TMI Blog1991 (9) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act, 1961. 4. In response to the notice it was contended by the assessee before the CIT that their activity of refining of waste lubricating oil amounted to manufacture of a new marketable product, which was different than mere processing. Explaining, it was submitted that the waste raw material was called "black oil", which had lost its quality of serving as an affecting lubricant. It had absorbed in it certain impurities. This raw material by the process of dehydration, treatment with acids, distillation and filtration was converted into an efficient lubricant again. It required the use of plant and machinery like kettle, meter, acid tank, compressor, pressure pumps, furnace, boiler and cooking tank etc. 5. The plea of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative for the assessee in the first instance invited our attention to the details of the work done by the assessee in making the lubricant oil usable once again. The first of these is a process chart, available at page 6 of the paper book which gives the details of the various stages, before the waste oil becomes efficient and workable oil i.e., in a finished form. These stages are as under:---- Feed Stock Settling and Decantation Dehydration Acid Treatment and Neutralisation Clay Treatment Filtration Additive Blending Finished Oil 7. Page 7 gives the list of various machineries such as, kettle, Furnace, Chimney etc., required in the entire processing. Page 8 describes the manner in which the process takes place with ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a "process", which did not amount either to manufacturing or production of an article. In this connection reference was invited to a decision of the Allahabad High Court in Singh Engg. Works (P.) Ltd. v. CIT [1978] CTR (All.) p. 201, 204 wherein their Lordships, drawing a distinction between manufacture and processing held as under:------ " The broad distinction between 'manufacture' and 'processing' is that manufacture involves bringing into existence of a new product: a product which is of a different chemical composition or whose integral structure is different from the raw materials. Processing, on the other hand, is doing specific acts to the raw material in order to change its shape or size, etc." (p. 204) 10. In the case of Koshy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil is in a very different situation as it requires extensive processing to make it a normal usable oil. In the case in hand even as per the assessee's own version they were mainly taking out the impurities absorbed in the waste oil to render it as an efficient oil once again. As far as the process of dehydration and use of acids is concerned it is a part of that process but it cannot be said that it amounted to manufacturing a new identifiable goods known in the market coming into being, as held by the Supreme Court in the case of Jayant Oil Mills (P.) Ltd. 13. As held by the Allahabad High Court in the case of Kamal Biscuit Factory manufacture is the result of one or more processing but processing does not include manufacture always an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have a clear decision of the Supreme Court in the case of Jayant Oil Mills (P.) Ltd. wherein their Lordships have clearly held that all processes need not to manufacture and it must be such a process which transforms old articles into goods and change the identity, use and purpose of use of the goods undergone by the process. It was further held that by the process which can be considered to be manufacture a new identifiable goods in the sense known in the market as such must come into being. In our considered opinion, the assessee's case does not answer these specific requirements of law. Last but not the least, even on facts the ratio of Kalsi Tyres (P.) Ltd.'s case does not come to assessee's rescue. Retreading of tyres would be requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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