STATE OF TAMILNADU Vs. MEENAKSHI PLASTIC INDUSTRIES

JUDGEMENT

(1.) (Prayer: Tax Case Revision against the order dated 25.5.1995 passed by the Sales Tax Appellate Tribunal (Additional Bench), Coimbatore in Coimbatore Tribunal Appeal No,57 of 1995. The Revenue has come forward with this revision, raising the following questions of law:-

(2.) THE respondent-assessee is the manufacturer of plastic products. THE uncontroverted facts are that in the course of manufacture of the products to be supplied to its customers, the assessee was supplied with certain component parts viz. holder supporter, separator, serving guide roller and spools etc. by the supplier themselves. THE assessment relating to the year 1990-91, the Assessing authority held that for the purpose of sales tax, the sale value inclusive of components supplied by the assessee's customers has also been taken into account in as much as the said value was the basis for charging basic excise duty and special excise duty.

(3.) THE lower Authorities failed to note that when the customers supplied the components to the assessee, it continue to retain its ownership and even though such components form part of the ultimate product, the value of such components did not form part of the ultimate price at which the product was sold by the assessee to its customers. It is not the case of the petitioner that the price fixed by the assessee on the product included the value of components supplied by the customers. As far as the payment of excise duty is concerned, by virtue of the nature of levy of excise duty, the assessee was bound to disclose the whole of the value of the product and as rightly contended by the assessee, whatever excise duty is levied on the components supplied by the customers, to that extent, the customers get the benefit of modvat credit, which can always be claimed and availed at the appropriate time of removal of the product from the customer's premises.