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During the financial year ending on 31.3.1996, i.e. assessment year 1995-96 the assessee had purchased Tower Cranes from another registered dealer and had availed concessional rate of tax at 4% on the said purchases by producing declaration Form No.37. While computing the tax liability of the assessee for the assessment year 1995-96, the assessing authority had noticed that the Tower Cranes so purchased by the assessee are nothing but machinery covered under Sl. No.1(iii) of Part 'M' of the Second Schedule to the Act and since the company had not fulfilled all the conditions prescribed under the notification No.FD.43.CSL 94(iv) dated 31.3.1994, it was not eligible to claim any benefit under the notification and, therefore, had initiated proceedings under Section 8-A (5)(a) of the Act. In the said proceeding, it was the stand of the assessee-appellant that it is an industrial unit located in the State and the purchase of the machinery made by it is used in the manufacturing of goods for sale and, therefore, eligible and also entitled to take the benefit of the notification issued by the State Government dated 31.3.1994.

The High Court observed that what was purchased by the appellant by the appellant is a "Tower Crane". By no stretch of imagination the High Court observed that "Tower Crane"

would be considered as an industrial input for use either as a 'component part' or as a 'raw material' of any other goods. Accordingly, the appeal was dismissed as noted above.

In support of the appeal, learned counsel for the appellant submitted that a narrow construction has been put on the expression "industrial input". By giving a broader interpretation, it should have been held that the appellant was entitled to get the benefit of the notification.

There is no dispute that a crane is a hoisting machine used to lift and move heavy loads. There are different types of cranes and Tower Crane is one such crane which is mostly used to construct high rise buildings. It has been noted by the High Court that most Tower Cranes also called "Climbing Cranes", have built in jacks that raise the cranes through openings in the floor as the building goes up. The cranes are taken apart and lowered after completion of the buildings. As rightly observed by the High Court the Tower Cranes cannot be considered as industrial inputs for use either as a component part or as a raw material of any other goods.

The outer limit of the amount of penalty is a sum not exceeding the amount equivalent to the amount of tax leviable on the sale price of the goods. It has been accepted by the respondent that the amount of tax payable is Rs.10,28,875/- though originally it was calculated at Rs.10,71,745/-. The appellant had purchased the Tower Cranes to the extent of Rs.1,71,47,917.80 in the year 1995 and had availed concessional rate of tax of 4% on the said purchase by producing declaration in Form-37 i.e. declaration prescribed under Section 5A of the Act.