STATEOF KERALA Vs. SEIMENS LTD

JUDGEMENT

(1.) This revision petition is filed by the State, challenging the order passed by the Kerala Value Added Tax Appellate Tribunal, Ernakulam in TA(VAT) No.1507/11.

(2.) The respondent, having a branch at Kochi, is a registered dealer under the Kerala Value Added Tax Act, 2003 (hereinafter, the 'KVAT Act', for short). M/s.Model Medi Diagnostic Centre (P) Ltd., Pullikal Building, M.G.Road, Ernakulam (hereinafter, the 'MMDC', for short), placed an order with the respondent for the purchase of a Magnetom Espree 1.5T MRI scanner. On placement of the purchase order, the Head Office of the respondent situated at Mumbai imported the MRI scanner from M/s.Siemens, Germany. On clearance from the Mumbai customs, the scanner was transported to the purchaser by truck.

(3.) The consignment was detained at Hosdurg and notice under section 47 of the KVAT Act was issued demanding security. This was objected to by the respondent mainly contending that the transaction is covered by the provisions of the Central Sales Tax Act, 1956 (hereinafter, the 'CST Act', for short). They also contended that for installation and for supply of accessories, there were separate contracts between them and the purchaser attracting the provisions of the CST Act. In the mean time, on furnishing Bank Guarantee towards security, the goods were released. After adjudication, order was passed rejecting the contentions of the respondent that the transaction was covered by section 5(2) of the CST Act, penalty of Rs.34,74,400/-, being double the amount of tax, was levied. This order was confirmed by the first appellate authority also. However, the Tribunal, by the impugned order, upheld the contention of the respondent that the transaction is covered by section 5(2) of the CST Act and accordingly penalty was set aside. It is this order which is challenged before us.