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TMI Blog2006 (8) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... n as "coal tikli". The assessee applied for exemption/rebate of sales tax claiming that the coal briquettes are the same commodity as coal which had already been subjected to tax. However, his claim was rejected by the assessing authority vide assessment order dated March 31, 1999. Aggrieved, he filed an appeal which was dismissed by the appellate authority vide order dated July 19, 2001. His further appeal to the Tribunal was referred to a larger Bench of five members which decided against the assessee vide its order dated March 16, 2004. The short argument submitted by Shri Rakesh Dwivedi, learned Senior Counsel for the appellant, was that coal briquettes are as same as coal and hence no liability of tax can be fastened on the sale of coal briquettes. Learned counsel for the appellant submitted that Notification No. ST-II- 5782 dated September 7, 1981, issued under section 3-A of the U.P. Trade Tax Act, 1948 provided that coal included coke in all its forms, but excluded charcoal. The same meaning was given to the word "coal" in the subsequent Notification No. ST-II-3685 dated July 31, 1986. In both the Notifications, the rate of tax was at 4 per cent. A similar meaning has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ience a change. The court further observed that whatever be the means employed for carrying out the processing operation, it is the effect of the operation on the commodity that is material for the purpose of determining whether the operation constitutes processing. In B.P. Oil Mills AIR 1998 SC 3055 1998] 111 STC 188 (SC).), the Supreme Court observed that refining crude oil amounts to a "manufacture". A Constitution Bench in Devi Dass Gopal Krishnan v. State of Punjab AIR 1967 SC 1895 [1967] 20 STC 430 (SC)., while considering the case of extracting the oil from oil-seeds, held that the edible oils produced were different from the oil seeds, and hence the edible oil produced is taxable though tax has already been paid on the oil seeds. This court referred to the dictionary meaning of the "manufacture" as "to transform or fashion raw materials into a changed form for use" and held that oil is produced out of the seeds. The process certainly transforms the raw materials into different articles for use, and therefore is taxable as a new commercial commodity. This court further explained that in a case where the scrap iron ingots undergo a vital change in the process of manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent from that out of which it is made, in the sense that the thing produced is by itself a commercial commodity capable of being sold or supplied. The material from which the thing or product is manufactured, may necessarily lose its identity or may become transformed into the basic or essential properties. The article that would emerge as a result of the process of manufacture must be a distinct and new article recognized or known as such in the commercial parlance for sale or supply. In Saraswati Sugar Mills v. Haryana State Board AIR 1992 SC 224, this court explained the distinction between manufacture and processing observing that the construction of words and the meaning to be given for such words shall normally depend on the nature, scope and purpose of the statute in which it is occurring and to the fitness of the matter to the stat- ute. This court held that if a matter is processed, the product may not lose its original character. For example, the vegetables may be processed which even after processing, retain its character as vegetable while in manufacturing, something is necessarily to be brought into existence which is different from that which originally existed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such materials new forms, qualities or combinations whether by hand labour or machines. If the change made in the article results in a new and different article then it would amount to a manufacturing activity. In the said case, the assessee after plucking or receiving the raw coffee berries made it undergo nine processes to give it the shape of coffee beans. The net product was absolutely dif- ferent and separate from the input. The change made in the article resulted in a new and different article which was recognized in the trade as a new and distinct commodity. Similar views have been reiterated in Ujagar Prints v. Union of India [1989] 3 SCC 488 [1989] 74 STC 401 (SC).. Decorative Laminates (India) Pvt. Ltd. v. Collector of Central Excise [1996] 10 SCC 46 and Gramophone Co. India Ltd. v. Collector of Customs [2000] 1 SCC 549. In Laminated Packings (P) Ltd. v. Collector of Central Excise [1990] 4 SCC 51, this court held that lamination amounts to manufacture as it is made out of the laminated kraft paper by a manufacturing process of lamination using polyethylene, etc., and, therefore, an entirely different goods comes into existence. We may mention that, as noted above, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a processing, treating or adapting the coal. The appellant manufactures coal briquettes by compiling the hard coke breeze mechanically with the help of cinders which is usually 5 per cent of the total hard coke breeze. In the compilation of the hard coke breeze, 95 per cent of the hard coke breeze, which is known as coal-dust or breeze coke is taken which is compiled with the help of clay and molasses. Hence, in our opinion, coal briquettes is a different commercial commodity from coal. Moreover, even if it is not a different commercial commodity, the process of making coal briquettes will amount to a "manufacture" as it is processing, treating or adapting coal. In our opinion, by the processing of coal to make coal briquette, the coal-dust loses its identity. Coal briquettes and coal-dust are two different commodities in substance as well as in char- acteristics. The coal briquettes are altogether in different shape, form and moisture as well as characteristics, as compared to coal-dust. A finding of fact has been given by the Tribunal that "coal-dust" and "coal briquettes" are entirely different commercial commodities and we cannot interfere with this finding of fact. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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