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2006 (6) TMI 157 - AT - Income TaxDeduction u/s 80-IA - industrial undertaking - the activities of sawing of marble blocks into sizeable blocks and tiles before selling them into market - considered a 'manufacturing' or 'production' activity? - difference of opinion between the learned Members - Third member Order - Whether the cutting of marble blocks into marble slabs amounts to manufacture for the purpose of the Central Excise Act? J.M. - HELD THAT:- We have no hesitation in holding that the production process employed by the assessee involves manufacturing activity. Accordingly, it is entitled to deduction u/s 80-IA of the Act as per law. We are also satisfied that the word 'produced' even wider in meaning and, therefore, even on that count, the assessee's claim u/s 80-IA deserves to be allowed. The AO is accordingly directed to allow the claim of the assessee u/s 80-IA of the Act in both the years under consideration. In the result, the appeals of the assessee are allowed. A.M. - HELD THAT:- The activities undertaken by the assessee for converting the marble blocks into marble slabs and tiles do not amount to 'manufacture' or 'production' in view of the judgment of the Hon'ble Rajasthan High Court in the case of CIT vs. Lucky Mineral (P) Ltd.[1996 (2) TMI 26 - RAJASTHAN HIGH COURT] and of Hon'ble Supreme Court in the case of Lucky Minmat (P) Ltd. [2000 (8) TMI 6 - SUPREME COURT]. Therefore, the assessee is not entitled to deduction u/s 80-IA. Accordingly, the order of CIT(A) does not merit any interference and all the grounds of appeal of the assessee for both the assessment years are rejected. In the result, the appeals of the assessee are dismissed. Third Member - HELD THAT:- Assessee has purchased marble blocks and the same have been cut to various sizes, part of which has been exported and part sold in India. It is also pertinent to mention that the assessee is also engaged in doing the job work of cutting the marble blocks into marble slabs on payment of job charges. The assessee also makes marble tiles by cutting the marble slabs and polishing and buffing the same. The issue to be determined is as to whether the decision of the Hon'ble Supreme Court in the case of Lucky Minmat (P) Ltd. vs. CIT [2000 (8) TMI 6 - SUPREME COURT], is applicable to the facts of the present case or the decision of Hon'ble Supreme Court in the case of CIT vs. Sesa Goa Ltd., or none is applicable. In the case of Lucky Minmat (P) Ltd., the assessee was a mine owner, the marble blocks had been cut into marble blocks and as such a distinction in the facts has got to appreciated insofar as what was excavated from the mines was sold after cutting the same into smaller blocks the product remaining the same. In the case of Sesa Goa Ltd.[2004 (11) TMI 14 - SUPREME COURT], their Lordships of the Supreme Court held that mining activity for the purpose of production of mineral ores would come within the ambit of the word 'production'. Their Lordships referred to its decision in the case of CIT vs. N.C. Budharaja & Co.[1993 (9) TMI 6 - SUPREME COURT], to hold that the word 'production' is much wider than the word 'manufacture'. Whether the sawing of marble blocks into marble slabs and tiles with or without polishing amounts to production of article or thing - The contention advanced on behalf of the assessee that the decisions to the effect that the activities carried on by the assessee do not amount to manufacture of article or thing would not come in the way of the assessee insofar as even the production of article or thing not amounting to manufacture also enables the assessee to get the deduction u/s 80-IA is also bereft of substance. In the case of CCE vs. Fine Marble & Minerals (P) Ltd. [1984 (5) TMI 256 - CEGAT NEW DELHI], has specifically pointed out that cutting of marble blocks into marble slabs does not amount to manufacture or production of article or thing. In the case of Fine Marble & Minerals (P) Ltd. is referred to in the order of the Tribunal in the case of Aman Marble Industries (P) Ltd. vs. CCE [2003 (9) TMI 81 - SUPREME COURT], and has been relied upon by the learned JM of CEGAT whose decision has ultimately been upheld by the Hon'ble Supreme Court. It is evident from the above decision of the Central Excise Tribunal that the activities carried on by the assessee do not also fall within the ambit of production of article or thing and, therefore, the assessee is not entitled to deduction under s. 80-IA. Thus, the cutting of marble blocks into marble slabs and tiles and selling the same after polishing does not amount to either production or manufacture of any article or thing. I, therefore, concur with the view expressed by the learned AM. In conformity of the opinion of the majority of the Members of the Tribunal who have heard these cases, for the reasons cited in the orders, we adjudicate the issue apropos of the point of difference against the assessee. In the result, both the appeals stand dismissed.
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