JUDGMENT P. Puttaraju—These 24 (twenty-four) appeals are filed under Section 63 of the Karnataka Value Added Tax Act, 2003 (for short, "the Act") challenging the appeal order passed by the Joint Commissioner of Commercial Taxes (Appeals 4), Bangalore (hereinafter referred to as 'First Appellate Authority' or for short, 'FAA') in Case Nos. VAT/AP 247 to 270 of 2011-12, dated 26th May, 2012 by which the FAA has upheld the reassessment orders dated 19th January, 2012 of the Assistant Commissioner of Commercial Taxes (Audit-42), DVO-4, Bangalore (for brevity, 'AA'). Apart from the same, the AA has also levied penalty and interest also which are also upheld by the FAA. Aggrieved by the same, these appeals have been preferred. The relevant facts of the case and grounds of appeals in brief are stated thus: (i) The appellant is a private limited company registered under KVAT Act and Central Sales Tax Act, 1956 bearing TIN-29280701556 and borne on the records of LVO-025, Bangalore. (ii) The appellant is engaged in the business of manufacture and sale of Expandable Polystyrene (EPS) cushion moulding, EPS sheets, EPS beds and Wooden pallets used for packing purpose. (iii) The appellant has discharged tax at the rate of 4% on all these goods as packing materials falling under Entries 51 and 63 of the Third Schedule of the Act. The AA has initiated reassessment proceedings and has levied higher rate of tax at 12.5% instead of 4%. Further, the AA has also levied penalty and interest. Aggrieved by the AA order, the appellant has approached the FAA who by his impugned order dated 26th May, 2012 has allowed the appeals in part confining the rate of tax at 4% on EPS boxes, crates and cases for conveyance or packing of goods and deciding that the other goods namely EPS beads, EPS sheets and wooden pallets are liable for tax at higher rate at 12.5%. By deciding so, the FAA has directed the AA to issue revised demand notice and also to examine to levy penalty under Section 72(2) of the Act as per the observations made by him. Further, FAA has also directed the AA to re-compute the interest also. (iv) The only contention raised before us is with respect to the classification of "wooden pallets" as unscheduled goods and liable for tax at higher rate at 12.5% as held by the FAA. Further, FAA has also directed the AA to re-compute the interest also. (iv) The only contention raised before us is with respect to the classification of "wooden pallets" as unscheduled goods and liable for tax at higher rate at 12.5% as held by the FAA. But, the appellant contends that the same are goods falling under Entry 51 of Third Schedule to the Act as industrial input and packing materials as notified under the statute and liable for tax at 4%. (v) Appellant submits that wooden pallets fall under Sl. No. 187 of Notification No. FD 197 CSL 2005(6), dated 30th April, 2005. According to the appellant, the wooden pallets in question are classifiable under Sl. No. 187(3) with Central Excise Tariff Heading 4415.10.10 which enumerates - packing cases, boxes, crates, drums and similar packings of wood; cable-drums of wood. As per the appellant, wooden pallets which is made from wood and used for packing purpose falls under Sl. No. 187(3) with the Tariff Heading cited supra. The appellant heavily relies on the expression "similar packing of wood" and contends that the goods in question certainly falls under the said Entry 51 read with Sl. No. 187(3) of the notification and liable for tax at 4% only. In view of the same, the appellant also questions the levy of interest and penalty. In this regard, appellant relies on the Hon'ble Supreme Court decision in case of AIR 1971 SC 2405 , wherein it has been held that the turnover discovers from the assessee's own records does not warrant levy of penalty. 2. On the above grounds, the prayer is made to set aside the order of the FAA and to issue directions to levy tax on wooden pallets at 4%. 3. Heard both the learned Counsel and SR. Perused the lower Court records. 4. The only point which arises for our consideration is: 1. Point No. 1: Whether wooden pallets are liable for tax at 4% as industrial inputs falling under Entry 51 of the Third Schedule of the Act read with Notification No. FD 197 CSL 2005(6), dated 30-4-2005 and classifiable under Sl. No. 187(3) of the said notification? 2. Point No. 2: What order? 5. Our answer to the above points are as under: Point No. 1: In the negative. Point No. 2: As per the final order for the following: REASONS 6. No. 187(3) of the said notification? 