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2014 (12) TMI 16 - HC - Income TaxDeduction u/s 80IA - job work of decoration of glazed ceramic tiles amounts to manufacture or not - Whether the Appellate Authorities were correct in holding that the job work activity carried on by the assessee of screen printing, embossing on ceramic tiles as per the requirements of the customers would amount to a manufacturing activity entitling it to relief u/s 80-IA of the Act, when the assessee did not carry on actual manufacturing activities of providing infrastructure as contemplated in the Section – Held that:- In India Cine Agencies v. CIT [2008 (11) TMI 15 - SUPREME COURT] it has been held that the test to determine whether a particular activity amounts to ‘manufacture’ or not is does a new and different good emerge having distinctive name, use and character - 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 be it the result of one process or several processes `manufacture' takes place and liability to duty is attracted - 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 the market - both the Appellate Authorities were justified in holding that the job work undertaken by the assessee constitutes manufacture and they are entitled to the benefit of Section 80-IA – Decided against revenue.
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