TMI Blog2006 (11) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... ------ The judgment of the court was delivered by ARIJIT PASAYAT J. The civil appeal and the transfer petition are inter- linked and are taken together for disposal. Background facts involved are essentially as follows: A writ petition was filed by the appellant under article 226 of the Constitution of India, 1950 (in short, "the Constitution") before the Madhya Pradesh High Court. The basic stand of the appellant was that it is not exigible to pay any market fee under the M.P. Krishi Upaj Mandi Adhiniyam, 1972 (hereinafter referred to as "the Act"). Before the High Court it was projected that the appellant is a public limited company having its registered head office at Brajrajnagar (Orissa) and has a paper manufacturing plant at Amlai in the district of Shahdol in the State of Madhya Pradesh. The appellant-company uses bamboos, wood dyes, starch rosin, talcum and several chemicals as raw materials for production of paper. The manufacturing process consists of crushing bamboos and wood pieces into pulp to which chemicals are added at a subsequent stage. Elaborate description was given how the manufacturing process takes place. It was paying without any demur the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Though reference was made to a decision of this court in Krishi Upaj Mandi Samiti v. Orient Paper Industries Ltd. [1995] 1 SCC 655 by learned counsel for the respondents, the issue really has no relevance so far as the present dispute is concerned. The stand of the respondent further is that in the process of manufacture bamboo is processed to pulp which is the primary raw material for the purpose of manufacture of paper. In order to appreciate the rival submissions, it is necessary to take note of few provisions of the Act. "Processing" is defined in section 2(mmm). The same read as follows: "Section 2(mmm). 'Processing' means powdering, crushing, decorticating, husking, parboiling, polishing, ginning, pressing, curing or any other treatment to which an agricultural produce or its product is subjected to before final consumption." Section 19 deals with the power to levy market fee. The provision reads as follows: "19. Power to levy market fee. (1) Every market committee shall levy market fee (i) on the sale of notified agricultural produce whether brought from within the State or from outside the State into the market area; and (ii) on the notified agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is brought inside the market area and is not used for processing, market fee cannot be levied. The aforesaid submission of the learned counsel for the petitioner has substantial force. We are inclined to hold that if section 19(1)(ii) is read in proper perspective it becomes plain as noon day that the market fee is leviable on the notified agricultural produce if it is brought into the market area and used for processing. If the goods are brought only into the market area and are not used for processing certainly it cannot be liable to the levy of market fee. Both the aspects are to be read in a composite manner. To put it differently, it has to be given the cumulative effect of "bringing in" and "used for processing" to create the factum of liability. In absence of the produce being used for processing the liability cannot be saddled or fastened. While we are accepting the submission of Mr. Gupta we are not inclined to adjudicate the fact whether the petitioner is engaged in processing or not as in our considered view that lies in the realm of factual aspect and would be adjudicated by the competent authority. Needless to emphasize it would be open to the competent authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand labour or machine". Thus by manufacture something is produced and brought into existence which is different 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. (See Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Coco Fibres [1992] Supp. 1 SCC 290).See [1991] 80 STC 249 (SC). Manufacture implies a change but every change is not manufacture, yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is the end-result of one or more processes through which the original commodities are made to pass. The nature and extent of processing may vary from one class to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered the original commodity experiences a change. Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1989] 3 SCC 488).See [1989] 74 STC 401 (SC). To put differently, the test to determine whether a particular activity amounts to "manufacture" or not is: Does new and different goods 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. Etymologically the word "manufacture" properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view is a question depending upon the facts and circumstances of the case. (See Empire Industries Limited v. Union of India [1985] 3 SCC 314 See [1987] 64 STC 42 (SC).). These aspects were highlighted in Kores India Ltd., Chennai v. Commissioner of Central Excise, Chennai [2005] 1 SCC 385. The stand of learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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