2002 PLP (Trib (PTD)

" ....S.R.O. 109(1)/94.‑‑‑In exercise of powers conferred by subsection (1) of section 13 of Sales Tax Act, 1990 the Federal Government is pleased to direct that in its Notification No. S.R.O. 598(1)/90, dated the 7th June 1990, the following further amendment shall be made, namely: In the aforesaid notification, in the table, after Serial No. 13‑A in column (1) and the entry relating thereto in columns (2), (3) and (4) the following new serial number and entries relating thereto shall be added, namely:‑‑ 13‑B. Parts and accessories of motor cars. Respective Headings. If supplied as original equipment before 30th June, 1995 for using them in assembly of motor cars of engine capacity of 1600 CC or less to such assemblers of motor cars as are approved by the Federal Government for the purpose of this Notifica tion. (Sd.) (Alvi Abdul Rahim), Additional Secretary.

6. The perusal of the S.R.O. indicates that if a part or an accessory is supplied as an original equipment to an approved car manufacturer the same is exempt. The fact that goods were supplied as original equipment to a car manufacturers is not disputed.

7. The department simply states that a part of accessory not conforming to Chapter 87 of the Customs Tariff does not fall within the ambit of exemption: Whereas the fact is that the said notification has not restricted a part or an accessory to Chapter 87 only, the language used in Column 2 of the notification reads, "Respective Heading", which means that in case the goods do correspond to the phrase "parts and accessory of motor cars", irrespective of their classification, the goods will be exempt. So in other words we have been left to determine whether or not "floor coverings" supplied by the respondent do fall within the phrase "accessory".

8. For that the appropriate way would be to know what is the exact nature of an "accessory". The term as defined in Webster's Third New International Dictionary is, an object or device that is not essential in itself but that adds to the beauty, convenience or effectiveness of something else. In order to constitute an accessory to a machinery, the article or device must be one that adds to the convenience or comfort or effectiveness of the main product, but it is not essential. It is an equipment usually removable, replaceable for care, safety or completeness.

9. According to the facts available on record, it is an admitted fact that floor coverings are used in all motor cars for comfort and beauty. Accordingly, we believe that the disputed goods are covered within phrase "accessory". An accessory falling within the framework of respective heading, that is in the corresponding classification stands exempt for payment of sales tax within the framework of S.R.O. 109(1)/94. This point of view was also advised by the C.B.R. to the department vide its Letter C. No. 3(6)GST‑1/93, dated 4‑4‑1994 having said that, it is evident that an accessory corresponding to relevant heading i.e., Chapter 58 or 87; as the case may be, become exempt within the framework of S.R.O. 109(1)/94. Be that as it may, we reject this appeal as no case has been made out to interfere with the impugned order. C.M.A./M.A.K./223/Tax (Trib.) Appeal rejected.