TaxTMI 
TaxTMI 
2016 (12) TMI 1429
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....er the Residuary Entry E-1 of the Maharashtra Value Added Tax Act, 2002 (for short, the "MVAT Act") and not under section 14(iv)(v) of the Central Sales Tax Act, 1956 (for short, the "CST Act") read with Schedule Entry C-55(v) of the MVAT Act. The substantial questions of law as framed in this Appeal and arising out of the impugned order, are as follows:- (a) Whether the MSTT was right in concluding that Rigid Frame Columns in dispute are not classifiable under section 14(iv)(v) of the Central Sales Tax Act, 1956 read with Entry C-55(v) of the Maharashtra Value Added Tax Act, 2002 but classifiable under the Residuary Entry of the Maharashtra Value Added Tax, 2002? (b) Whether the conclusion of the MSTT that Rigid Frame Columns are not classifiable under section 14(iv)(v) of the Central Sales Tax Act, 1956 read with Entry C-55(v) of the Maharashtra Value Added Tax Act, 2002 but classifiable under the Residuary Entry of the Maharashtra Value Added Tax, 2002 is perverse in the legal sense of the term? 2. In a nutshell, it is the case of the Appellant that section 14 of the CST Act deals with goods of special importance in inter- State trade or commerce. The goods sold by the Appell....
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....n High Court in the case of Prateek Technocom v/s State of Rajasthan [(2006) 6 VAT Reporter 9 (Rajasthan)]. Simultaneously, the Appellant invoked the procedure for determination of disputed questions (DDQ) under the provisions of the MVAT Act for one of the products supplied by it i.e. RFCs. The invoice number referred to in the said DDQ Application (i.e. ZSB-0023/2010-2011 dated 6th April, 2010) describes the goods sold as "Supply of Pre-Fabricated Building Components (AS PER PACKING SLIP)". In turn, the said packing slip describes the commodities sold as "Rigid Frame Columns and Interior Columns". Accordingly, under the said DDQ Application, the Appellant applied to Respondent No.2 to determine as to whether the RFCs supplied to its customers would fall under Schedule Entry C-55(v) of the MVAT Act. We must mention here that Schedule Entry C-55(v) attracts sales tax at the rate of 5%. (e) By his order dated 9th July, 2013 Respondent No.2 held that the RFCs sold by the Appellant do not fall under Schedule Entry C-55(v) of the MVAT Act and are therefore liable to be classified under the Residuary Entry. In a nutshell, Respondent No.2 held that rolled structural sections do not con....
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....ndustry are the persons who would be conversant with the term "steel structurals". Hence, the said term must be understood in the same sense as it is understood in the trade and commercial parlance. To butter this argument, Mr Sridharan placed reliance on varied material which describes the term "steel structurals". The material on which Mr Sridharan placed reliance is as follows:- (a) In Wikipedia, the term 'structural steel' has been described in the following manner:- "Structural steel is steel construction material, a profile, formed with a specific shape or cross section and certain standards of chemical composition and mechanical properties." (b) The book "Structural Steel: Types, Properties and Products" published by N. Subramanian, says the following:- "The main advantages of structural steel as a building material are its strength, speed of erection, prefabrication and demountability. They are used in load-bearing frames in buildings and as members in trusses, bridges and space frames." (c) Design on welded structures by Omer W Blodgett states the following with regards to structural steel:- "Structural steel is one of the basic materials used in the constru....
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....VAT Act. It would therefore have to be classified in the Residuary Entry, was the conclusion. 7. Mr Sridharan brought to our attention section 14(iv)(v) of CST Act as well as Schedule Entry C-55(v) of MVAT Act (in so far as they are relevant for our purpose) which read as under :- CST Act : Section 14 "14. Certain goods to be of special importance in inter-State trade or commerce.-It is hereby declared that the following goods are of special importance in inter-State trade or commerce:- (i) ...... (i) ...... (iii) ...... (iv) iron and steel, that is to say,- (i) ..... (ii) ..... (iii) ..... (iv) steel bars (rounds, rods, squares, flats, octagons and hexagons, plain and ribbed or twisted, in coil form as well as straight lengths); (v) steel structurals (angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections); ...... ......" MVAT Act - Entry C-55(v) "55 Iron and steel, that is to say,--- (i) ..... (ii) .... (iii) ..... (iv) steel bars (rounds, rods, square flats, octagons and hexagons, plain and ribbed or twisted in coil form as well as straight lengths); (v) steel structurals (angles, joints, channels, tees, sheet pilling s....
