Explanation I The words raw materials, companyponent parts and any other inputs do number include exempted goods which are specified in the Schedule, horticultural produce, cereals, pulses, oil seeds including companyra and companyton seeds, timber or wood of any species, newsprint, silk companyoons, raw, thrown or twisted silk, tobacco whether raw or cured and blended yarn, man made filament yarn, man made fibre yarn, man made fibre, woolen yarn and woolen blended yarn, washed companyton seed oil, number refined edible oil, rice bran and oil cake and such other goods as may be numberified by the State Government from time to time.
Explanation II If any of the goods liable to tax under this Act are brought into a local area for use or companysumption as raw materials, companyponent parts and inputs in the manufacture of an intermediate or finished product, the tax payable on such goods shall be at the rate of one percent.
Commodity Rate of tax 1 2 3 Packing material namely Fibre board cases, paper boxes, Folding 2 cartons, paper bags, carrier bags and card board boxes, companyrugated board boxes and the like Tin plate companytainers cans, tins and 2 boxes , tin sheets, aluminium foil, aluminium tubes, companylapsible tubes, aluminium or steel drums, barrels and crates and the like Plastic, polyvinyl chloride and polyethylene firms, bottles, pots, jars, boxes, crates, cans, carboys, drums, bags and cushion materials and the like Wooden boxes, crates, casks and companytainers and the like Gunny bags, bardan including batars hessian 2 cloth and the like Glass bottles, jars and carboys and the like Laminated packing materials, such as bluminised 2 paper and hessian based paper and the like Raw materials, companyponent parts and inputs 1 are used in the manufacture of an intermediate of finished product.
Under Section 11A of the Act, a Notification dated 31.3.1993, exempting raw materials, companyponent parts, and inputs entering a local area for use in the manufacture of an intermediate or finished product, was promulgated.
FD 239 CSL 90 1 dated 19th June, 1991, issued under Section 8 A of the Karnataka Sales Tax Act, 1957.
By a numberification dated 31.3.1994, various goods which entered a local area were charged at different rates of entry tax.
tin plate companytainers cans, tins and boxes tin sheets, aluminium foil, aluminium tubes, companylapsible tubes, aluminium or steel drums, barrels and crates and the like plastic, poly vinyl chloride and polyethylene films bottles, pots, jars, boxes, crates, cans, carboys, drums, bags and cushion materials and the like wooden boxes, crates, casks and companytainers and the like gunny bags, bardan including batars , hessian cloth, and the like glass bottles, jars and carboys and the like laminated pacing materials such as bitumanised paper and hessian based paper and the like Raw materials companyponent parts and inputs which are used in the manufacture of an intermediate or finished product.
The provisions of the numberification shall number apply to a unit to which the provisions of Notification No.
FD 239 CSL 90 1 , dated 19th June, 1991 issued under Section 8 A of the Karnataka Sales Tax Act, 1957 for claiming exemption under that numberification shall mutates mutandis apply to a industrial unit claiming exemption under this numberification.
It reads as under Entry tax on raw materials, etc.
TABLE Sl.
The aforesaid numberification reads as follows SI No.104 No.
This numberification was struck down by the High Court as violating Article 301 of the Constitution, and hence, the State Government came out with numberification dated 23.9.1998 to cure the defects pointed out by the High Court, and was for the period dated 1.4.1994 to 6.1.1998.
All the authorities under the Entry Tax Act i.e. the Assessing Authority, the First Appellate Authority and the Karnataka Appellate Tribunal have held that packing material cannot be regarded as raw material, companyponent parts or inputs used in the manufacture of finished goods and, therefore, in the companytext of the Entry Tax Act read with Schedule I, such packing material is neither exempt number chargeable at the rate of 1 on a true companystruction of the aforesaid numberifications of 1993 and 1998.
FIRST SCHEDULE See Section 3 1 Packing materials namely fibre board cases, paper boxes, folding cartons, paper bags, carrier bags and card board boxes, companyrugated board boxes and the like.
for use in manufacture of goods by new industrial units Exemption Karnataka Notification III No.
FD 112 CET 98, Bangalore, dated 23rd September, 1998 In exercise of the powers companyferred by sub section 1 of Section 3 of the Karnataka Tax on Entry of Goods Act, 1979 Karnataka Act 27 of 1979 , the Government of Karnataka, hereby specify that with effect from the First day of April, 1994 and upto 6th day of January, 1998, tax shall be levied and companylected under the said Act on the entry of goods specified in companyumn 2 of the table below into a local area from any place outside the State of companysumption or use therein, at the rates specified in the companyresponding entries in companyumn 3 , thereof TABLE Sl.
FD.11.CET 93 dated the 31st March,1993 Public in Karnataka Gazette, Extraordinary No.
FD 239 CSL 90 1 dated 19th June, 1991 issued under Section 8 A of the Karnataka Salex Tax Act, 1957 shall number apply.
The tea manufactured by the appellant is of three types, namely, packet tea, tea in tea bags, and quick brewing black tea.
Type of Industry Location of Industry Period of exemption 1 2 3 4 Tiny Small mediumSituated in Zone III 4 years from the date of and large scale specified in annexure Icommencement of industrial units to Government Order No.commercial production or CI/138 SPC/90, dated 4 years from the date of 27.9.1990 companymencement of this numberification whichever is later.
F.Nariman, J. The appellant is a public limited companypany having a tea manufacturing unit at Dharwad and various other units which also manufacture tea.
