DVAT - An empty geometry box made of tin and covered under metal containers is not an industrial input Taxable @ 12.5%

IN THE COURT OF COMMISSIONER

DEPARTMENT OF TRADE AND TAXES

GOVERNMENT OF N.C.T. OF DELHI

VYAPAR BHAWAN, NEW DELHI

No.326/CDVAT/2012/90                                                 Dated: 21-12-2012

M/s Pragati Enterprises

Gali No. 4-T, Plot No. 45,

Anand Parbat Ind. Area,

New Rohtak Road, New

Delhi-110005

ORDER

                   Present for the Applicant       :  Sh. K.B. Aggarwal, Advocate

                   Present for the Department    :  Sh. T.C. Sharma, DR

The above named applicant filed an application on 22/11/2012 under section 84 of Delhi Value Added Tax Act, 2004 (hereinafter referred to as the "said Act") and the question put up for determination under the aforesaid provision of law is as under: -

"Whether empty geometry box made of tin is covered under metal containers of Schedule III at Entry no. 84(200)?"

2.          The application has been preferred in the prescribed format DVAT-42 and the requisite fee of Rs.500/- paid through bank draft No. 019190 dated 31/10/2012.

3.          M/s Pragati Enterprises is a registered company and engaged in the manufacturing and trading of empty geometry boxes.

4.          Sh. K.B. Aggarwal, Advocate and counsel of the Company appeared and reiterated the grounds of the determination application. He stated that the empty geometry box made of tin is an industrial input as it is used as a container for keeping pencil, sharpner, footrule, compass etc. So empty geometry box should be covered by sub-entry no. 200 of entry no. 84 of Schedule III i.e. "Metal Containers" appended to the DVAT Act, 2004.

5.         The Departmental Representative stated that industrial inputs are those goods which are notified by the government and generally go into manufacture of other goods. Moreover, these are essential to store and supply the raw materials or finished products manufactured by the industry. Whereas in case of geometry boxes, the manufacturers of compasses, dividers, footrules, setsquares, protectors can be different from the manufacturer of empty geometry box. Further, a trader (who may not be a manufacturer) after purchasing compasses, dividers, footrules, setsquares, protectors etc. may put these items in the geometry box for resale as a unit. From this it is clear that empty geometry box is not essential to store and supply the compasses, dividers, footrules, setsquares, protectors etc. Hence, empty geometry box is not an industrial input.

6.         I have perused in detail the application filed under Section-84 of the DVAT Act, 2004 and heard both the parties. After going through the entry no. 84 of schedule III appended with the DVAT Act, 2004, I agree with the view point of D.R. that the item i.e. empty geometry box made of tin is not an industrial input, thus not covered by sub-entry no. 200 of entry no. 84 of Schedule III appended with Delhi Value Added Tax Act, 2004. Therefore, it is an unspecified item covered under Section 4 (1) (e) of the DVAT Act, 2004 and would be taxed @12.5%. Held accordingly.

(Prashant Goyal) 

Commissioner, VAT