JUDGMENT
R.K. Abichandani, J.
1. The petitioner-firm seeks to challenge the collection of octroi by respondent No. 1-Municipal Corporation on the brass and copper strips/foils/sheets imported by the petitioner to its factory from the place outside the city limits and claims refund of the octroi amount overcharged by the respondent-Corporation on such material. According to the petitioner, the items imported by it fall in entry No. 54(A) and not under entry No. 42(A)(i) of the Schedule ‘A’ to the Octroi Rules.
2. The petitioner has its factory in GIDC Estate at Vatwa for manufacturing radiators for motor cars. The said area was included within the Corporation limits with effect from 5-2-1986. According to the petitioner the raw material comprising of copper and brass strips and foils was imported for the purpose of manufacturing radiators for motor cars. This raw material was not imported for being used directly as a spare part or a component in the motor cars, but it was being subjected to various machining processes for bringing about the final product, radiators.
3. The respondent-Corporation is empowered to impose taxes under Section 127 of the Bombay Provincial Municipal Corporations Act, 1949 (hereinafter referred to as “the Act”) and under Clause (a) of Sub-section (2) thereof, it may impose octroi for the purposes and subject to the provisions of the Act. For this purpose, the Corporation may make detailed provisions in the form of Rules under Section 149 of the Act. Accordingly, respondent No. 1 -Corporation has framed rules regarding octroi under Section 457(7) read with Section 149(1) of the Act. Rule 14 of the Octroi Rules contains the Schedule specifying the items and the rates to be charged on the import of such goods. Items 42(A)(i) and 54(A) which fall in Group ‘E’ in the said Schedule read as under:
42(A)(i)
Motor vehicles, including motor cars, motor taxis, cabs, motorrettes, motor omnibus, motor vans, motor lorries, motor tempos, tractors, bulldozers, excavators, and all other vehicles drawn by motor power and chassis of all these vehicles; their component and their spare parts; including tyres and tubes.
Rate
4% ad valorem.
54(A)
Brass, copper, tin, lead, zinc, and all other non-ferrous metals, their alloys, vessels, utensils, made of these metals, wires, rods, sheets, bars, ingots, circles, tubes and piles not specified in the Schedule.
Rate
1 1/2% ad valorem.
4. It has been contended on behalf of the petitioner that by charging the brass foils or sheets imported by the petitioner as raw material for manufactuing radiators under item 42(A)(i) instead of item 54(A), the respondent-Corporation has wrongly charged the higher rate of octroi from the petitioner which ought to be refunded. The contention on behalf of the respondent-Corporation on the other hand is that the brass foils or sheets were used by the petitioner as components of motor vehicles. It was urged that the brass sheet was a component of radiators and the radiator being a component of motor vehicles, the brass sheet was included under item 42(A)(i) and chargeable at a higher rate of octroi duty. Therefore, the raw material imported by the petitioner was chargeable under item 42(A)(i) of the Octroi Rules at a higher rate prescribed therein. It was further urged that in any event the petitioner was not entitled to refund of octroi which must have been included in the price of radiators and passed on to the consumers.
5. Admittedly, the petitioner manufactures car radiators and in that process uses brass or copper sheets, strips or foils as a raw material. It appears that by office circular No. 30 of 1987-88 dated 8-9-1987 brass foils were directed to be charged for octroi under item 42(A)(i) of the Schedule. A copy of that circular is at Annexure ‘D’ to the petition. As a result of this, according to the petitioner, instead of the rate of 1 1/2% ad valorem octroi payable on such material, the Corporation was charging at the rate of 4% ad valorem.
The question, therefore, arises whether the brass or copper sheets or foils can be said to be the components or spare parts of motor vehicles. A spare part of a motor vehicle would be its part not in actual or regular use at the time spoken of, but carried, held or kept in reserve or which could be obtained for future use to replace the similar part. In other words, it is an additional or extra part which can be used in a motor vehicle to replace the original part. It is obvious, therefore, that a spare part of a motor vehicle should be such a part of a motor vehicle which is capable of replacing the existing part of a motor vehicle. A brass or copper foil or sheet by itself cannot be said to be a spare part of a motor vehicle as it cannot replace any existing part of a motor vehicle.
6. It was urged on behalf of the Corporation that the brass or copper foils, sheets or strips should be treated as components of motor vehicle. The component of a motor vehicle is a part of motor vehicle or its constituent element. A brass or copper foil, sheet or strip by itself cannot be said to be a component part of a motor vehicle. A brass or copper sheet, foil or strip is capable of being put to multiple uses. Even if they are used in a manufacturing process adopted for making radiators for cars, they do not become component parts of a car even though a radiator would be a component of a car. No one, in commercial parlance, would describe a brass sheet, foil or strip or a copper sheet, foil or strip as a component or spare part of a motor vehicle. These items should be understood in their popular meaning or the meaning attached by those who deal in them that is to say in their commercial sense. Thus, the brass or copper sheets, foils or strips will not fall in entry 42(A)(i) of Schedule ‘A’ under Rule 14 of the Octroi Rules framed by the respondent-Corporation, but would fall in entry 54(A) of the Rules. Hence, the respondent-Corporation cannot collect octroi on such brass or copper sheets, foils or strips imported by the petitioner to its factory under item 42(A)(i) of the Schedule.
7. Then arises the question of refund of the octroi amount which is said to be overcharged from the petitioner by the Corporation by treating the brass foils imported by the petitioner as falling under item 42(A)(i) of the Schedule. The amount of octroi paid by the petitioner on the raw material imported for manufacture of radiators would obviously be included in the cost element of radiators which would reflect in the price of radiators. The petition contains no particulars whatsoever as regards the actual payment of octroi on the raw materials imported by the petitioner. The petitioner has nowhere stated that the octroi paid on the said raw material was not included in the price of radiators. When it has not been even stated that petitioner had not passed on the duty to the purchasers of the radiators, the normal presumption would be that they had done so. In absence of any allegation that the octroi duty was not passed on to purchasers, no direction for refund of the octroi amount could be given in favour of the petitioner. The decisions of the Supreme Court in (i) Indian Oil Corporation v. Municipal Corporation, Jullundhar and Ors., , (ii) The Entry Tax Officer v. Messrs Chandanlal Champalal and Co., JT 1994 (3) SC 334, and (iii) a Division Bench decision of this Court in Dhrangadhra Municipality v. Dhrangadhra Chemical Works Ltd., , justify the above collection. The relief of refund of octroi cannot, therefore, be granted to the petitioner.
8. Under the above circumstances, the petition partly succeeds and it is declared That the items of brass or copper sheets, foils or strips imported by the petitioner to its factory from the place outside the city limits do not fall under item 42(A)(i) of Schedule ‘A’ under Rule 14 of the Octroi Rules, but fall under entry 54(A) thereof and the respondent-Corporation is, therefore, directed to charge and collect the octroi accordingly from the petitioner in respect of such material. Rule is made absolute in the above terms with no order as to cost.