1. During assessment year 1974-75 the respondents sold cotton and hair beltings to the tune of Rs. 73,635. We have to consider whether cotton and hair beltings thus sold are cotton fabric falling under item 4 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959 or whether they should be considered as parts or accessories of machinery falling under entry 81 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. The assessee's claim that these goods are cotton fabrics falling under entry 4 of the Third Schedule and hence sales of such beltings are not liable to tax under Section 8, has been upheld by the High Court.
2. Entry 4 of the Third Schedule, inter alia, covers cotton fabrics as defined in item 19 of the Central Excises and Salt Act, 1944. As both cotton beltings and hair beltings in question contain more than 40 per cent cotton, they fall within the definition of "cotton fabrics" as defined in item, 19 of the Central Excises and Salt Act, 1944. They are, therefore, "cotton fabric" falling under entry 4 of the Third Schedule.
3. The appellant contends that these beltings are used exclusively in machinery and should, therefore, be classified under entry 81 of the First Schedule. This entry covers "all machinery worked by (i) electricity, (ii) diesel, (iii) petrol, (iv) furnace oil, (v) kerosene, (vi) coal including charcoal or (vii) any other fuel or power; and parts and accessories of such machinery...". According to the appellant, beltings are parts or accessories of machinery. However, simply because belts made out of cotton and hair beltings are used in machinery the belting does not become a part of the machinery or its accessory. The belting material consists of cotton fabric as defined in item 19 of the Central Excises and Salt Act, 1944. It cannot be equated with belts of different kinds used in different machines. Hence it is neither a part nor an accessory of a machine. It is correctly classified under entry 4 of the Third Schedule. The High Court was, therefore, right in dismissing the revision petition under Section 38 of the Tamil Nadu General Sales Tax Act, 1959.
4. The appeal is, therefore, dismissed with costs.