27 June 2010
Some articles which are held as ‘declared goods’ - Some items which are held as ‘declared goods’ are as follows. Thus, sales tax cannot be levied at rates higher than 4%.
Cast Iron castings are ‘declared goods’ - In case of Pyare Lal Malhotra v. State of Tamilnadu (1976) 3 SCR 168 (SC) = (1976) 37 STC 319 (SC) = 1976 UPTC 282 = AIR 1976 SC 800 - reproduced in 1983 (13) ELT 1582 (SC) - a 4 member bench decision, Supreme Court held that when separate commercial commodity comes into existence, they become separately taxable goods. Central Government, vide its letter dated 28th Feb., 1977 had clarified that ‘Cast Iron’ includes ‘Cast Iron Castings’. One entry in section 14 reads ‘pig iron and cast iron including ingot moulds, bottom plates, iron scrap, cast iron scrap, runner scrap and iron skull scrap.’ In view of this entry and clarification of Central Government, manufacture of Cast Iron Castings from pig iron was not treated as ‘manufacture’ as both fall under same heading and no tax was levied. This circular has been upheld in Vasantham Foundry v. UOI - AIR 1995 SC 2400 = (1995) 99 STC 87 (SC) = 1995 AIR SCW 3556 = 94 ELT 32 = (1995) 5 SCC 289 - 3 member bench. In this case, it was held that cast iron castings in its basic rough form is ‘Cast Iron’ and hence is ‘declared goods’.
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