TRISHUL STEELS Vs. MUNICIPAL CORPORATION

JUDGEMENT

(1.) THE petitioner is a partnership firm registered under the Indian Partnership Act, 1932 and was running a factory located at E-4, M. I. D. C. Industrial Area, Chikalthana, Aurangabad. The factory was engaged in processing steel rods. For the purpose of the proceedings activities the petitioner was procuring steel rods and wire from Bombay market and the same used to be transported for the requirements of the Aurangabad factory. After processing the material received from Bombay, at the Aurangabad factory, the processed material was exported out of the Municipal area of the Aurangabad Municipal Corporation. The petitioner therefore, claimed refund of octroi under Rule 16 as framed U/s 454 and 457 of the Bombay Provincial Municipal Corporation Act, 1949 (for short Corporations act) and the claim of the petitioner was turned down by the Corporation. contending that the processed material exported outside the Municipal Corporation limits by the petitioner did not satisfy the requirements of Rule 16 (e) of the octroi rules.

(2.) THE Octroi is imposed U/s 147 of the Corporations Act on all the goods imported into the city for the purpose of consumption, use or sale therein unless they are imported for immediate exportation as provided therein. Sub-section 7 of section 457 of the Corporations Act has empowered the Corporation to make rules in respect of the assessment and recovery of taxes and accordingly the Corporation has framed Octroi rules under the said provision. Rule 4 of the Octori rules empowers the Corporation to levy octroi on all goods of the description given in schedule C on the import of such goods for the purpose of consumption, use or sale within the octroi limits of the Corporation and such octroi shall be payable at the rates specified for such goods respectively in the said schedule. Rule 5 of the said Octroi rules deals with exemptions from the levy of octroi. Rule 16 which is an important for the decision in this petition deals with refund of octroi on export of goods imported for consumption, use or sale and states that refund of 90% of the octroi paid on goods imported for consumption, use or sale shall be admissible on their export subject to all the conditions mentioned in clauses (a) to (h ). Clause (e) which is material in the instant case reads thus : (e) The goods have not since their import changed in any manner whatsoever their original form, conditions state or appearance by any process of manufacture or otherwise : provided that goods shall not be deemed to have changed their form with the meaning of this rule by reasons that they are wood, which since its import has been cut and made into beams planks and rafters or grain or turn, ground and converted into pulses or tobacco converted into stuff or bidis, or rice parched and made into murmuras, or wheat or other grain made into flour. " rule 18 of the Octroi rules provides that if octroi is levied on goods which are eligible for exemption under the Act or these Rules, refund of octroi shall be given to the importer in the manner prescribed by Standing Orders. Standing order No. 14 lays down the procedure to be followed for exporting the goods imported for consumption, use or sale in order to become eligible for obtaining refund admissible under the rules.

(3.) THE petitioner contends that the iron rods and wire which are imported from mumbai and exported outside the Corporation limits after the said goods are processed at Aurangabad factory, they have not changed their original form, condition, state or appearance and the process which is carried out on the said imported material before it exported does not amount to manufacturing process. We are therefore, required to examine whether the raw material imported by the petitioner has in any way undergone any change in its appearance, form, condition or state when it is exported outside the octroi limits of Corporation and whether it has undergone any process of manufacture or otherwise while such a change has been brought in its form or appearance.