TaxTMI 
TaxTMI 
2026 (4) TMI 1350
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....Pravesh Per Kar Adhiniyam, 1976 (hereinafter referred to as 'the Entry Tax Act'), treating these items as 'incidental goods' within the meaning of Section 2(hh) of the M.P. General Sales Tax Act, 1958 (hereinafter referred to as 'the GST Act'). 2. The petitioner, Hindustan Copper Limited, is a Government of India company engaged in copper ore mining at Malajkhand, District Balaghat. It operates a plant for processing copper ore into copper concentrate. The copper ore, after being crushed through primary gyratory and secondary crushers, is conveyed to a Ball Mill where it is ground into fine powder. In the Ball Mill, Grinding Media Balls of 80 mm diameter are fitted with the aid of Rubber Liners. The ground ore is thereafter processed with chemicals and water to produce copper concentrate. It is undisputed that the Ball Mill is a machine. The Grinding Media Balls and Rubber Liners are components without which the Ball Mill cannot function. Both items have a working life of approximately six months, after which they are replaced. 3. The assessment cases pertaining to the aforesaid years have had a chequered history. At each stage, from the original asses....
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.... or whether they are plant and machinery, which stand altogether outside the two categories defined above. 8. A Constitution Bench of the Madhya Pradesh High Court, in the celebrated decision in Commissioner of Sales Tax, M.P. v. Vippy Solvex Products Pvt. Ltd., settled the fundamental distinction that governs this field. It was laid down that plant and machinery are not 'incidental goods' because they are not used 'in' the process of manufacture in the sense contemplated by the definition, rather, they are goods used 'for' carrying out manufacture. Manufacturing is conducted through and by means of plant and machinery, plant and machinery themselves are the instrumentalities of production and not goods consumed or used in the course of manufacturing. This distinction between goods used 'for' manufacture (plant and machinery) and goods used 'in' manufacture (incidental goods) is the cornerstone of the jurisprudence under the Entry Tax Act in Madhya Pradesh. The revisional authority, while acknowledging the force of this decision, sought to distinguish it by observing that although Grinding Media Balls and Rubber Liners are parts of the Bal....
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....nvolvement of an article in a process does not, by itself, render it a consumable or distinct commodity unless it loses its identity in the course of such use. When read in conjunction with the settled position that components essential to the functioning of a machine partake the character of the machine itself, it becomes evident that integral parts of machinery, which enable the very operation of the machine, cannot be classified as 'incidental goods' merely because they come into direct contact with the material being processed or are subject to wear and tear. 13. From the material on record, the following uncontroverted technical facts emerge regarding the nature and function of grinding media balls and rubber liners in the ball mill: (i) The ball mill is an indisputably recognised piece of industrial machinery used for grinding crushed ore into fine powder as an essential step in the manufacture of copper concentrate. (ii) Grinding media balls of 80 mm diameter are fitted inside the ball mill cylinder. The grinding action being the very purpose of the machine is achieved through the collision and friction between the rotating steel balls and the ore materi....
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....o a manifest error in treating the direct physical involvement of Grinding Media Balls and Rubber Liners in the grinding process as determinative of their classification as 'incidental goods'. This approach erroneously equates functional participation with legal character. The Ball Mill, as a complete unit, performs the act of grinding, and the said items discharge that function only as integral and inseparable components of the machine, not as independent goods deployed in the manufacturing process. If such a test were to be accepted, every active component of machinery which comes into contact with the material being processed would stand reduced to 'incidental goods', thereby obliterating the well-recognized distinction between goods used 'for' manufacture (plant and machinery) and goods used 'in' manufacture. Such an interpretation would defeat the legislative scheme and cannot be sustained. 16. The impugned order is also inconsistent with the binding revision order dated 29.03.1997 passed by the predecessor of Respondent No. 1, which had, after personal inspection of the same plant, categorically held that Grinding Media Balls and Rubber Liners are plant and machinery. Whil....