TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 1083
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.... condition Additional Duty of excise is applicable even to the first part of entry 54 ? (ii) Whether a ground which was not taken before for want of cause of action can be raised when such cause of action arises and therefore whether the Tribunal is justified in concluding that entry 54 is one continuous entry merely because the said issue was never raised by anyone earlier? (iii) Whether an assessee can claim exemption under another entry (entry 51) when exemption of VAT is denied under one entry of Schedule B to the Haryana VAT Act, 2003, especially when the assessee's product clearly and undisputedly falls within the ambit of this another Entry as well ? (iv) Whether exempting Entry 54 of the Schedule B can be interpreted like taxing provision i.e. what is not covered therein is taxable ? (v) Whether exempting entries of Schedule B of the Haryana VAT Act, 2003 are dependent on each other, when no such qualification, express or implied, has been provided by the legislature ?" 5. The appellant in the present case is a private limited company. It is claimed that it is engaged in the business of manufacture of leather cloth/coated fabric/textile fabric, also known as re....
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....eu of sales tax is not applicable on the product being manufactured by the appellant. The observation by the Tribunal that clarification was earlier sought by M/s H.R. Polycoats Pvt. Ltd. and that order was upheld by the Tribunal earlier, hence, the issue could not be raised again is totally wrong for the reason that first of all, there is no estoppel against the appellant to raise a legal issue, which may not have been raised by the party earlier seeking clarification. Secondly, the issue regarding exemption from payment of tax, item being in one of the entries of Schedule 'B', was not raised by that assessee. The only issue on which clarification was sought, was the rate of tax. The minority view of the Tribunal had rightly opined that the item being manufactured by the appellant falls in Entry 51 of Schedule 'B' of the Act and not in its exception clause, hence, entitled to exemption from payment of tax. 8. First raising an argument on the issue whether the goods manufactured by the appellant is a textile, the court was apprised of the process of manufacturing. It was submitted that cotton textile is either coated with PVC/PU or it is laminated with that. In the....
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.... of textile, but still retaining the same in the category of textile. 10. A scheme prepared by the Government of India, namely, "Benefits available under Technology Upgradation Fund Scheme" was referred to, where it is provided that manufacturing chain in textile industry starts right from ginning of cotton till the clothing stage. The appellant, being eligible, got benefit under the scheme. The definition of "cotton fabric", as provided under Section 14 (ii-a) of the Central Sales Tax Act, 1956 was referred to, which provides that cotton fabric is what is covered under different entries of Central Excise Tariff Act, 1985, as mentioned in the Section. Heading 59.03 has been mentioned. Undisputedly, the product being manufactured by the appellant is covered under that entry. Section 14(vii) of the Central Sales Tax Act, 1956 was also referred to which contains the product as mentioned in heading 59.03 of the Central Excise Tariff Act, 1985 in the category of man-made fabric. 11. It was further submitted that the aforesaid definition as provided for in the Customs Act, 1962 and Central Excise Tariff Act, 1985 were referred to by Hon'ble the Supreme Court in M/s Porritts & Spenc....
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....short clause longer than the "comma", hence a mark (:) in punctuation, used to show a break in construction greater than that marked by semicolon (;) and less than that marked by a full stop. The judgment of Hon'ble the Supreme Court in Dr. M. K. Salpekar v. Sunil Kumar Shamsunder Chaudhari and others, AIR 1988 SC 1841 was referred to in support of the argument that "colon" puts a break in sentence. Reliance was also placed upon judgment of Madhya Pradesh High Court in Telecom District Engineer and another v. Pramesh Agrawal and another, 1997(1) MPLJ 173 and a Full Bench judgment of this Court in Rajinder Singh etc. v. Kultar Singh and others, AIR 1980 P&H 1 on the same issue. If both the parts of Entry 54 of the Act are read together and the condition regarding leviability of additional duty of excise in lieu of sales tax is held to be applicable on both of them, that means the "colon" provided in the entry is otiose. It is settled that every word and punctuation mark in a statute has to be given its true meaning. There are no surplusages in an Act. The reason assigned by the Tribunal that the matter was never argued in this manner will not estop the appellant to raise a legal....
