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2015 (4) TMI 60 - HC - Income TaxEntitlement to deduction u/s 80IC - process of cutting of stainless steel pipes of larger size with electric cutter and including painting and welding of pipes - whether manufacturing of "Route Markers" falls within the definition of "manufacture", entitling him to the deductions, under Section 80IC? - Tribunal allowed the claim - Held that:- The question as to what amounts to manufacture, is no more res integra. It is a settled principle of law that the word "manufacture" is generally understood to mean bringing into existence a new substance and not some change in the substance. (Union of India v. Delhi Cloth and General Mills Co. Ltd., [1962 (10) TMI 1 - SUPREME COURT OF INDIA]). It is also a settled principle of law that "manufacture" implies a change, though every change may not be a manufacture, even though article is a result of treatment, labour and manipulation. (Deputy Commissioner of Sales Tax v. Pio Food Packers, [1980 (5) TMI 30 - SUPREME COURT OF INDIA]). In Collector of Central Excise v. Technoweld Industries, [2003 (3) TMI 123 - SUPREME COURT OF INDIA] as relied by revenue the Court was dealing with a case where the assessee was engaged in the business of drawing wires into thinner gauge from wires of thicker gauge, by cold drawing process. The old product did not lose its identity or could be put to similar and same use. In our considered view, no ratio of law is laid down by the Apex Court in the said decision, unlike the ones we have noticed hereinabove. In the instant case, as we have already observed, by applying the settled principles, the activity carried out by the assessee can only be said to be manufacturing a new product. Thus no hesitation in holding that the Appellate Tribunal was justified in concluding that the product (Route Marker) produced by the assessee was commercially different from its raw material and further, it is commercially known to be different in the market. In other words, the assessee was engaged in manufacturing of the said product. Therefore, the assessee was entitled to deduction claimed under Section 80IC of the Income Tax Act. We find no reason to disagree with the said opinion of the Tribunal. - Decided in favour of assessee.
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