K. SHIVASHANKAR BHAT, J. ( 1 ) THE dealer under the provisions of the Karnataka Sales Tax Act, 1957 ("the Act", for short) is the appellant before us in all these cases. The question is whether an article called "formaldehyde" used in the manufacture of plywood is a component part of plywood. ( 2 ) THE appellant purchased formaldehyde at a concessional rate of tax on the strength of declaration in form No. 37 issued under section 5 (3-A) of the Act. After the completion of the assessments wherein the benefit of the concessional rate of tax was extended to the appellant, the assessing authority opined that the appellant had misused the declaration and, therefore, proceedings were initiated under section 5 (3-B) of the Act. According to the assessing authority the article in question was not a component part of plywood. The notices under section 5 (3-B) were issued by the Assistant Commissioner of Commercial Taxes (Appeal ). The appellant responded by pointing out that formaldehyde was necessary in the manufacture of the plywood and that it was an identifiable constituent in plywood, by chemical test. The appellant also filed affidavits of experts in this regard. However, the authority did not accept the explanation of the appellant. He held that formaldehyde and phenol do not go into the manufacture of plywood as separate commodities but are compounded into a resin,. e. , phenol-formaldehyde and the resin as a new commodity is the one that goes into the manufacture of plywood as an adhesive. According to this authority formaldehyde would be a component of a component in the finished goods of plywood. In the appeal filed by the appellant before the Additional Deputy commissioner it was held that : "from the above facts and the affidavits filed by the competent technical people in the field it is clearly established that formaldehyde used in the manufacture of plywood is an identifiable component which is capable of identification by chemical test. " ( 3 ) THIS order was revised by the Commissioner under section 22-A of the Act. The commissioner held that formaldehyde is used for preparing an adhesive compound which in turn is used in the manufacture of plywood. Hence these appeals. ( 4 ) MR. " ( 3 ) THIS order was revised by the Commissioner under section 22-A of the Act. The commissioner held that formaldehyde is used for preparing an adhesive compound which in turn is used in the manufacture of plywood. Hence these appeals. ( 4 ) MR. Ramabhadran, learned counsel for the appellant in all these appeals, contended that the commissioner failed to take note of the materials placed by the appellant such as the affidavits of two experts and the test applied by the Supreme Court to find out as to whether an article is a component part. ( 5 ) UNDER the Madras General Sales Tax Act there was a similar provision and the question arose as to whether groundnut oil in the manufacture of vanaspathi was a component part of vanaspathi in [1965] 16 STC 671 (Mad.) (R. M. Krishnaswamy Naidu and Sons v. State of Madras); though groundnut oil undergoes transformation resulting in the product called vanaspathi, it was held that groundnut oil was identifiable by a chemical process in vanaspathi and, therefore, it was a component part of vanaspath. This was the view taken earlier also by a learned single Judge of the said court in Mettur Chemical and Industrial Corporation v. Commercial Tax Officer [1964] 15 STC 734. The question also came up before the Supreme Court in the appeal filed by the state of Madras against the decision in Krishnaswamy Naidu's case [1965] 16 STC 671 (Mad.) and the decision of the Madras High Court was affirmed in State of Madras v. R. M. Krishnaswamy Naidu [1970] 26 STC 42. At page 44, the Supreme Court observed thus : "it was, however, urged on behalf of the State that an article is a component part within the meaning of the Explanation to section 3 (3) of the Act only if it is capable of being identified visually in the final product. We are unable to accept that contention. The Legislature has not provided that before a component part may qualify for the concessional rate of tax, it must be capable of visual identification in the finished product. We are unable to accept that contention. The Legislature has not provided that before a component part may qualify for the concessional rate of tax, it must be capable of visual identification in the finished product. " ( 6 ) AGAIN at page 45, the Supreme Court said that if the component is capable of identification by a chemical or other test as a component of a finished product it would be an identifiable constituent and the sale of the component would qualify for the concessional rate of tax. ( 7 ) IN the instant case, those who are familiar with the process of manufacture of plywood and who are scientifically qualified regarding the subject-matter, have filed their affidavits explaining as to how the article in question will be a component part of plywood. A similar affidavit was filed before us by Mr. Purushothama Krishnarao Godbole, an employee of the appellant for over 20 years. He states that formaldehyde which is a chemical used in the manufacture of plywood, is one of its major components. He has in his affidavit stated that : "formaldehyde, which is being purchased by the appellant-company from M/s. Western India chemicals, Hungarcutta, is in a liquid form containing 37 per cent. formaldehyde (gas dissolved in water ). Thus, in the formaldehyde solution purchased by the company, 37 per cent. is formaldehyde content and 63 per cent. is water. This solution is mixed with phenol and also a catalyst and the resultant item is only an aqueous solution, which is syrupy in nature. This syrupy solution has limited shelf or pot-life and is not a durable substance. ( 8 ) THEREAFTER he explains as to how the syrupy solution is spread by the spreaders and how the layers of coated veneers are brought together and laid between two aluminium sheets and subjected to specified temperatures and states that in this process a resin is formed by a chemical change during the manufacture of plywood. The affidavit brings out the fact that the mixture of formaldehyde with the water and thereafter with phenol results in a syrupy solution which has a limited life. In other words