TaxTMI 
TaxTMI 
2009 (2) TMI 778
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....he respondent-authorities are of the view that this should come under the residuary entry in Schedule CA to the VAT Act and exigible to tax at 12.5 per cent. The applicants made a reference to the Public Relations Officer, Directorate of Commercial Taxes, Government of West Bengal, on June 23, 2006 seeking clarification as to the applicable rate of tax (VAT) on "paper coated abrasives" being dealt in by them. In reply to that query, the Assistant Commissioner of Commercial Taxes/Public Relations Officer, Commercial Taxes Directorate, by his memo No. 833CT/PRO dated July 18, 2006 informed the applicants that super-abrasives, non-woven abrasives, bonded abrasives other than stone for polishing floors, etc., would be taxable at four per cent under section 16(2)(b) of the VAT Act vide entry at serial No. 83(a) of Part I of Schedule C. The applicants under the said memo were further informed that paper, coated paper, carbon paper, paper board, paper used for computer printing and newsprint would be taxable at four per cent under section 16(2)(b) of the VAT Act vide entry against serial No. 53 of Part I of Schedule C to the VAT Act. Subsequently, the Assistant Commissioner of Commercia....
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.... power independently would fall within the expression "super-abrasives, non-woven abrasives and bonded abrasives". The community of power, therefore, in view of the fact that item (a) of the said entry indicates different goods, does not apply to abrasives. The learned advocate stressed that the items, silicon carbide paper and emery paper, being dealt in by the applicants, should come under the category of super-abrasives because of the grits/coating on those types of abrasives as because these are the determinative factors to decide whether any abrasive could be considered as super-abrasive or not. Alternative argument of the learned advocate was that even if the goods in question could not be treated as an item falling under the entry made against (a) of serial No. 83 of Part I of Schedule C, it would very well fall within the items mentioned against (f) of serial No. 83 of Part I of Schedule C which relate to hand tools. It was argued by him that coated abrasives have predominant use in carpentry or masonry. Carpenters or masons use paper coated abrasives for removal of scratches. As per submission of the learned advocate, there is no reason for not treating paper coated abra....
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....l Scale Industries, page 561), learned State Representative submitted that coated abrasives are paper and clothes coated with cattle hide glue, shellac or technical gelatine adhesive and covered with abrasives grains. Coated abrasives, include sand paper, emery paper, emery clothes, gasket paper, fused crystalline, silicon carbide paper and are mostly used for the purpose of removing dust and cleaning the surface for painting. It was, therefore, submitted by him that silicon coated abrasive paper is nothing but a particular variety of coated abrasive. The learned State Representative further submitted that abrasives could be divided in four major classes, such as, (a) super-abrasives, (b) nonwoven abrasives, (c) bonded abrasives and (d) coated abrasives. He further explained that super-abrasives are actually tools used as dressers or grinders with diamond heads. Non-woven abrasives are obtained mostly in the shape of wheels and are soft sponge like substance used for cleaning and mopping, the most popular variety being scotch brite. Bonded abrasives are lump of abrasives available in the shape of wheels of different diameters and dimensions. Crank shaft wheels and cylindrical whee....
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....s made against 83 of Part I of Schedule C to the VAT Act are identical to the entries made against serial No. 197 of the 1994 Act. In addition to this, there was a specific entry No. 11 in Schedule VIIIA to the 1994 Act. The said entry was in respect of hardware goods which included sand paper and emery paper and emery cloth vide serial No. (x) of entry made against serial No. 11 of the said Schedule VIIIA to the 1994 Act. It was pointed out that the Legislature included those items separately under the heading "hardware goods" and not treated it as items falling under "tools" in any form. Since there is no such entry in respect of sand paper, emery paper, emery cloth under the VAT Act, contention of the learned State Representative was that those items should be treated as items falling under Schedule CA to the VAT Act. It was further stressed that "tools or parts of tools ", "tools, implements, cutlery, etc.," are covered by entries under Chapter 82 of the Central Excise Tariff Act whereas coated abrasive paper is covered by entry made under Chapter 68. From a note given in the said Chapter 82, it appears that abrasive materials on a support of base metals provided that the arti....
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....f Commercial Taxes, Public Relations wherein the said authority while replying to letter dated June 23, 2006, addressed to him by the applicants only indicated the rate of tax on items mentioned in the said letter dated June 23, 2006. In the said letter, it was mentioned that Carborundum Universal Limited was charging VAT at four per cent but nowhere it was "mentioned that Carborundum Universal Limited was charging VAT at four per cent on emery cloth (emery cloth blue drill sheet to be very specific) whereas the said Carborundum Universal Limited was also charging VAT at 12.5 per cent on SIC water-proof paper sheet. Had this fact not been suppressed, the Assistant Commissioner of Commercial Taxes, Public Relations, would perhaps been specific while replying to the letter dated June 23, 2006. In support of his contention, he relied on a letter dated June 6, 2007 of the Deputy Commissioner of Commercial Taxes and Public Relations Officer, Commercial Taxes Directorate addressed to the Assistant Commissioner of Commercial Taxes, Central Section (Investigation) wherein he specifically observed "silicon water-proof paper is nothing but sand paper and is not considered any form of tools d....