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....ntry C- 55(iv) of the MVAT Act which are identical and deal with "steel bars (rounds, rods, square flats, octagons and hexagons, plain and ribbed or twisted in coil form as well as straight lengths)". Mr Sridharan submitted different shapes such as rounds, squares, octagons etc. are mentioned in the bracketed portion of the Sub-Entry relating to "steel bars". However, the shape "oval" for example, is not mentioned in the said Sub-Entry. He submitted that it would be absurd to suggest that oval steel bars would not fall within the Sub- Entry "steel bars" because the word "oval" does not find a specific mention and therefore excluded. Mr Sridharan submitted that section 14 of the CST Act deals with goods of special importance in inter-State trade or commerce. It would be ludicrous to suggest that round or square steel bars are goods of special importance whereas oval steel bars are not. Mr Sridharan submitted that the nature of property of a steel bar would be its length and uniform cross section. The shape of its section is not the criteria for determining whether an item would be a steel bar to determine whether it is goods of special importance as envisaged under section 14 of the....
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....r Sridharan then submitted that one of the reasons for the authorities below to come to the conclusions that they did was that the description of the goods in the invoices submitted alongwith the DDQ Application did not match the description as set out in section 14(iv)(v) of the CST Act or Schedule Entry C-55(v) of the MVAT Act. To assail this finding, Mr Sridharan submitted that the description of the goods in the invoice need not tally or match with the description in the Schedule Entry. What one has to see is whether the goods sold fall within the description used in the tariff schedule. It is not at all necessary that the description given in the invoice should be identical to and/or match with the description given in the particular Entry. He submitted that what is important to see is whether the broad description of the goods fit in the expression/s used in the concerned Entry. The name of the end product, may, by reason of new technological processes change, but the basic nature and quality of the article may still answer the same description, was the submission. It was therefore the submission of Mr Sridharan that the description of the goods in the invoice is a matter whi....
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....te buildings have rectangular cross sections, but a more efficient cross section for a beam is an I or H section which is typically seen in steel construction. A rafter is one of the series of sloped structural members (beams) that extend from the ridge or hip to the wall plate, downslope perimeter or eave, and that are designed to support the roof deck and its associated lands. 14. Relying upon the aforesaid material, Mr Sridharan submitted that the cross section of the RFCs resemble the letter 'H' or the letter 'I' depending on how it is viewed and are hence also known as 'H' sections or 'I' sections. This is not disputed by the Revenue. He submitted that in the Indian Standards for Structural Engineers 1964, joists have been repeatedly depicted in a pictorial manner as 'I' / 'H' sections which is conclusive evidence of the shape of joists. He submitted that the RFCs of the Appellant are nothing but a cross section of the same being 'H' sections or 'I' sections. This being the case, Mr Sridharan submitted that in any event the RFCs that formed the subject matter of the DDQ Application were clearly covered by the term joists as appearing in sectio....
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....o be kept in mind whilst interpreting statutory provisions. Firstly, each word in the statute must be given meaning and importance, not to treat any word as superfluous or otiose. This is for the simple reason that the Legislature does not use any word without purpose and meaning. Secondly, the meaning of the word is to be interpreted with the context of the words "showed with it". This is the principle of "noscitur a sociis". Applying the aforesaid principle, Mr Sonpal submitted that the words and description of items in the bracketed portion appearing in section 14(iv)(v) of the CST Act and Schedule Entry C-55(v) of the MVAT Act are descriptive, enumerative, exhaustive and restrictive for the items for which are sought to be covered. In other words, only and only when an item being "steel structurals" and described in the brackets, will be covered and nothing else. In a nutshell, Mr Sonpal submitted that though the goods of the Appellant may be "steel structurals", but if they do not fall within the description of the terms as set out in the brackets viz. "(angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections)", then they would not be co....
