TaxTMI 
TaxTMI 
2025 (8) TMI 1134
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....0518 of 2024 and 50519 of 2024 have been filed by the appellant to assail the order dated 28.04.2023 passed by the Sales Tax Tribunal that upholds the order passed by the Deputy Commissioner for the periods from 2012-13, 2013-14, 2015-16, 2016-17 and 01.04.2017 upto 30.06.2017. Central Sales Tax Appeal Number 50520 of 2024 has been filed by the appellant to assail that part of the order dated 28.04.2023 passed by the Sales Tax Tribunal that rejects the branch transfer of the finished goods for the period 2014-15. 3. The appellant is engaged in the manufacture and trading of explosives. It has a manufacturing unit situated at Nagpur and claims to be having depots in the State of West Bengal and the State of Jharkhand. The appellant manufactures packaged explosives at the Nagpur Unit, which are predominantly used in mining industries. This product is a controlled substance covered by the provisions of the Explosives Act, 1884 and the Rules framed thereunder. 4. Coal India Limited [Coal India] and its subsidiaries are engaged in the business of mining minerals. The subsidiaries of Coal India require a steady supply of explosives for carrying out the mining activity. For t....
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....dge Explosives and Accessories to all subsidiary companies of Coal India Limited including NEC at the following price and terms and conditions, 01. Duration of Contract The RC will be valid for 3 years, from 1st April' 2012 to 31st March' 2015. CIL also reserves the right to extend/shorten the duration of the contract during it's validity period. CIL also reserve the right to rescind/short close the contract in case of breach of terms and conditions of the contract by the bidder. 02. Item description, quantity, unit price & subsidiary allocation - As per Annexure-1. The RC items, quantity for 3 years and unit prices are mentioned at Annexure- '1'. The year wise RC qty for each item shall be indicated separately. The monthly allocation will be placed by the respective subsidiary companies and NEC individually within their share of RC qty as indicated at Annexure-1. Supplies would be strictly governed by the actual requirement of the collieries and as per the allocation/order to be placed by the subsidiary companies & NEC in every month against their specific approved indents only. Initially monthly allocations shall be issued against ....
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....cular item and the balance RC quantity for that item may be purchased from any of the existing RC holders or empanelled "Reserve RC holders" or outside vendors by CIL/ subsidiary on risk purchase basis. ***** 14. Supply of extra quantity 1. In case of failure of a particular RC holder to supply the cartridge explosives or accessories, the unsupplied/balance order quantity may be cancelled/reduced from the contract of the defaulting supplier after giving due notice to him and the cancelled order quantity of the defaulting supplier shall be re-distributed amongst other suppliers, including Reserve RC holders, as the case may be, within that subsidiary co. Supply of extra qty have to be preferably on ex-stock basis. 2. The opportunity to supply extra quantity on exstock basis shall be given first to existing RC holders and if the requirement is not met, then to Reserve RC holders. The distribution of extra quantity amongst the RC holders/ Reserve RC holders may be done preferably in an equitable manner but supplies not being delayed on this ground. Subsidiaries shall have the liberty to obtain extra supplies first from any/all of the RC holders and ....
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.... *****" (emphasis supplied) 7. Annexure-I to the running contract, as mentioned in clause 02 of the running contract, is as follows : ANNEXURE-I Solar Industries India Ltd. Item, Product name, Qty, Price SL Product Product Name Sub. Co. Quantity (3 years) For destination Price 1. LD Column Solar Gel/ Solar Gel-E WCL 11,850 MT Rs. 27,721/MT 2. LD Booster Solar Prime/ Solar Prime-E WCL 3,150 MT Rs. 31,431/MT 3. Permitted-PI Super Coal-I All Sub. 1,151 MT Rs. 60,178/MT 4. Permitted-P3 Super Coal-3 All Sub. 1,955 MT Rs. 59,018/MT 5. Permitted-P5 Super Coal-5 All Sub. 14,700 MT Rs. 63,428/MT 6. Copper Delay Detonator-2.5M Solar Copper Delay Detonator All Sub. 42,520 KN Rs. 8,900/KN 7. Cast Booster-PETN Solar Cast-P All Sub. 1,725 MT 2,49,000/MT Subsidiary wise distribution SL Item Unit ECL BCCL CCL WCL SECL MCL NCL NEC Total 1. P1 MT 14 24 - 360 753 - - - 1,151 2. P3 MT 1,020 - 35 900 - - - - 1,95....
