TaxTMI 
TaxTMI 
2018 (12) TMI 676
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3. Briefly stated, the facts of the case are that the assessee mainly deals in purchase/sale of old/waste iron and steel items. A spot verification regarding TDS/TCS compliance was carried out by the Revenue at the premises of the assessee on 24/02/2014. On perusal of the TCS statement and other details submitted by the assessee, the Assessing Officer observed that during the F.Y 2012-13, the assessee had sold scrap amounting to Rs. 1,98,65,861/- and on sale of Rs. 56,07,027/-, the assessee has collected TCS and on sale of Rs. 1,27,10,775/-, TCS has not been collected. 4. Further, the Assessing Officer noted that the assessee has submitted the declaration/copy of income tax return filed by the scrap purchasers amounting to Rs. 68,24,976/- and after giving credit for the same, on the balance sales of Rs. 58,85,800/-, the demand u/s 206C(6A) amounting to Rs. 58557/- and interest u/s 206C(7) amounting to Rs. 26026/- was raised on the assessee on account of non-deduction of TCS and interest liability thereon. 5. Being aggrieved, the assessee carried the matter in appeal before ld. CIT(A) and it was submitted that they have sold Iron & Steel which are usable assets and not arisin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... India. It is in the context of the aforesaid provision that the courts and Tribunal have held, in the context of levy of excise duty, that the waste and scrap not generated from the manufacture of the prime product cannot be subjected to levy of central excise duty in the hands of non manufacturers. This context is completely absent in the Income-tax Act and, therefore, the requirement that the waste and scrap must be generated by the assessee himself from the manufacture of the prime product as required by the Central Excise legislations cannot be read into the Income-tax Act. Section 206C fastens liability on a seller of scrap for collection of tax at source. There is no requirement that such a seller should himself generate scrap from the manufacture or mechanical working of materials undertaken by him. [Para 33] It was contended on behalf of the assessee that section 206C applies to sale of scrap which is generated by the assessee himself from the manufacture or mechanical working of materials. The aforesaid submission cannot be accepted for several reasons. One, the head note of section 206C shows that the provisions of section 206C are applicable to busines....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf nor the scope of 'scrap', as defined in Explanation (b), is restricted to scrap generated from the manufacture or mechanical working of materials undertaken by the seller himself. It is sufficient for the applicability of section 206C if the person sought to be fastened with liability under section 206C is a seller of scrap being waste as well as scrap from the manufacture or mechanical working of materials provided all other conditions for the applicability of section 206C are also satisfied. [Para 34] In the instant case, the assessee himself has declared the goods imported by him as brass scrap before the Customs authorities. He is therefore bound by that declaration. Once it is declared as waste and scrap under the Customs Tariff Act, it necessarily follows that it is in the nature of waste and scrap, which is definitely not usable as such. Be that as it may, the definition of "scrap" under Explanation (b) is wider in scope than the definition of "scrap" as given in the Customs Tariff Act. In this view of the matter, materials recovered on demolition of buildings, old machines/fixtures/fittings sold as scrap, discarded packing materials, etc., would....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was submitted that the buyer from whom tax is required to be collected at source should be one who obtains in any sale, by way of auction, tender or any other mode, goods of the specified nature. Placing reliance on the interpretative tools of noscitur a sociis and ejusdem generis, it was submitted that the phrase 'any other mode' in the expression 'a person who obtains in any sale, by way of auction, tender or any other mode .....' in Explanation (aa)(i) would get its meaning from the words preceding it, namely, 'by way of auction, tender' and, therefore, the said phrase, namely, 'any other mode' would have to be construed narrowly and in the same sense as something akin to auction or tender. It was further submitted that sale of scrap in retail sale/trade could not be construed as sale by way of auction, tender or any other similar mode and, therefore, such a purchaser of scrap in retail sale could not be treated as buyer within the meaning of Explanation (aa)(i) to section 206C. It was contended that the assessee has sold the scrap in retail trade and not by way of auction or tender or any similar mode or mode akin to auction or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de'. The use of the word 'or' in the aforesaid expression shows that all the three phrases (namely, auction, tender or any other mode) are intended to carry independent meaning without being controlled by each other. The use of the words 'any other mode' in the said expression further shows that the mode of sale need not be by way of auction or tender alone but could be by any other mode. The words "any other mode" are words of wide amplitude and, therefore, cover all possible modes of sales in addition to specific modes of sales by way of auction or tender. Hence, they cannot be construed ejusdem generis or as referring to similar sales as those by way of auction or tender. The Legislature has been cautious and thorough-going enough to bar all avenues of escape by using the words 'or any other mode'. These words (i.e., 'any other mode') are not words of limitation but of extension so as to cover all possible ways in which a person (i.e., a buyer) could obtain specified goods in sale. The words 'or any other mode' in Explanation (aa)(i) in section 206C are intended to cover all other modes of sales whic....