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.... steel products and hence do not find place in the description as set out in section 14(iv)(v) of the CST Act or Schedule Entry C-55(v) of the MVAT Act. Hence, applying the commercial parlance test also, the products of the Appellant cannot be classified under the aforesaid provisions, was the submission of Mr Sonpal. For all the aforesaid reasons, Mr Sonpal submitted that there is absolutely nothing wrong in the view taken by the Commissioner of Sales Tax as well as the MSTT, requiring our interference. Consequently, he submitted that the questions of law as framed earlier be answered in the affirmative and in favour of the Revenue. 19. We have heard the learned counsel for the parties at length and have perused the papers and proceedings in the Appeal. We have also given our anxious consideration to the DDQ order passed by the Commissioner of Sales Tax as well as the impugned order dated 7th December, 2015 passed by the MSTT. Though elaborate arguments have been made by both sides, we find that the controversy before us is in a very narrow compass. The short question that needs to be answered is whether the RFCs manufactured by the Appellant would fall within section 14(iv)(v) o....
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....y, only some items were included in section 14(iv) for "iron and steel". However, by amendment (with effect from 1st April, 1973), section 14(iv) was recast with the words "iron and steel" followed by the words "that is to say" and 16 sub-entries were added to section 14(iv). Section 14 (in its entirety) reads as under:- "14. Certain goods to be of special importance in inter-State trade or commerce.-It is hereby declared that the following goods are of special importance in inter-State trade or commerce:- (i) cereals, that is to say,- (i) paddy (Oryza sativa L.); (ii) rice (Oryza sativa L.); (iii) wheat (Triticum vulgare, T. compactum, T. sphaerococcum, T. durum, T. aestivum L., T. dicoccum); (iv) jowar or milo (Sorghum vulgare Pers); (v) bajra (Pennisetum typhoideum L.); (vi) maize (Zea mays, D.); (vii) ragi (Eleusine coracana Gaertn.); (viii) kodon (Paspalum scrobiculatum L.); (ix) kutki (Panicum miliare L.); (x) barely (Hordeum vulgare L.); (i-a) coal, including coke in all its forms, but excluding charcoal: Provided that during the period commencing on the 23rd day of February, 1967 and ending with the date of commencement of Section 11 of the Central Sales Tax (....
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....or twisted, in coil form as well as straight lengths); (v) steel structurals (angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections); (vi) sheets, hoops, strips and skelps, both black and galvanised, hot and cold rolled, plain and corrugated, in all qualities, in straight lengths and in coil form, as rolled and in rivetted conditions; (vii) plates both plain and chequered in all qualities; (viii) discs, rings, forgings and steel castings; (ix) [* * *] (x) steel melting scrap in all forms including steel skull, turnings and borings; (xi) steel tubes, both welded and seamless, of all diameters and lengths, including tube fittings; (xii) tin-plates, both hot dipped and electrolytic and tinfree plates; (xiii) fish plate bars, bearing plate bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rails- heavy and light crane rails; (xiv) wheels, tyres, axles and wheel sets; (xv) wire rods and wires-rolled, drawn, galvanised aluminised, tinned or coated such as by copper; (xvi) defectives, rejects, cuttings or end pieces of any of the above categories; (v) jute, that is to say, the fibre ....
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....use covered under sub-heading No. 2401.00, cigars and cheroots of tobacco covered under heading No. 24.02, cigarettes and cigarillos of tobacco covered under sub-heading Nos. 2403.11 and 2403.21, and other manufactured tobacco covered under sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39, 2404.41, 2404.50 and 2404.60, of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (x) woven fabrics of wool covered under heading Nos. 51.06, 51.07, 58.01, 58.02, 58.03 and 58.05 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).] (xi) [Omitted.]" 22. Thereafter, section 15 of the CST Act stipulates the restriction and conditions in regard to tax on sale or purchase of declared goods within a State. This section clearly mandates that every Sales Tax Law of a State, in so far as it imposes or authorizes the imposition of tax on the sale or purchase of declared goods, the same would be subject to the restrictions and conditions as more particularly set out in the said section. One of the conditions is that the tax payable under the said State Sales Tax Law in respect of a sale or purchase of such declared goods inside the St....