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..... Maddala Thatiah (1964 SCR 3774) f. State of Andhra Pradesh V/s Coromandel Paints & Chemical Ltd (1995 98 STC 82) g. Central Distillery & Breweries Ltd. V/s Commissioner of Trade Tax, U.P., Lucknow (1999 115STC 296 All)) However, this case, in our opinion, turns on its own peculiar facts and is completely covered by the Supreme Court's judgment in IDL Chemical Vs. State of Orissa (2007) 14 SCC 386. According to the counsel for the appellant the facts of IDL Chemical are distinguishable from the facts of this case. We do not agree. We shall now go to IDL Chemical to show how it completely covers the present case. ***** 15. The striking similarities between IDL Chemical and the present case could now be noted. In IDL Chemical the sale of goods from IDL Chemical's factory in Orissa to CIL's subsidiaries was through its depots in other States in pursuance of purchase order dated 24.09.1976. In this case the sale of goods from the appellant's factory in Maharashtra to CIL's subsidiaries in other States is through its branches in other States in pursuance of Running Contract dated 14/03/2012 & 30/03/2015. In IDL Chemical a....
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.... to another state which occasioned as per the running contract executed on 19.10.2012 & 30.03.2015. In our considered opinion, facts of the present case are exactly identical as those are in the Hon'ble Supreme Court's judgment in case of M/s IDL Chemical Ltd Vs. State of Orissa decided on 16.11.2007, Civil Appeal No. 5272 of 2007. It is also seen that Central Sales Tax Appellate Authority, New Delhi in its judgment dated 27.06.2019 in appellants own case in Appeal No. CST/2009-10/2017 & Appeal No. CST/26/2017, held that the same transactions are nothing but inter-state sale for the period 2009-10 & 2010-11. Thus, orders passed in first Appeals by this Tribunal for periods 2009-10 & 201011 are confirmed by CST AA (Central Sale Tax Appellate Authority). In view of the above, we are of the opinion that the transactions involved constitute inter-state sales. Therefore, we find no substance in the appeals. Accordingly, we proceed to pass the following order. ORDER 1. The VAT Appeal No. 361 of 2017, VAT Appeal No. 01 of 2018, VAT SA NO. 01 of 2020, VAT SA No. 02 of 2020 & VAT SA No. 12 of 2022 are dismissed. 2. The VAT Appeal No.11 of 2019....
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....sent appellant in CST Appeal Nos. 09-10/2017 and CST Appeal No. 26/2017 decided on 27.06.2019 wherein Coal India had also entered into a running contract dated 28.11.2007 with the appellant. The Central Sales Tax Appellate Authority had held that all transfer of goods/explosives from the State of Maharashtra to the branches/depots of Solar Industries in other States were inter-State sale. While deciding the appeal filed by Keltech Energies, this Tribunal did not accept the view expressed by the Sales Tax Appellate Authority that it was a case of inter-State sale and held that it was a case of branch transfer of goods by the appellant to its depots in the State of West Bengal and the State of Jharkhand. The relevant portion of the decision of this Tribunal in Keltech Energies is as follows: "23. The Running Contract dated 28.11.2008 would not amount to a contract of sale as it does not obligate the subsidiaries of Coal India to purchase the explosives from the appellant or obligate the appellant to supply explosives. It is merely an agreement between the parties to the effect that they may do business in the future under certain terms and conditions. It is a contract ....
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....cts with multiple manufacturers of explosives in the relevant period; (c) The subsidiaries of Coal India purchased explosives on the basis of their actual requirements and not on the basis of any fixed quantities specified in the Running Contract; (d) The freight on the transport of the goods was borne by the appellant and not by Coal India. The said goods were not insured and were transported on a risk basis; (e) The appellant conducted sales to customers other than subsidiaries of Coal India. This clearly evidences the fact that the appellant has retained the right to divert the explosives and sell it to other customers; (f) The goods were never earmarked for any customer at the time when the truck left the Nagpur Unit. The goods are standardized goods (and not customized goods) and appropriation of the goods to the contract occurs only when the appellant separates out and earmarks the goods for a specific customer at its depots in the destination States; (g) It is clear that the appellant is stocktransferring the goods to its depots on the basis of the internal forecasts for replenishing the stocks of its depots. Subsequently, the goo....
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.... its requirement for the reason that the schedule to the Running Contract mentions the quantities. The quantities mentioned in the schedule were tentative and it has been demonstrated by the appellant that the actual quantities supplied were far lesser than indicated in the schedule to the Running Contract. The Sales Tax Tribunal also held that all subsidiaries of Coal India were under an obligation to purchase the goods from the appellant or its branches situated in the respective States. The Sales Tax Tribunal held that each subsidiary of Coal India had been given the quantities of explosives and accessories to be purchased from the appellant only at the fixed price. This finding is clearly erroneous. The subsidiaries of Coal India had the option to purchase the goods according to their requirement from any one of the five Running Contract Holders. The Sales Tax Tribunal also fell in error in assuming that it was the contention of the appellant that supply of goods in accordance with the indents and the Running Contract would be an agreement to sell, for it was the contention of the appellant that the Running Contract was neither a sale or an agreement to sell and was merely a st....