the said solution will have to be used immediately in the manufacture of plywood. The affidavit brings out the fact that the mixture of formaldehyde with the water and thereafter with phenol results in a syrupy solution which has a limited life. In other words the said solution will have to be used immediately in the manufacture of plywood. The said syrupy solution is not a durable substance and, therefore, it cannot have an identity of its own for long and in these circumstances formaldehyde by itself cannot be ignored as a remote ingredient in the process of manufacturing the plywood. ( 9 ) THE fact that it is an identifiable component by applying the test accepted by the Supreme court in the aforesaid case was clearly brought out by the appellant's counsel in his reply to the notice issued by the Commissioner (annexure G ). The appellant had furnished an affidavit of Dr. Purushotham a highly qualified and experienced person, who was aged 71 years at that time, this affidavit is dated December 2, 1982, he was a retired Director of Biological Research, Forest research Institute, etc. He stated that formaldehyde is an essential component of the plywood and it was possible to identify the presence of formaldehyde in between any two layers of veneers or wood particles bound by urea/phenol formaldehyde resin, used as binder, by the persons trained and working in the field. The affidavit of Purushotham Krishnarao Godbole was also filed by the appellant while responding to the notice issued under section 5 (3-B ). He is the same person who filed an affidavit before us. Inter alia he stated thus : "identification of chemicals used in manufacture of plywood can be done by any of the following methods : (1) Process developed by D. C. Roy, (Miss) Sarbani Chowdary and (Miss) Sunanda Chaudhari published in Volume 3, Nos. 2 and 3, Indian Plywood Industries Research Institute Journal 1973, pages 88 to 95. (2) Process developed by D. C. Roy and Sarbani Chowdary, Volume 5 No. 2 July -December 1975 pages 64 to 66. (3) By process developed,. e. , technique of infrared spectophotometry and micro chemicals analysis by J. J. Dibus and F. J. Shelton, Reichold Chemicals Inc. Tacoma, Wash, in paper presented at session 14, Glues and Gluing of the 20th Annual meeting of the Forest Products research Society on July 21, 1966, in Minneapolis Minn. (3) By process developed,. e. , technique of infrared spectophotometry and micro chemicals analysis by J. J. Dibus and F. J. Shelton, Reichold Chemicals Inc. Tacoma, Wash, in paper presented at session 14, Glues and Gluing of the 20th Annual meeting of the Forest Products research Society on July 21, 1966, in Minneapolis Minn. " ( 10 ) ADDITIONAL Deputy Commissioner of Commercial Taxes (Appeals) accepted the fact that this article was an identifiable component and was capable of identification by chemical test and the said authority relied upon the aforesaid decision of the Supreme Court. ( 11 ) THE Revenue has not placed any material justifying its contention that formaldehyde is not an identifiable component part of plywood. The Revenue has only tried to draw its own inference by applying its concept of the term "component part". ( 12 ) ACCORDING to the Revenue there is a difference between the terms "component" and "a component part". The term "component part" is suggestive of a meaning that it should be visually capable of identification in the final product. The test propounded by Mr. Dattu, learned government Advocate, actually, is a test applicable to some of the goods such as motor cars and other solid goods having different visually identifiable parts in it. But the test suggested by the learned counsel cannot be exhaustive because necessarily the test applicable will vary with the nature of the ultimate product. A product which is the result of a chemical process cannot be equated for this purpose with a product which is the result of engineering works. It is unnecessary for us to dwell on this process of reasoning further in view of the clear enunciation of the principle by the Supreme Court in the aforesaid decision referred by us already. If the component is capable of identification by a chemical test as a component of finished product, it should be taken as an identifiable constituent; in other words it will be an identifiable component part. In fact the subsequent amendments made in the relevant provisions in the Tamil Nadu general Sales Tax Act, 1959 and Kerala General Sales Tax Act actually highlight the principle stated by the Supreme Court, by adding certain explanation to the relevant provisions subsequently. In fact the subsequent amendments made in the relevant provisions in the Tamil Nadu general Sales Tax Act, 1959 and Kerala General Sales Tax Act actually highlight the principle stated by the Supreme Court, by adding certain explanation to the relevant provisions subsequently. In those two legislations, it was stated that component part means an article which forms an identifiable constituent of the finished product which along with others go to make up the finished product and which is identifiable visually or by a mechanical process and not by a chemical process. Obviously these amendments were made to get over the principle stated by the supreme Court. The decision of this Court in Kishindas Agencies v. State of Mysore [1974] 33 stc 65 at page 67 is entirely based on the language of the then entry No. 72 of the Second schedule to the Act read with section 5 as it then stood. To exhaust the citation made before us we have to refer to another decision of this Court reported in Khoday Distilleries (P.) Ltd. v. Commissioner of Commercial Taxes [1991] 82 STC 251. It was held therein that a component part need not be visibly identifiable in an end-product and that molasses used in the manufacture of an ethyl alcohol was a component part of the finished product since it was identifiable by chemical analysis. The view taken by the Commissioner in the instant case in the result of not only his failure to rely on the material placed by the appellant but also is the result of a wrong test and consequently the order of the revisional authority is liable to be set aside. It is accordingly set aside. ( 13 ) IN the result these appeals are allowed. No costs. ( 14 ) APPEALS allowed.