TaxTMI 
TaxTMI 
2015 (11) TMI 1216
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....ax Appellate Tribunal, Ahmedabad Bench "D" (hereinafter referred to as "the Tribunal") in ITA No.2207/Ahd/2011 has been called in question by proposing the following questions, stated to be substantial questions of law:- "(A) Whether the Appellate Tribunal has substantially erred in law in interpreting the term Scrap as defined in clause (b) to Explanation to section 206C of the Income Tax Act by holding that the words 'waste and scrap' is a singular item and not distinct? (B) Whether the Appellate Tribunal has substantially erred in law in placing reliance upon the case of Navin Flourine Chemicals despite the fact that the Hon'ble Special Bench in the case of Bharti Auto Products had held that the words 'waste and scrap' are two diff....
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....oner (Appeals) was in agreement with the contention of the assessee that though such products may be commercially known as "scrap" they were definitely not "waste and scrap". He further agreed with the contention of the assessee that the items in question were usable as such and, therefore, do not fall within the definition of "scrap" as given in Explanation (b) to section 206C(1) of the Act. Placing reliance upon the decision of the Tribunal in the case of Navine Fluorine International Ltd. v. ACIT, TDS Circle Surat, the Commissioner (Appeals) ordered deletion of the demand of TCS on the said items. The revenue carried the matter in appeal before the Tribunal. The Tribunal in the impugned order has recorded the following findings:- "As ....
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....gaged in ship breaking activity and as given to understand these items/products in question are finished products obtained from the activity. They constitute sizeable chunk of production done by ship breakers. Though such products may be commercially known as "scrap" they are definitely not "waste and scrap". The items in question are "useable as such" and therefore does not fall within the definition of scrap as given in of section 206C(1). Having said so, we restore the issue to Assessing Officer with direction to grant relief to assessee under the provision of 206C(1) of Act, with regards to only sale of scrap arising out of manufacturing activity in course of ship breaking after providing due opportunity of hearing to assessee." 3. M....
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.... the meaning of such expression as defined under clause (b) to the Explanation to section 206C of the Act. It was submitted that the assessee had not collected the TCS on four items as reflected in the order of the Tribunal. It was submitted that the Tribunal has given a finding that the assessee would be entitled to the relief under the provisions of section 206C (1) of the Act only with regard to sale of scrap arising out of manufacturing activity in the course of ship breaking and, therefore, the Tribunal has rightly interpreted the expression "scrap" as defined under the Act and that the impugned order being just, legal and proper deserves to be confirmed. 4.1 In support of his submission, the learned counsel placed reliance upon the....
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.... such items are usable as such, and, therefore, do not fall within the definition of scrap as envisaged in the Explanation to section 206C(1) of the Act. 7. Section 206C of the Act bears the heading, "Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc." and provides that every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage specified in the corresponding entr....