1984 PLP (Trib (PTD)

3. The Sales Tax Officer further observed that on assessee's representa tion, the Central Board of revenue, vide their letter, dated 25.4‑1977, had held that the furniture made by the assessee (Messrs Chairman Ltd.), is not made wholly of steel and hence it is not covered by item No. 44 of Sales‑tax Notification No. 9, dated 27‑6‑1951, as amended by SRO. 903 (1)/74, dated 2‑7‑19.74. Faced with this situation, the assessee came out with the plea before the Assessing Officer that it was not a manufacturer as metal frames are got manufactured from petty parties and moulded seats and backs are purcha sed after payment of sales tax. However, the Sales Tax Officer repelled this contention and held that the assessee's claim that its products are exempt from levy of sales tax, was not sustainable. Consequently, he passed the assessment order thereby subjecting the entire sales to sales tax. 4.Aggrieved by the order of assessment, the assessee went in appeal before the learned Appellate Assistant Commissioner, who, relying upon the judgment of Sind High Court in the case of Messrs Ghulam Muhammad and Brothers Ltd. v. C. B. R. and others 1973 P T D 221 allowed the appeal, with these observation :‑ ''In view of the above decision, in the appellant's case, his product, i.e. furnitures made him are undoubtedly steel furnitures since the substance which was substantially used by him steel nixed with wood. It is further submitted by the appellant that statute (regarding exemption does not say what specific proportion of steel or wood to be used is an item of furniture so as to make it quality as steel or wooden furniture, nor does not say down anywhere that the item of furniture would be wholly contention. It view of above, I am of the opinion that appellant's product, i. e., furniture which are steel furnitures and according exempt from sales tax, vide item No. 44 of Sales Tax Notification No. 9, dated 2‑7‑1974. In the circumstances, the Sales Tax Officer was not justified to charge tax of Rs. 41085 which is hereby knocked off." It may be added here that be held the finding of the Sales Tax Officer to the effect that the assessee is a manufacturer. He also held after examining the accounts that in a dining table set, the ratio of cost between steel, wood and plastic is roughly 4 x

I i.e. value of steel is 4 times to that of plastic spare parts Likewise, according to him, the frame of chair is made of steel although the seat is of plastic. With regard to the clarification made by the C. B. R., that the furniture manufactured by the assessee, being not made wholly of steel, was not covered by item No. 44 of Sales Tax Notification No. 9, dated 27‑6‑1951 tire learned Appellate Assistant Commissioner held that it was not a circular issued by the C. B. R. and that it was nothing but the opinion of the C. B. R. and hence it did not have any legal force. Hence this second appeal impugnes the learned Appellate Assistant Commissioner's order on the following grounds:‑‑ "(1) That the learned Appellate Assistant Commissioner has erred in treating the furniture of the assessee as steel furniture. (2) That the learned Appellate Assistant Commissioner has erred in treating the assessee's furniture covered under item No. 44 of Sales Tax Notification 0o. 9, dated 27‑6..1951 as amended by S. R. 4. 903 (1)/74, dated 2‑7‑19 74."

5. We haw heard the parties representatives at length and have also examined the different items of furniture which are manufactured by the assessee as produced before us. The learned Departmental Representative submitted that the Assessing Officer has, in unambiguous terms, held that the chairs manufactured by the assessee were made of moulded plastic seats and back, supported by a metal/aluminium frame and that it is not made of steel only. This finding of fact recorded by the Assessing Officer, according to Departmental Representative, has not been demolished by the first appellate authority with reasons and hence his order is bald in this respect. He also emphasised that on the representation of the assessee even the C. B. R. held that the furniture made by the assessee‑respondent is not made wholly of steel and hence it is not covered by item No. 44 of Sales Tax Notification No. 9, dated .27th June, 1951 as amended on 2‑7‑1974. In this view of the matter, the learned Departmental Representative vehemently urged that the impugned order is bad in law and it should be set aside and the order of assessment as made try the Sales Tax Officer, be restored.

6. The learned counsel for the assessee‑respondent, on the other hand, submitted that is the first instance, the C. B. R. was wrong in considering that in order to be eligible for exemption, the furniture manufactured by the appellant should have been made a wholly of steel. In the submission of the p1rned counsel almost 80% of the cost of furniture was of steel while the remaining 20 % pertained to other material. The counsel for the assessee, as already stated, produced all items manufactured by the assessee, before us in order to show that barring the seats arid back which are made of plastic, the frames and other items are all of steel. Frame of chairs are chromed while the frame of the dinning table, etc. are purely of steel. He also sought to place reliance on the ruling of the Sind High Court wherein it is highlight ed as under :‑ "There ore very few items of furniture indeed which one substance and I think the true test must be what is the substance of which the item is substantially made of. Take the case of wooden chair; it would probably have a few, nails made of iron to keep it together but this very small use of iron would not make the chair of iron chair; in ordinary parlance we would yet call it a wooden chair, Even if its cushions were made of foam rubber for instance I think we would still continue to call it wooden furniture."

7. Haling given our earnest consideration to the submissions made by the representatives of the parties, we are clearly of the view of that there is no substance in this appeal. The criteria laid down by the Sind High Court in its ruling reported as 1973 P T D 221 would govern the fate of this case as well. What is to be seen as pointed out by their Lordships, is of which substance the item is substantially made of in the instant case, it has been specifically held by the first appellate authority that the use of the plastic spare parts is much lesser than that of the steel and wood. The use of the plastic seat and the back of the chair, for instance, is just equivalent to the of the use of cushion made of foam rubber in a wooden furniture. The instance given by the High Court may be multiplied by the considerable, items. Take instance, the case of wooden sofa‑set. The sofa‑set cannot be used without cushions which are usually made of foam rubber or of some material other than wood. Notwithstanding this fact, no one would call it but a wooden sofa‑cut. We are thus clearly of the view that notwithstanding the fact that some plastic material is used in the manufacture of furniture by the assessee, it cannot be held that it is not a steel furniture. The learned Appellate Assistant Commissioner has, therefore, rightly decided this issue and we do not find any justification to interfere with his order in this behalf.

8. In the result, the departmental appeal fails and is hereby dismissed. M. Z. M. Appeal dismissed,