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....o "(angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections)". For the reasons stated hereafter, we are clearly of the view that the words appearing inside the parenthesis / brackets in both the aforesaid provisions, namely "(angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections)" cannot restrict or limit the words "steel structurals" appearing outside it. In this regard, a reference can be made to a decision of the Supreme Court in the case of Fuerst Day Lawson v/s Jindal Exports (2011) 8 SCC 333. The issue before the Supreme Court in the aforesaid decision was whether an order, though not appealable under section 50 of the Arbitration and Conciliation Act, 1996 would nevertheless be subject to an Appeal under the relevant provisions of the Letters Patent of the High Court. In other words, even though the Arbitration Act did not envisage or permit an appeal from order, the party aggrieved by it still could have his way by-passing the Act and taking recourse to another jurisdiction. Whilst considering this issue, one of the arguments canvassed before the Supreme Court was that section 50, unlike sectio....
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....sis" as follows: "1 a : an amplifying or explanatory word, phrase, or sentence inserted in a passage from which it is usually set off by punctuation b : a remark or passage that departs from the theme of a discourse : DIGRESSION 2: INTERLUDE, INTERVAL 3: one or both of the curved marks ( ) used in writing and printing to enclose a parenthetical expression or to group a symbolic unit in a logical or mathematical expression." 51.The Law Lexicon, The Encyclopaedic Law Dictionary by P. Ramanatha Aiyar, 2000 Edn., defines "parenthesis" as under: "Parenthesis.-a parenthesis is defined to be an explanatory or qualifying clause, sentence, or paragraph, inserted in another sentence, or in course of a longer passage, without being grammatically connected with it. (Cent. Dist.) Parenthesis is used to limit, qualify or restrict the meaning of the sentence with which it is connected, and it may be designated by the use of commas, or by a dash, or by curved lines or brackets (United States v. Schilling [53 Fed 81 : 3 CCA 440] )." 52. Having regard to the grammatical use of brackets or parentheses, if the words "(and from no others)" occurring in Section 39 of the 1940 Act or Section 37 of....
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....eement shall be governed by and construed in accordance with the laws of The Republic of Korea. Article 23. Arbitration - 23.1: All disputes arising in connection with this agreement shall be finally settled by arbitration in Seoul, Korea (or such other place as the parties may agree in writing), pursuant to the rules of agreement then in force of the International Chamber of Commerce." 26. Whilst interpreting the words in the brackets appearing in Article 23.1, the Supreme Court at paragraph 15 opined thus :- "15. If we see the language of Article 23.1 in the light of Article 22.1, it is clear that the parties had agreed that the disputes arising out of the agreement between them would be finally settled by the arbitration in Seoul, Korea. Not only that, but the rules of arbitration to be made applicable were the Rules of the International Chamber of Commerce. This gives the prima facie impression that the seat of arbitration was only in Seoul, South Korea. However, Ms Mohana, learned counsel appearing on behalf of the petitioner drew our attention to the bracketed portion and contended that because of the bracketed portion which is to the effect "or such other place as the par....
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.... of CST Act or Schedule Entry C-55(v) of the MVAT Act. We are unable to agree with Mr Sonpal that enumeration of the six items in the bracketed portion are with a specific purpose of restricting the meaning of the words "steel structurals" preceding and outside the brackets. In fact, we find that the six items appearing in the bracketed portion of section 14(iv)(v) of the CST Act and Schedule Entry C-55(v) of the MVAT Act are clearly not exhaustive, but descriptive of the words "steel structurals". 28. There is yet another reason why we are of the view that the words appearing in the brackets namely "(angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections)" cannot control or whittle down the width and amplitude of the term "steel structurals" appearing outside it. If one examines section 14(iv)(iv) of the CST Act and Schedule Entry C-55(iv) of the MVAT Act, the same deal with "steel bars (rounds, rods, square flats, octagons and hexagons, plain and ribbed or twisted in coil form as well as straight lengths)". Can it be seriously suggested that oval steel bars would not be covered under the aforesaid Entry? To our mind, the answer to this wou....
