TMI Blog2014 (12) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing - the activity was not restricted to the one of multiplying the yarns that were already produced by someone else - the respondent has been manufacturing yarn, from cops, and then, multiplying the yarns, depending upon the customer demand there is no ground to interfere in the order of the Tribunal Decided against revenue. - ITTA No. 266 of 2003 - - - Dated:- 5-11-2014 - L. Narsamiha Reddy Challa Kodanda Ram,JJ. For the Petitioner : Sri S. R. Ashok For the Respondent : Sri B. S. Shivaji JUDGMENT (Per the Honble Sri Justice L.Narasimha Reddy) The respondent is an Industrial Undertaking, established in an area notified as Backward, under the Income Tax Act, 1961 (for short the Act). It undertakes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y denied the deductions. He has placed reliance upon the judgments of the Supreme Court in Collector of Central Excise, Jaipur v. Banswara Syntex Limited (1996) 11 SCC 55 and M/s. J.K.Cotton Spinning and Weaving Mills Limited v. Union of India 1987 (Supp) SCC 350. Sri B.S.Shivaji, learned counsel for the respondent, on the other hand, submits that the process undertaken by his client is a compendious one, involving the manufacture of yarn from cops and that there was no basis for the Assessing Officer to deny the deductions. He contends that any industrial undertaking not only manufacturing, but also producing articles, is entitled for deduction under Section 80HH of the Act, and the appellant is making an effort to place a restricted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn strength count, inch, and end use, thereby bring in a totally different and a new product. The respondent was claiming the benefit of deduction under Section 80HH of the Act, year after year. For the assessment years, 1989-90 and 1990-91, the Assessing Officer allowed deductions. However, for the assessment year 1992-1993, the deduction was denied, on the ground that no process of manufacturing is involved. The Commissioner of appeals reversed the finding of the Assessing Officer and granted the relief. The same was upheld by the Tribunal. Basically, the concept of manufacture is specific to the regime under the Central Excise Act. Any product notified under the relevant provisions is leviable excise duty. It is not uncommon that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes take 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. Where there is no essential difference in identity between the original commodity and the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gle yarn into 2 or 3 stands, cannot be treated as an independent activity of manufacture. It is difficult to derive any support from that judgment, while dealing with a case pertaining to deduction under Section 80HH of the Act. Even otherwise, the activity of the respondent was not restricted to the one of multiplying the yarns that were already produced by someone else. It has already been mentioned that the respondent has been manufacturing yarn, from cops, and then, multiplying the yarns, depending upon the customer demand. Similarly, in M/s. J.K.Cotton Spinning and Weaving Mills Limiteds case (supra), the subject-matter was leviability of the excise duty on a product under the Central Excise Act. Their Lordships held that if a manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
