TaxTMI 
TaxTMI 
2018 (1) TMI 1554
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.... 1% on sale of alleged scrap amounting to Rs. 4,84,56,288/-. 3. The assessee is engaged in the business of Trading of Scraps obtained from Ship Breaking Yard. The return for the year was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. The A.O. observed that the assessee is not collecting any TCS in respect of sale of scrap. The A.O. further found that the assessee has neither submitted Form No. 27C nor obtained Form 27C from the buyers. The A.O. issued show cause notice to the assessee asking it to explain why it should not be treated as an assessee in default within the meaning of Section 206C of the Act. In its reply, the assessee pointed out that sales made against TCS amount....
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....s under:- 8. A perusal of the paragraph-6 of the above judgment, would indicate that certain items generated out of ship breaking activity might be known commercially as "scrap" but they are not waste and scrap. These items are reusable as such, and therefore, would not fall within the definition of "scrap" as envisaged in the Explanation to section 206C(1). The assessee has also contended that it was engaged in the sale of MS pipe, iron which were obtained from ship breaking industries. The assessee himself has not generated any scrap in manufacturing activity, as contemplated in the Explanation. He was a trader. Therefore, the assessee has not sold scrap as such. He has sold the products resulted from ship breaking activity, whic....
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....cted tax at source on the following four items :- 1. Old and used plates 2. Non-excisable (exempted) like furniture, wood, etc. 3. Trading of scrap (melting) 4. High seas sale. 6. The Tribunal, after considering the definition of scrap under clause (b) to section 206C of the Act, has noted that the assessee is engaged in ship breaking activity and the items in question are finished products obtained from the activity and constitute sizeable chunk of production done by ship breakers. Though such products may be commercially known as "scrap" they are not "waste and scrap", as such items are usable as such, and, therefore, do not fall within the definition of scrap as envisaged in the Explanation to section 206C(l) of the Act. ....
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....ad not collected tax at source on items other than items obtained out of the manufacturing activity in the course of ship breaking, the Tribunal has remitted the matter to the Assessing Officer for the purpose granting relief to the assessee under the provisions of section 206C(1) of the Act with regard to only sale of scrap arising out of manufacturing activity in the course of ship breaking after providing due opportunity of hearing to the assessee. Thus, the Tribunal after recording a finding of fact to the effect that the products obtained by the assessee in the course of ship breaking activity are usable as such, and, therefore, do not fall within the definition of scrap has remitted the matter to the Assessing Officer to grant relief ....