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.... Sr. No. 51 to 54 of the Act in Schedule 'B' of the Act. If a product falls specifically in one entry only that entry, will have to be seen for the purpose of grant of exemption and none else. The product being manufactured by the appellant falls in Entry 54 of Schedule 'B' of the Act. Once the product of the appellant falls in Entry 54 of Schedule 'B' of the Act, it cannot claim that same falls in Entry 51 of Schedule 'B' of the Act as well. Earlier the benefit of exemption under Entry 54 of Schedule 'B' of the Act was available as the condition of levy of additional excise duty in lieu of sales tax was being fulfilled. Now with the abolition of that duty, the tax has become payable. It was so opined by the Financial Commissioner in the opinion earlier given in the case of M/s H. R. Polycoats Pvt. Ltd.'s case (supra). The additional duty was abolished w.e.f. 8.4.2011. The dispute regarding taxation started thereafter. In support of the plea, reliance was placed upon State of Maharashtra v. M/s Bradma of India Ltd., (2005) 2 SCC 669; Commissioner of Central Excise, Nagpur v. Shree Baidyanath Ayurved Bhavan Limited, (2009) 12 SCC 419; and ....
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....sioner on an application filed by the appellant was upheld. The clarification regarding taxation was sought by the appellant by filing application under Section 56 (3) of the Act on the following issue: "Whether the product being manufactured by the applicant which is technically known as "Coated Fabric" and in common parlance known as "Rexin" falling under Central Excise Tariff Heading 5903 is covered under entry 51 of Schedule B appended to the Haryana Value Added Tax Act, 2003." 23. In our opinion, the issues, which arise for consideration by this court are: (1) Whether the product being manufactured by the applicant which is technically known as "Coated Fabric" and in common parlance known as leather cloth/"Rexin" falling under Central Excise Tariff Heading 5903 is covered under Entry 51 of Schedule B appended to the Haryana Value added Tax Act, 2003 ? (2) If the goods manufactured by the appellant fall in Entry 54 of Schedule 'B' of the Act, whether condition of leviability of additional excise duty in lieu of sales tax is applicable thereon ? (3) If a particular goods fall in two different entries, whether it is open for the dealer to invoke any of the entrie....
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....cloth tarpaulines and similar other products manufactured with cloth as base as are manufactured in textile mills, powerloom factories and processing factories (but not including transmission belts) provided additional Excise Duty in lieu of sales tax is levied on them. 54. Leather cloth and inferior or imitation leather cloth ordinarily used in book binding: rubber used tissue or synthetic water tissue or synthetic water-proof fabrics whether single textured or double textured and book-binding cotton fabrics provided additional Excise Duty in lieu of sales tax is levied on them. xx xx xx Question No. 1 27. Entry 51 of Schedule 'B' of the Act is in two parts with the condition of additional excise duty being applicable only for second part and not for the first part was held by the Full Bench of the Tribunal in Sidhart Overseas's case (supra), which was accepted by the State. This fact is not even disputed by learned counsel for the State before this court. The Full Bench of the Tribunal in the aforesaid order opined as under: "38......Therefore, we set aside the impugned order and on true and correct construction of the entry hold that - (i) All va....
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....ies of cotton, woolen or silken textiles including rayon, artificial silk or nylon that carries no weight as and when the product of the applicant specially falls in Entry 54 so the support of a general entry cannot be taken by him. The decision of the Hon'ble Apex Court taken support of by the applicant does not help him in his case as there is specific and clear Entry 54 covering the product manufactured by the applicant and hence the applicant's contention that the product falls in Entry 51 is not correct and devoid of any merit. In the light of the above, it is clarified that PVC coated fabric commonly known as rexin is taxable under the Haryana Value Added Tax Act, 2003 being covered Entry No. 54 of Schedule B and the same being declared goods falling under clause (vii) of Section 14 of the Central Sales Tax Act, 1957 is liable to tax accordingly." 29. A bare perusal of the aforesaid opinion shows that the claim of the appellant that the product manufactured by it falls in Entry 51 of Schedule 'B' the Act was rejected on the ground that it specifically falls in Entry 54 of Schedule 'B' of the Act, hence, there being specific entry, the general entry ....