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....cilitate accurate measurements, the rule, dividers, square and others. Power tools-usually hand-hold motor powered implements, such as, electric drill or electric saw perform many of the old manual operations and as such may be considered as hand tools. A power tool is technically a power driven hand tool or portable power tool: the names distinguish it from the stationary power tools such as the drill press. While power tools are generally driven by electricity, the category also includes small pneumatic tools driven by compressed air, such as impact ranches and hammer. Gasoline engine driven tools (change saws, gas power drills and so on) are not included . . . Among modern power tools are polishers, several kinds of sanders (circular, belt oscillating, reciprocating), shears and nibblers." In the same publication, volume I, page 38, the use of abrasives has been explained as below: "Abrasives: Relatively hard, natural or synthetic material used to grind or polish materials softer than itself. Grinding wheels, oil stones and sand paper are common example of abrasives. The high precision components and expressly smooth surfaces essential in modern machine tools, electric equipm....
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....n the category of power tools as well as in the category of hand tools. This clearly means that hammers and screw drivers when used with the aid of power they become power tools and when such items are used manually they are treated as hand tools. They, however, remained tools by themselves. But we are afraid whether abrasives per se, not capable of being power driven, can be treated at par with power tools as detailed against entry 83(a). In both the cases in entry against serial No. 83(a) and 83(f), the expression "such as" has been used. "Such" has been defined by webster as "having the particular quality or character specified; representing or referring to the object as already particularized in terms which are not mentioned". The learned advocate appearing on behalf of the petitioner relied on a decision of the honourable High Court of Orissa at Cuttack in the case of Foremost Dairies Limited [1993] 88 STC 535. In support of his submission that the entries made against 83(a) to 83(f) are just illustrative and not exhaustive, there is no dispute about it. But at the same time, we should not miss the expression "that is to say" appearing after the word "tools" at the beginning ....
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.... of goods exempted from sales tax in terms of Notification No. 20206-CTA-14/76 dated April 23, 1976 is relevant. The entry relates to sale of 'feed and fodder' such as husk straw, hay, grass, oil-cake and manufactured mixed balanced feed for cattle, poultry and pig. The entry is very wide and in such a case the articles intended to be covered by the entry belong to a wide range, and can take within its sweep any article which is, akin, to any of the indicated articles. 6.. It is clear that baby food of all categories and descriptions were not intended to be encompassed. Otherwise the expression "baby food" would have sufficed. It has to be seen whether the article in question is akin to the illustrated articles. Various trade names have been indicated to signify the intended inclusion. Since merely brand and trade names of products of different manufacturers have been indicated, baby foods of all varieties, trade names and brand names are encompassed. The view of the Tribunal that Angel Baby Milk Food is covered by item (11) of rule 93-I is irreversible. The reference is accordingly answered in the affirmative in favour of the Revenue and against the dealer." A close scr....
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....other items mentioned therein, should not be treated as "hand tools". We have already observed that "a tool is an implement or device used directly upon the piece of materials to shape it into a desired form". We have also observed that abrasives are "relatively hard, natural or synthetic material used to grind or polish materials softer than itself. Grinding wheels, oil stones and sand papers are common examples of abrasives." The learned State Representative in his written submission himself submitted that coated abrasives are papers and clothes coated with cattle hide glue, shellac or technical gelatin adhesive and are covered with abrasive grains. It has also been admitted by him that sand paper, emery paper, emery cloth, gasket paper, fused crystalline, silicon carbide paper fall within the meaning of "coated abrasives". These are mostly used for the purpose of grinding and polishing automobile, furniture, leather, cases of electrical household appliances and mechanical components. We fail to appreciate the submission made by the learned State Representative that for the purpose of being considered as hand tools durability and capacity for repetitive functions should be the ....
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....as to whether the items in question would be treated as an item falling under entry against 53 of Schedule C to the VAT Act. In the case of State of Uttar Pradesh v. Kores (India) Ltd. reported in [1977] 39 STC 8, the honourable apex court observed ". . . that the mere fact that the word 'paper' forms part of the denomination of specialized article is not decisive of the question whether the article is paper as generally understood. The word 'paper' in the common parlance or in the commercial sense means paper which is used for printing, writing or packing purposes. . ." Similar view was taken by the honourable apex court in the case of Commissioner of Sales Tax, Uttar Pradesh v. Macneill & Barry Ltd. [1986] 61 STC 76. In those cases, points for consideration were whether carbon paper or ammonia paper or ferro paper could be treated as paper. In this particular case, silicon carbide paper and emery paper are used for a particular purpose and has no relation with the popular meaning assigned to paper. Paper is commonly understood as a substance which is used for writing or printing or packing or for drawing or for decorating or for covering wall. Considering the use....