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TMI Blog2004 (3) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... ic features. Details of the system established at Mangalore is enumerated in the project report filed at annexure-A. The State Government issued a notification dtd. 15-6-1996 r/w notification dated 15-6-1996 as per annexures B and C. The notifications envisages grant of exemption/deferment of sales tax on the sale of goods manufactured by a new industrial unit set up after 1-4-1996 within the State of Karnataka. Petitioner in the light of the notifications submitted an application. The Joint Director forwarded the said application to the Director of Industries and Commerce with his recommendations in terms annexure-E. Petitioner in the light of the recommendations of the Joint Commissioner sought for an opportunity to represent its case to the office of the Director. An application was filed on 16-1-1999. An opportunity was sought in terms of annexure-F. Thereafter respondents rejected the request of the petitioner in terms of annexure-G. Aggrieved by annexure-G, petitioner filed writ petitions in WP Nos. 32658 & 34399 to 34407/99. This court after hearing, disposed of the writ petition in terms of annexure-H. Thereafter petitioner received a notice and in response to the notice, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly perused the material on record. The only issue to be adjudicated is as to whether any manufacture in tems of the notification is be carried on by the petitioner at Mangalore in the given circumstances. To consider this crucial issue, facts are required to be noticed. 7. Material facts would reveal that the petitioner has set up a manufacturing unit at Kovaya in Amreli District of Gujarat. The normal mode of transport for these markets would be by a combination of road and rail. This however according to the petitioner, is uneconomical for long distances and is also uncertain, because of poor road conditions and congestion as well as inadequate supply of wagons. Since a captive jetty is available with the petitioner, it is proposed to transport the raw cement produced at the Kovaya Plant to various units along with western coast from where the markets in the hinterland could be served. In those circumstances, based on a survey, petitioner identified Mangalore as a place for its site. Annexure-A is the project report. Project parameters have been provided in clause 3.3 of the project report. Homogenisation process has been referred to in Clause 4.9 to 4.12. The clauses read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be granted for a period of five years. Petitioner also addressed a letter dtd. 16-1-99 to the Director of Industries and Commerce explaining their activity in this State. On receipt of the same an endorsement was issued in terms of annexure-G rejecting the request of the petitioner. Writ Petitions were filed in this court against the said endorsement. This court directed the respondents to reconsider the matter. In the light of the order of this court petitioner made one more representation as per annexure-J. Thereafter respondents rejected the case of the petitioner in the light of the decision of the State Level Committee. The State Level Committee in its proceedings at page No. 126 has ruled that the Mangalore Plant which undertakes only the activity of physical change exclusively i.e., packing of cement, does not amount to manufacture, since the manufacture should result in production of a new/different commercial commodity. Let me see as to whether the decision is correct in law in the given set of facts. 7.1 Manufacture has not been defined in the notification. Concession is available only in the event of 'manufacture'. A certificate is necessary for availing the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentity." 7.4 In M. Salgaocar Bros. (P) Ltd. v. CIT., [1996 (41) KLJ 79] a Division Bench of this court has considered the term 'new industrial undertaking' and also the term 'manufacturing process'. The Court ruled as under : "The term 'produce' is wider in its amplitude than the term 'manufacture', for while the latter can be used only in regard to inanimate objects and articles, the former can be used even in regard to animate things and objects. The Court further ruled that all 'manufacturing' or production activities involve some process or the other but all processes need not necessarily amount to production or manufacturing of an article. It is only when a change or series of changes take the commodity subjected to such processes to a point where it can no longer be regarded as the original commodity but is instead recognised as a new and a distinct article, that such a process may be said to have resulted in a 'manufacture' or 'production'. 7.5 In Brookebond Lipton India Ltd. v. State of Karnataka, (1998) 109 STC 265 this Court has ruled as under : "(iv) that the industrial unit of petitioner produced blended tea packages by the operation of modern automa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... = 1993 (67) E.L.T. 34 (S.C.), 1996 (41) KLJ 79, 74 STC 403 = 1988 (38) E.L.T. 535 (S.C.). He contends that based on these judgments a new commodity has to come into existence for consideration of 'manufacture'. He says that all these judgments would negative the petitioner's arguments. 9. From these judgments what is clear to this court is that the manufacture is the end result of one or more processes through which the original commodity is made to pass. The commodity has to undergo a change and the end product must result in a new and distinct articles. It is only then the manufacture takes place. This has been reiterated by the Supreme Court in 46 STC 63 = 1980 (6) E.L.T. 343 (S.C.), 74 STC 403 = 1988 (38) E.L.T. 535 (S.C.), 47 STC 124 = 1993 (67) E.L.T. 34 (S.C.). 10. In the case on hand, admitted facts would reveal that even after homogenisation no new product appears as argued by the petitioner. The end product at Mangalore is only a Homogenised cement and not a new article as stated by the Apex Court. In fact this court in the case of V.M. Salgaocar Brothers (P) Ltd., v. CIT, 1996 (41) Kar. L.J. 79 after noticing the various judgments categorically ruled as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticle so as to qualify for the benefit claimed by the assessee." 11. This judgment is a complete answer to 'process' 'manufacture' arguments and to the argument of 'saleable commodity' as pointed out by the learned Government Advocate. The Homogenisation may be at best be a process but not a process which results in production or manufacture. Therefore the respondents are right in their submission that there is no manufacture at Mangalore. The finding of the committee of 'no manufacture' is based on facts and is supported by the decisions of both the Apex Court and this court. I do not find any factual or legal errors warranting by interference. 12. Sri Sarangan, learned Senior Counsel argued at great length to say that without Homogenisation there is no quality cement available and that therefore the said process is to be included as a manufacturing process. I am afraid that this argument is not available to the petitioner. The Division Bench in Slagaocr's case has ruled that the test is not whether what is produced as a result of the process carried out in the plant becomes more saleable from an otherwise less saleable articles. The test is whether the article produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate as such is available to the petitioner on the facts of this case. The terms of the averment in para 7. These mattes are essentially for the authorities to consider/decide and courts should not go into that argument unless a very strong case is made out by the petitioner dislodging a factual finding of authorities. In the case on hand looking from any angle, no such case is made out by the petitioner. In these circumstances, notwithstanding serious arguments advanced by Sri Sarangan, learned senior counsel, I am unable to accept his plea with regard to manufacturing in the light of Homogenisation process. This conclusion is inevitable. 16. I must notice at this stage annexure-R 1 and in annexure-R-1 it is stated that what is transferred from Gujarat-Mangalore is only on stock transfer basis. This also evidences that there is no manufacturing as such at Mangalore. Petitioner in the amended petition only challenges annexure-Q. Petitioner has suffered assessment orders and appeals have been filed by the petitioner. Appeals stood rejected. The main ground raised both before the assessing authority is one of eligibility in terms of the notification. Since I have accepted in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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