JUDGMENT
L. Palamalai, Administrative Member
1. This tax revision case is against the order of the Sales Tax Appellate Tribunal (Main Bench), Madras in T.A. No. 1064 of 1990 dated November 15, 1991.
2. The short point for decision in this case is whether heat exchangers would fall under entry 41-D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, as held by the Appellate Tribunal.
Entry 41-D of the First Schedule to the Act reads as follows :
Generators, generating sets, transformers including voltage stabilizers and parts and accessories of all such goods.
3. The Appellate Tribunal observed as follows :
“These heat exchangers are fitted and they are used as attachment for higher capacity engines and heat exchangers are used to cool the engine fitted in a generator. If the heat exchangers are not fitted, the generator would not work long and the efficiency of the engine would be adversely affected. The appellant has also filed the pamphlet showing the ‘heat exchangers’. The heat exchangers are indispensable accessory of generators and these are fitted to the generators and are used to cool the engine. So, they are indispensable accessory for the generators.”
4. Further referring to the claim of the petitioner that “heat exchangers” would fall under entry 81 of the First Schedule to the Act, the Appellate Tribunal observed that the generators and the parts and accessories are specifically mentioned in entry 41-D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. So, the assessment has to be made only under entry 41-D of the First Schedule and not under entry 81 of the First Schedule to the Act.
5. Mr. K.J. Chandran, learned counsel for the petitioner, contended that heat exchangers are used in various industries like, mechanical, chemical, fertilizer or sugar. Therefore, it cannot be classified as parts or accessories of generator only. Entry 81 of the First Schedule to the Act excludes only those goods mentioned in the First Schedule elsewhere specifically. However, the general classification of parts and accessories would not be called as specifically mentioned in the First Schedule. In the First Schedule, the classification of heat exchangers as such has not been mentioned in any of the items to the Act. Therefore, as against the 12 per cent rate of tax, the correct rate of tax is 8 per cent only.
6. Mr. R. Mahadevan, learned Government Advocate, stated that the Appellate Tribunal has observed that heat exchangers are indispensable accessory of generators and these are fitted to generators and are used to cool the engine. Therefore, the classification made by the Appellate Tribunal is in order.
7. We have considered the contentions carefully and perused the records. The Appellate Tribunal, in its order, has mentioned that if the heat exchangers are not fitted, the generator would not work long and efficiency of the engine would be adversely affected. Thus, heat exchangers is not a part of generator. However, it is used as an accessory so as to increase the efficiency of the generator. As rightly pointed out by the learned counsel for the petitioner, heat exchangers, according to the pamphlet, are used in mechanical, chemical, fertilizer or sugar industries, according to the tailor-made requirements of the customers. In fact, in respect of fixed tube sheet type of heat exchangers, it is seen that it is used in the process industry of chemicals and refinery services, so as to ensure that there is no intermixing of fluids, which would not be tolerated by such industries. Entry 81 of the First Schedule to the Act excludes only specifically mentioned items elsewhere in the Schedule, As rightly argued, heat exchangers have not been mentioned specifically in the First Schedule to the Act. The generic expression of “parts and accessories” would not cover heat exchangers, just because heat exchangers are also used as accessory in generators. In that view, we hold that the classification of heat exchangers in so far as the relevant assessment year is concerned, would be under entry 81 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, taxable at 8 per cent.
Accordingly, the tax revision case is allowed.
And this Tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 10th day of March, 2000.