten into the desired shape with a hammer. The expression "forgings" is explained in the letter of the Ministry of Finance dated December 18, 1975 as follows: "(i) Forgings.--The term 'forgings' under section 14(viii) would include crank shaft forgings, main shaft forgings, drop arm forgings, bearing bush forgings, wheel forgings, gear blank forgings, lever forgings for lift link assembly, front nut forgings, clutch plate lever forgings, differential....
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.... Iron and steel, that is to say,-- (i) pig iron; . . . (viii) discs, rings, forgings and steel castings." The corresponding entry in KST Act, 1957, is entry No. 2(a)(viii) of the Fourth Schedule: "2. Iron and steel, that is to say,-- (a)(i) pig iron . . . (viii) discs, rings, forgings and steel castings." The entry under section 14(viii) of the CST Act, 1956 and entry No. 2(a)(viii) of the Fourth Schedule to the Act speak of "forgings". In the present case, the activity of the petitioner as stated by the petitioner and accepted by all the authorities under the Act is that the petitioner-company uses mild steel ingots, mild steel billets and pounded them under great pressure to make the forged parts such as s....