Nippon Audiotronix Ltd. Vs State of Tamil Nadu (Madras High Court)
The Madras High Court examined a challenge to an order of the Sales Tax Appellate Tribunal dated 28.08.2012, which had dismissed the assessee’s appeal for the assessment year 2003–04. The assessee, a registered manufacturer of excisable goods producing sound systems, had offered turnover from sales of car audio systems to tax at 12.5% under Entry 14(vi) of Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. The returns were initially accepted, but a revision notice was later issued proposing tax at 20% plus surcharge on the ground that the products sold under the “Kenwood car audio” logo were imported goods. Despite objections, the assessment was revised accordingly, and penalty for concealment of turnover was imposed.
On appeal, the first appellate authority accepted the assessee’s contention that it had imported only components and spares, which were assembled and manufactured in India along with domestically sourced materials into finished car stereo systems. It was noted that the assessee was a manufacturing concern and that the finished products were cleared on payment of central excise duty. The Revenue’s second appeal before the Tribunal succeeded, leading to the present revision.