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....as, having regard to newly developing materials, methods, techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language, be regarded as 'textiles'.... The character of a fabric or material as textile does not depend upon the use to which it may be put. The uses of textiles in a fast developing economy are manifold and it is quite common now to find 'textiles' being used even for industrial purposes. If we look at the Customs Tariff Act, 1975, we find in chapter 59 occurring in section XI of the First Schedule that there is a reference to "textile fabrics" and textile articles, "of a kind commonly used in machinery or plant' and clause (4) of that chapter provides that this expression shall be taken to apply, inter alia, to "woven textile felts...." of a kind commonly used in paper-making or other machinery....". This reference in a statute which is intended to apply to imports made by the trading community clearly shows that 'dryer felts' which are 'woven textile felts.... of a kind commonly used in paper-making machinery' are regarded in common....
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.... prepared which is coated on a paper which is called 'release paper'. (ii) A cotton fabric is pasted on the release paper. (iii) This is passed through a heated oven and the resin paste due to the process of heating is coated on the textile fabric. (iv) The release paper is removed and the final product so manufactured is called 'PVC Coated Fabric'." 35. If considered in the light of the aforesaid judgments of Hon'ble the Supreme Court and Allahabad High Court, as referred to above, it can be opined that the product being manufactured by the appellant, namely, coated fabric also known as leather cloth/rexin falls in the term 'textile'. Question No. (2) 36. It is the admitted case of the parties that the goods manufactured by the appellant fall in Entry 54 of Schedule 'B' of the Act. The issue is as to whether the condition regarding leviability of additional excise duty in lieu of sales tax is applicable. To address the issue, we need to analyse the entry first. The same has been reproduced in paragraph No.26 above. 37. The contention raised by learned counsel for the appellant was that the Entry is in two parts divided by a 'colon....
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....Entry 21 in notification dated 17.4.2003. 39. Schedule 'B' was substituted vide notification dated 30.6.2005. The Entries, which were at Sr. Nos. 18 to 21 of Schedule 'B' of the Act, were given new Sr. Nos. 51 to 54 of Schedule 'B' of the Act. There was no change in the manner Entry 18 was incorporated vide notification dated 30.6.2005. There was a change in the manner the exceptions and conditions were provided against the goods mentioned in Entries 52 and 53 of Schedule 'B' of the Act in the notification dated 30.6.2005, comparable to Entries 19 to 21 in the notification dated 17.4.2003. The language as used in Entries 52 and 53 of Schedule 'B' of the Act does not make any change in intent, however, Entry 54 of Schedule 'B' of the Act needs to be analysed with reference to the words used therein and the punctuation mark. 40. Much stress was laid at the time of arguments by learned counsel for the appellant on the punctuation mark colon used in Entry 54 of Schedule 'B' of the Act. Colon has been defined as "break in sentence" [Collins Gem Dictionary]; "it can be used to separate two sharply contrasting and parallel statemen....
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....effect of any auction made by the Government; or to stay the proceedings for the recovery of any dues recoverable as land revenue unless adequate security is furnished." 43. It was opined that use of punctuation mark semi-colon in the later part of the provision has the effect of making disjunctive with the earlier part, hence, the condition as laid down was applicable only for the later part and not the earlier part. Relevant paragraph thereof is extracted below: "In view of the fact that in between the Ist part i.e. "to restrain any auction intended to be made or," and the 2nd part i.e. "to restrain the effect of any auction made by the Government;" there is comma, after the word or, but subsequent to the second part i.e. restrain the effect of any auction made by the Government, there is a semi-colon, the effect of which is disjunctive to the third part. Thus, the requirement of furnishing of adequate security relates to the third part. In view of this, the argument of the learned counsel for the appellant is sans substance and is rejected." 44. Once a punctuation mark has a specific meaning, it has to be given effect to. It cannot be treated as otiose. Meaning thereby, ther....