TMI Blog2009 (12) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... MI - 5818 - SUPREME Court), the Apex Court has clearly held that conversion of concrete by stone crushers could legitimately be considered to be a manufacturing process. The observation of the Supreme Court cannot be termed to be 'obiter dicta' since the Supreme Court has held that the process of concrete by stone crushers is a manufacturing process. - 6,7 of 2007 - - - Dated:- 16-12-2009 - Mr. Justice Deepak Gupta, Mr.Justice V.K.Ahuja, JJ. For the appellant: Mr.Vishal Mohan, Advocate For the respondent: M/s.Vinay and Vandana Kuthiala Deepak Gupta, J. Both these appeals are being disposed of by this common judgment since they have been admitted on the following identical question of law:- "Whether the operation of mini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The basic question which arises is whether the process of converting boulders into stone concrete (grit) is a manufacturing activity within the meaning of Section 80IA and 80IB of the Income Tax Act, 1961. In Black's Law Dictionary (5 th Edition), the word "manufacture" has been defined as, "the process or operation of making goods or any material produced by hand, by machinery or by other agency; by the hand, by machinery, or by art. The production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, whether by hand labour or machine". In M/s.Sterling Foods v. State of Karnataka and another, 1986 (3) SCC 469, the question for determination before the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re necessary for making them fit for the table. Equally it makes no difference in character or identity when shrimps, prawns and lobsters are frozen for the purpose of preservation and transfer to other places including far-off countries in the world. There can therefore be no doubt that processed or frozen shrimps, prawns and lobsters are not a new and distinct commodity but they retain the same character and identity as the original shrimps, prawns and lobsters." This judgment was followed by the Apex Court in Commissioner of Income Tax v. Relish Foods, 1999(237), 59 wherein the same definition was applied to the provisions of the Income Tax Act . The question whether stone crushing activity is a manufacturing process was considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the resultant product of 'bajri' or 'gitti' would be one and the same as the block of stones/big boulders unearthened or excavated from earth/mines. When bigger stones and boulders are cut and shaped into specified shapes and sizes in crushers or manufactured into ballast, metal or 'gitti' or 'bajri', in our view, there certainly takes place the required transformation in stone boulders and in substance a different commercial article fit for construction of roads, houses, bridges and dams are produced." A Division Bench of the Madras High Court in Commissioner of Income Tax v. Sacs Eagles Chicory, 2000 (241) ITR 319 dealt with the issue as to what is 'manufacture'. In the case before the Madras High Court, chicory roots were bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring Co., 2001 (249) ITR 307 , the question before the Apex Court was whether the process of cutting, polishing raw diamond amounts to manufacture and produces new articles or things. The Apex Court held as follows:- "The question that the High Court and we are here concerned with is whether, in cutting and polishing diamonds, the assessee manufactures or produces articles or things. There can be little difficulty in holding that the raw and uncut diamond is subjected to a process of cutting and polishing which yields the polished diamond, but that is not to say that the polished diamond is a new article or thing which is the result of manufacture or production. There is no material on the record upon which such a conclusion can be reach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was doing only the processing work and was not involved in the manufacture and producing of a new article cannot be accepted. The process is a manufacturing process when it brings out a complete transformation in the original article so as to produce a commercially different article or commodity. That process itself may consist of several processes. The different processes are integrally connected which result in the production of a commercially different article. If a commercially different article or commodity results after processing then it would be a manufacturing activity. The assessee after processing the raw berries converts them into coffee beans which is commercially different commodity. Conversion of the raw berry in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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