TMI Blog2014 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... - blocks converted into polished slabs and tiles after undergoing the process indicated above certainly results in emergence of a new and distinct commodity - The original block does not remain the marble block, it becomes a slab or tile - not only there is manufacture but also an activity which is something beyond manufacture and which brings a new product into existence. The whole industry set up by the assessee is for processing plain glazed ceramic tiles - The process includes application of chemical and other materials like glazes, colours, mediums, glass, luster, etc. and burning at a very high degree of controlled temperature with the help of the kiln which is also imported from Italy by adopting the single fast fired technology, which is the latest development in the ceramic industry - Before that, designing and preparation of a photomechanical film, preparation of screens, colour-recipe-formulation, automatic screen-printing and spray application, three dimensional glass-embossing and single fast-firing is undertaken and the object of this process of printing results in decorating or painting the said glazed tiles which constitutes a distinct and different article in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is in the nature of manufacturing activity and accordingly, entitled to deduction under Section 80-IA of the Act. Accordingly, the appeal came to be dismissed. Aggrieved by the said order the Revenue is in appeal. 5. The learned counsel for Revenue assailing the impugned order contended, as it is clear from the audit report in Form 3CD, enclosed to return of income at point No.28(b) as against the column manufacturing or otherwise, it is mentioned that 'not applicable' since the assessee company is only engaged in job work. Therefore, it is not open to the assessee to contend that the job work which they have undertaken is the manufacturing activity. He further submitted that after the process undertaken by the assessee on the glazed tiles, it does not change the character of the original product. No new product emerges after the process by the assessee and therefore, having regard to the definition of manufacture, in the Act, the manufacturing activity which is a condition precedent for claiming benefit, is not there and the appellate authorities were not justified in extending the said provision. 6. Per contra, the learned counsel appearing for the assessee poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 kgs), which is a major fuel for its production unit. The assessee had also obtained pollution clearances from Air Pollution and Water Pollution Control Boards on 9.7.1993. Thereafter, the assessee has registered with the Central Excise Department on 27.7.1998. The Central Government with an intention to provide relief to the manufacturing units involved in the printing of glazed ceramic tiles on job work basis, have exempted them from payment of excise duty through necessary amendment and introduction of chapter heading and sub-heading No.6906.10 to the Central Excise Tariff, which came into effect from. April, 1999. The said entry reads as under: 6906.10 - Glazed tiles manufactured by a manufacturer exclusively engaged in the process of printing, decorating or ornamenting of the said glazed tiles on job work basis, by whom or on whose behalf no glazed tiles are sold . Rate of duty - NIL . 10. The material on record also discloses, the process undertaken by the assessee on the plain ceramic glazed tiles for decoration reads thus: that the said process involves input of raw material (the ceramic-glazed/unglazed tiles), application of chemical and other materials (li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omething else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view, is a question depending upon the facts and circumstances of the case. (See Empire Industries Ltd. v. Union of India (1985 (3) SCC 314). 13. The Supreme Court in the case of INCOME TAX OFFICER vs. ARIHANT TILES MARBLES (P) LTD. reported in (2010) 320 ITR 79 again referring to several judgments, followed the judgment of the Apex Court in CIT vs. N.C. BUDHARAJA CO. ANR. reported in (1993) 204 ITR 412 and held thus 'In the case of Commissioner of Income Tax v. N.C. Budharaja Co., reported in 204 ITR 412 (SC), the question which arose for determination before this Court was whether construction of a dam to store water (reservoir) can be characterised as amounting to manufacturing or producing an article. It was held that the word manufacture and the word production have received extensive judicial attention both under the Income Tax as well as under the Central Excise and the Sales Tax laws. The test for determining whether manufacture can be said to have taken place is whether the commodity, which is subjected to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld as under: 'The assessee had filed an annexure before the Tribunal showing the processing involved in the production of the end-product. The same has been referred to by the Tribunal in para. 11 of the order, but the same was not elaborately referred to. A copy of the same has been produced before us as well. According to the assessee, it receives plain glassware in the form of tumblers and bottles for soft drinks and others. They are cleaned with water and are decorated on screen printing machines which are automatic as well as semi-automatic. In the case of sem-automatic machines, the cleaned articles are placed on the machine by workers, while in the case of automatic machines, the articles are automatically transferred to the machines. The machines are fitted with stainless steel wire mesh cloth on which the designs are photographically exposed as per the requirements. The printing materials used for design are different coloured vitrifiable enamels. This material is placed in the screen and the temperature of 50 degrees centigrade is maintained by the transformer. The articles are placed under the screen and the printing material seeps through the screen on the artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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. `Manufacture is a transformation of an article, which is commercially different from the one, which is conferred. The essence of manufacture is the change of one object to another for the purpose of making it marketable. The essential point thus is that in manufacture something is brought into existence, which is different from that which originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case of processing it is not necessary to produce a commercially different article. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether it be the result of one process or several processes manufacture takes place and liability to duty is attracted. Etymologically the word `manufacture' properly construed would doubtless cover the transformation. The word 'production' has a w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of making it marketable. The essential point is in manufacture, something is brought into existence which is different from that which originally existed, in the sense that the thing produced is by itself a commercially different commodity. The moment there is transformation, a new commodity commercially known as distinct and separate commodity having its own character, use and name, whether it be the result of one process or several processes manufacture takes place and duty is attracted. 17. In the instant case, it is not in dispute, the whole industry set up by the assessee is for processing plain glazed ceramic tiles. The process includes application of chemical and other materials like glazes, colours, mediums, glass, luster, etc. and burning at a very high degree of controlled temperature with the help of the kiln which is also imported from Italy by adopting the single fast fired technology, which is the latest development in the ceramic industry. Before that, designing and preparation of a photomechanical film, preparation of screens, colour-recipe-formulation, automatic screen-printing and spray application, three dimensional glass-embossing and single fast-firin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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