Case Law Details
RELEVANT PARAGRAPH
6. We have considered the rival contentions and gone through the records carefully. Honourable Supreme Court in the case of India Cine Agencies (supra) has considered various judgements of Honourable High Court as well of Honourable Supreme Court, while. construing the meaning of expression, manufacture and production. Honourable Court has also considered the judgement in the case of N.C. Budhjraja & Co. (supra) has been relied upon by the Assessing Officer. The Honourable Court has considered the dictionary meaning of expression “manufacture” as well as how this term has been construed and expounded by the courts in various judgements. The authoritative observations of the Honourable Court are worth to note for understanding the meaning of word “manufacture” :
“2., As noted above, the core issue is whether the activity undertaken was manufacture or production.
3. In Black’s Law Dictionary (5th edition), the word , “the “manufacture” has been defined as, “the-process or operation of 1 makings goods or any material produced by hand, by machinery or by other agency; by the hand, by machinery, or by art. The production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, whether by hand labour or I machine”. Thus, by a process of manufacture something is I produced and brought into existence which is different from that, out of which it is made in the sense that the thing produced from that, out of which it is made in the sense that the thing | produced is by itself a commercial commodity capable of being sold or supplied. The material from which the thing or product is manufactured may necessarily lose its identity or may become transformed into the basic or essential properties £see JI “Dy. Commissioner of Sales-tax (Law), Board of Revenue (Taxes) Coco Fibres (1992) Supp (1) SCC 290:)
4. Manufacture implies a change but every change is not manufacture, yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is 1 the end result of one or more process through which the original commodities are made to pass. The nature and extent of processing may vary from one case to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. Whenever a commodity undergoes a . change as a result of some operation performed o it or ^regard . to it, such operation would amount the processing of the commodity. But it is only when the change or a series of changes takes the commodity to the point-where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected that the manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. Collector of Central Excise. Vs Rajasthan State Chemical Works 1991 4 SCC 473.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