2. Point No. 2: What order? 5. Our answer to the above points are as under: Point No. 1: In the negative. Point No. 2: As per the final order for the following: REASONS 6. Point No. 1.--It is to be noted that Entry 51 of Third Schedule of the Act reads as "Industrial inputs and packing materials as may be notified". Thus, the Legislature has delegated the power to issue notification classifying industrial inputs and packing materials liable for tax at 4%. Accordingly, the Government has issued Notification No. FD 197 CSL 2005(6), Bangalore, dated 30-4-2005. The said notification has listed out the industrial inputs and packing materials as per HSN CODE which is used as nomenclature under the Central Excise Tariff Act, 1985 for classification of goods under several chapters and headings and sub-headings. Even though many goods appear under the Central Excise Tariff Act, it is only the selected goods which are notified by the Government are to be considered as industrial inputs and packing materials for the purposes of the KVAT Act, 2003. Even if a particular commodity say a chemical is an industrial input but does not find place under the Notification No. FD 197 CSL 2005(6), dated 30-4-2005 then the same is liable for tax at higher rate. Hence, it is pertinent to note that if and only if wooden pallets finds place under the said notification with the Central Excise Tariff Heading and Sub-heading, then only can be treated as packing material falling under Entry 51 of Third Schedule of the Act and liable for tax at 4%. Hence, it is pertinent to note that if and only if wooden pallets finds place under the said notification with the Central Excise Tariff Heading and Sub-heading, then only can be treated as packing material falling under Entry 51 of Third Schedule of the Act and liable for tax at 4%. The relevant portion of the notification to adjudicate these appeals is reproduced hereunder: NOTIFICATION No. FD 197 CSL 2005(6), Bangalore, dated 30-4-2005 In exercise of the powers conferred by clause (a) of sub-section (1) of Section 4 read with Serial Number 51 of the Third Schedule of the Karnataka Value Added Tax Act, 2003 (Karnataka Act 32 of 2004) and in supersession of Notification No. FD 55 CSL 2005(8), dated 23rd March, 2005, the Government of Karnataka hereby specifies with effect from the First day of May, 2005, the goods specified in column (3) of the table below with heading and sub-heading numbers under the Central Excise Tariff Act, 1985 (Central Act 5 of 1986) specified in column (2), as industrial inputs and packing materials, namely.-- The wooden pallets along with box pallets and other load boards; pallets collars are classified under tariff item with heading and subheading 4415.20.00. This particular tariff heading namely 4415.20.00 under which wooden pallets are classified does not find any place in the above enumerated notification issued under the Act. The notification issued by the State Government is Legislation by incorporation and there is no scope to widen the meanings and entries enumerated therein. Further, it is established law that the notifications are to be strictly interpreted. When such being the case, the contention of the appellant is not acceptable as wooden pallets does not find place in the aforesaid notification to enjoy lower rate of tax at 4%. Hence, it is decided that the wooden pallets are liable for tax at higher rate i.e., at 12.5% during the impugned tax periods. Hence, Point No. 1 is answered in the negative. Point No. 2.--As the above issue is answered in favour of revenue, there is no need to interfere with the impugned order of the FAA. Hence, we proceed to pass the following: ORDER (1) All the twenty-four appeals are dismissed. (2) The impugned orders of the FAA are upheld. Hence, Point No. 1 is answered in the negative. Point No. 2.--As the above issue is answered in favour of revenue, there is no need to interfere with the impugned order of the FAA. Hence, we proceed to pass the following: ORDER (1) All the twenty-four appeals are dismissed. (2) The impugned orders of the FAA are upheld. (3) The Registrar of the Tribunal is directed to comply Regulation 53(b) of Chapter IX of the Karnataka Appellate Tribunal Regulations, 1979 by communicating this order to the persons mentioned therein. (4) The office is directed to send back the lower Court records immediately.