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....oned earlier, section 14(iv)(v) of the CST Act and Schedule Entry C-55(v) of the MVAT Act deals with "steel structurals (angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections)". According to the authorities below, the words "or any other rolled sections" would apply to all the other items including "steel structurals". In other words, according to the Revenue, only rolled steel structurals such as rolled angles, rolled joists, rolled channels, rolled tees, rolled sheet piling sections, rolled Z sections or any other rolled sections are covered under section 14(iv)(v) of the CST Act and Schedule Entry C-55(v) of the MVAT Act and nothing else. To put it differently, only goods manufactured by the process of rolling would be covered under the said provisions. We are unable to agree with this interpretation for the simple reason that the authorities below have applied the rule of ejusdem generis in reverse. This, and as rightly submitted by Mr. Sridharan, is impermissible. To support this proposition, the reliance placed by Mr. Sridharan on a decision of the Supreme Court in the case of Thakur Amar Singhji v/s State of Maharashtra AIR 1955 SC 50....
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.... sections" falls to the ground. 31. In any event, and as rightly submitted by Mr Sridharan, significant development in the manufacturing methods has taken place due to improved low carbon steel being available which is more amenable to welding. This apart, the improved welding techniques have made welding of sections a more viable option and in fact improves the structural strength of the material. It is now well settled that technological advancements must be taken into consideration for the purposes of classification of goods in taxing tariffs. In this regard, the observations of the Supreme Court in the case of Porrits & Spencer (Asia) Ltd. Vs. State of Haryana (1979) 1 SCC 82 is apposite:- "6. Now, what are dryer felts'? They are of two kinds, cotton dryer felts and woollen dryer felts. Both are made of yarn, cotton in one case and woollen in the other. Some synthetic yarn is also used. The process employed is that of weaving according to warp and woof pattern. This is how the manufacturing process is described by the assessing authority in its order dated November 12, 1971 "the raw material used by the company is cotton and woollen yarn which they themselves manufactur....
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....ded as "textiles". Take for example rayon and nylon fabrics which have now become very popular for making wearing apparel. When they first came to be made, they must have been intruders in the field of "textiles" because only cotton, silk and woollen fabrics were till then recognized as "textiles". But today no one can dispute that rayon and nylon fabrics are textiles and can properly be described as such. We may take another example which is nearer to the case before us. It is common knowledge that certain kinds of hats are made out of felt and though felt is not ordinarily used for making wearing apparel, can it be suggested that felt is not a "textile"? 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 expre....
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....)(v) of the CST Act or Schedule Entry C- 55(v) of the MVAT Act respectively. It is merely a new process by which "steel structurals" are now manufactured considering the advancement in technology. This by itself, with nothing more, would not disentitle "steel structurals" from being classified under section 14(iv)(v) of the CST Act or Schedule Entry C-55(v) of the MVAT Act. 34. We must also note for the sake of completeness that one of the reasons given by the MSTT for denying the Appellant's goods classification under Schedule Entry C-55(v) of the MVAT Act was that the description of the goods in the invoice of the Appellant did not match the description of the items mentioned Entry C-55(v) namely angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections. They were pre-engineered building components and hence not covered by the said Schedule Entry. We are unable to agree with this reasoning. Mr Sridharan has rightly submitted that the description of the product in the invoice does not have to exactly tally or match with the description in the Schedule Entry. What is necessary to see is whether the product falls within the description used in t....
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....and wire rods are treated as distinct items in commercial parlance. Properzi Rod is a wire rod subjected to the Properzi process and is used for transmission of high voltage electric current." 35. A similar view has been taken again by the Supreme Court in the case of Indian Metals and Ferro Alloys Ltd. v/s Collector of Central Excise. 1991 Supp (1) SCC 125 : (1991) 51 ELT 165 (SC) Paragraphs 12 & 13 of this decision read as under:- "12. The real question, therefore, is whether the goods manufactured by the appellant can be rightly classified under Item 26-AA. We think that the answer to this question should be in the affirmative. It is true that there is some difference in the description of the goods. While Item 26-AA covers only pipes and tubes, the goods manufactured by the assessee are called poles. It is also true that the poles have to be manufactured by applying certain processes of heating and forging to pipes or tubes. But does all this so change the commercial character of the goods marketed by the assessee as to take them away from the scope of Item 26-AA? 13. We think not. The language of Tariff Item 26-AA is very wide. It covers iron and steel products of the descr....