TaxTMI 
TaxTMI 
2016 (11) TMI 1079
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....959, was the Tribunal legally justified in holding that the hard-anodised utensils sold by the appellant under his sale invoice dated 12.01.1995 is a heat-resistent cookware under the Schedule Entry C-II- 46A and hence does not get covered by the Schedule Entry C-II-17? (ii) Whether on the facts and circumstances of the case and on true and correct interpretation of the Schedule Entries C-II-24 and C-II-26 appended to the Bombay Sales Tax Act, 1959, was the Tribunal legally justified in holding that the hard-anodised utensils sold by the appellant under his sales invoice dated 06.02.1996 falls under Schedule Entry C-II-26 and hence would not get covered by the Schedule Entry C-II-24? 2. Though the questions of law that have been referred for our opinion are whether the products of the Applicant sold under their invoices dated 12th January, 1995 and 16th February, 1996, fall under Schedule Entries C-II-17 or C-II-46A (prior to 30.09.1995) and Schedule Entries C-II-24 or C-II-26 (after 30.09.1995), Mr Nair, learned counsel appearing on behalf of the Revenue contended that as far as the Applicant's products are concerned, prior to 30.09.1995, the same would fall under Schedu....
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....:- Sr.No. Description of Goods Rate of Sales Tax Rate of Purchase Tax Period 24 Household utensils made of non-ferrous metals excluding those covered elsewhere (Rate reduced to 2 % on sales by RD of household utensils made of non-ferrous metals, entry A-54(2) of Noti. u/s. 41 w.e.f. 27.9.96) 4% 4% 1.10.1995 to date Sr.No. Description of Goods Rate of Sales Tax Rate of Purchase Tax Period 26 Cookware, serveware and kitchenware coated with any material to make heat resistant or non-stick 12% 12% 1.10.1995 to 30.9.1996 6. On a comparison of Schedule Entries C-II-46A and C-II- 46B on the one hand (before amendment) and Schedule Entry C-II-26 on the other hand (after amendment), it is clear that with effect from 1.10.1995 the Schedule Entries C-II-46A and C-II-46B were combined into Schedule Entry C-II-26. Now after amendment, Schedule C-II-26 took within its sweep cookware, serveware and kitchenware coated with any material to make it heat resistant or non-stick. 7. Having set out the relevant Schedule Entries, we shall now turn our attention to the facts. In both these References the facts are almost....
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....sold under its invoice dated 12th January, 1995 would fall under Schedule Entry C-II-46A (and not under Schedule Entry C-II-46B as held by the Commissioner). As far as the products sold under its invoice dated 6th February, 1996 are concerned, the MSTT held that the same would fall under Schedule Entry C-II-26. The MSTT inter alia held that the process of electrolysis and which was performed on the products of the Applicant, formed a coating on the products which made it heat-resistant. By virtue of this coating, the Applicant claimed that its products were nontoxic, non-staining and non-reactive with food. The MSTT held that the anodized utensils were unaffected by high heat, while the coating on a non-stick cookware would come off with mechanical abrasion and deteriorate rapidly with heat in excess of 260° C. Thus, on the basis of this reasoning, the MSTT classified the products of the Applicant sold under their invoice dated 12th January, 1995 under Schedule Entry C-II-46A instead of C-II-46B (as held by the Commissioner). Since after 1.10.1995, Schedule Entry C-II-26 took within its purview cookware, serveware and kitchenware coated with any material making it heat-resistan....
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....s on the words "coated with heat-resistant coatings" appearing in Schedule Entry C-II-46A and the words "treated with stickresistant coatings" in Schedule Entry C-II-46B to contend that a separate coating has to be applied to the products which makes it heat resistant or non-stick before one can classify it under either of the said Schedule Entries. 10. According to Mr Surte, by carrying out the process of anodizing, the Applicant was not putting any coating on the product or treating it with any coating which makes it either heat-resistant or non-stick. Therefore, according to Mr. Surte, the Applicant's products would clearly fall outside the purview of the Schedule Entries C-II- 46A and C-II-46B (before amendment) as well as Schedule Entry C-II- 26 (after amendment). Accordingly, he submitted that the questions of law set out in paragraph 1 above be answered in the negative and in favour of the Applicant and against the Revenue. 11. On the other hand, Mr Nair, learned counsel appearing on behalf of the Revenue, submitted that the products of the Applicant sold under its first invoice dated 12th January, 1995 ought to be classified under Schedule Entry C-II-46B (non-stick co....
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....ectrolyte breaks down and oxygen is deposited at the anode. This oxygen then combines with the aluminium to form oxide and thus builds on the oxide film present on the surface which has stick-resistant properties. This electrochemical process thickens and toughens the naturally occuring protective oxide. Apart from this, the satilon coating (viz. an integral part of the metal built up molecule to the thickness of more than 50 microns, under very carefully controlled conditions, through electrolysis) forms an extremely stable surface that is non-toxic, non-staining and nonreactive with foods. It is highly abrasion resistant and will not scratch. The resulting finish, depending on the process, is the second hardest substance known to man, second only to diamonds. He, therefore, submitted that the products of the Applicant have been correctly classified by the Commissioner in its DDQ order under Schedule Entry C-II-46B (before amendment) and C-II-26 (after amendment). 14. Additionally, Mr Nair submitted that even under the common parlance test, the products of the Applicant could not be understood as ordinary aluminium utensils that would fall under Schedule Entry C-II-17 (before a....
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....e, serveware and kitchenware (which would obviously include utensils) is heat resistant or non-stick by virtue of any coating (whether formed, applied or treated), on the utensils, then the same would clearly fall within Schedule Entries C-II-46A (heat resistant) or C-II- 46B (non-stick) [before amendment], and C-II-26 [after amendment], as the case may be. Therefore, they cannot be classified under Schedule Entries C-II-17 (before amendment) or C-II-24 (after amendment). This is the clear intention of the Legislature in classifying different products in different Entries. 18. The thrust of Mr Surte's argument was that there is no coating on the products sold by the Applicant under its invoices dated 12th January, 1995 and 6th February, 1996 for it to fall either under Schedule Entries C-II-46A or C-II-46B (before amendment) or C-II-26 (after amendment). The corollary to this argument was that the Applicant's products would therefore fall within Schedule Entries CII- 17 (before amendment) and C-II-24 (after amendment), respectively. 19. We are afraid we are unable to accept this submission. For the Applicant's product to fall within either Schedule Entry C-II- 17 (....
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....sil achieves additional qualities, one of which is the quality of stick resistance. In other words, the coating created due to this electrolysis process achieves stick resistant properties, besides other properties such as being non-reactive to food etc. We, therefore, are unable to agree with the main and principle contention of Mr Surte that by the process of anodizing, the products of the Applicant are not coated and/or treated with any coating to fall either under Schedule Entry CII- 46B or C-II-26. We are clearly of the view that by the anodizing process, a coating is formed on the products of the Applicant which gives it stick resistant properties and would therefore definitely fall within Schedule Entry C-II-46B (prior to amendment) and C-II-26 (after amendment). 23. Even from the advertisement of the Applicant's products (pg 67 of the paperbook), it is clear that this is how even the Applicant understood it. The relevant portion of the said advertisement reads thus:- "This 'Armour' finish cookware is made of heavy gauge, commercially pure aluminium metal, which is one of the best and most even conductors of heat. The metal surface is specially toughened to the....