TaxTMI 
TaxTMI 
2024 (11) TMI 49
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....ort 'TNGST Act/Act'). In respect of the period 2003-2004, the petitioner had purchased components for the manufacture of submersible pumps and in addition, had also purchased panel boards for sale along with pumps manufactured by it. 2. An assessment had been made on 09.04.2005 bringing to tax, turnover from sale of pumps, motors, scrap and pumpsets at the rates indicated in the schedules. As regards panel boards, the petitioner had purchased the same against Form XVII declarations that had been issued to its vendor, such declarations being specific that the panel boards were to be supplied along with submersible pumps. 3. There is thus no dispute on the position that the panel boards purchased by the petitioner against Form XVII ....
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....12% - 3%). 5. In both first and second appeals, the petitioner was unsuccessful as both authorities confirm the findings in the order of the assessment that the panel boards were independent items liable to tax at the rate of 12%. Reliance was placed on the judgment of the Supreme Court in the case of Northwest Switchgear Ltd. V. Commissioner of Central Excise, New Delhi (2006) 3 SCC 86, reiterated by Mrs. K. Vasanthamala, learned Government Advocate before us. 6. Mr. C. Subramanian, learned counsel for the petitioner would reiterate the fact that submersible pumpsets were sold as integrated units for immediate use by the agriculturists. He would point out that the pumps were unusable without the panel boards and hence, as a business meas....
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....gether in order to render the pumpsets complete. This may well be so. 11. However, in the present case, there is a finding of fact by the assessing authority that reveals to us that the goods supplied are integrated sets, comprising both submersible pump and panel board. In such circumstances, where the department has accepted the nature of final product supplied, we find it difficult to accept the stand that the two items must be treated as separate products liable to tax under different rates as stipulated in the schedules. 12. In the case of Northwest Switchgear Ltd1, the assessee was engaged in the manufacture of switches, fan regulators and distribution boards that fell under Chapter Sub-Headings No. 8536.90, 8414.20 and 8537.00 of t....
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....f part 'D' of the First Schedule taxable @ 12%. 16. However, the admitted position in this case is that the panel boards have not been sold as an independent or stand-alone item, but along with submersible pumps, as pumpsets. In such circumstances, we agree with the assessee that the benefit of reduced rate of tax as stipulated under Section 3(3) of the Act would be available. Section 3(3) of the Act is extracted below: "Sec.3(3) Notwithstanding anything contained in [sub-section (2), (2-A) or (2-C),] but subject to the provisions of sub-section (1), the tax payabale by a dealer in respect of sale of any goods including consumables, packing material and labels, but excluding plant and machinery, to another dealer for use by the l....
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.... extract below the operative portion of the assessment order where the Assessing Authority states thus: 'In respect of purchases of panel board against form XVII in large quantity for sale along with submersible pumps to the agriculturists is not admissible to effect purchases u/s. 3(3) or 3(5) of TNGST. Panel board can be purchased as capital assets by the manufacturing unit. In this case the dealers have effected pale board not for the use of the dealer in their manufacturing activity. It is for the sale to the agriculturists along with their sale of submersible pumps as an accessory like starter, switch and other pipe fittings. Hence, there is no justification in the argument of the dealer that the panel board is an component part ....