TMI Blog2013 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... containing gas is a marketable product which the assessee produces - When the assessee produces the gas cylinder containing gas, in our opinion, a new product comes into existence - The process of bottling of gas into gas cylinders, which requires a very specialized process and an independent plant and machinery, amount to production of ‘gas cylinders’ containing gas for the purpose of claiming deduction under Section 80IB of the Act - Decided in favour of assessee. - ITA No. 393 of 2007 - - - Dated:- 7-10-2013 - Dilip B Bhosale And B Manohar, JJ. For the Appellant : Sri Chythanya, Adv For the Respondent : Sri K Aravind, Adv JUDGEMENT:- This income tax appeal is preferred by an assessee against the order dated 31st Janu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80IB (3) of the Act? 4. We have heard the learned counsel for the parties on the aforesaid question and with their assistance gone through the order of the Tribunal and the judgments relied upon by them in support of their contentions. 5. At the outset, we would like to refer to the judgment of the Bombay High Court in Commissioner of Income Tax-I vs. M/s.Hindustan Petroleum Corporation Ltd., 2013-TIOL-253-HC-MUM-IT, wherein, almost identical question was considered and answered by the Division Bench. One of the questions that was framed by the High Court was whether on the facts and in the circumstances of the case, and in law, the Tribunal was justified in holding that bottling of gas into gas cylinders as a production activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gas Cylinder Rules 1984 which were not in force during the relevant assessment year would not in any way detract from the finding of fact arrived at by the Tribunal. In these circumstances, as the Tribunal has rendered a finding of fact and placed reliance upon the decision of this Court and also the Gujarat High Court dated 6/5/2010, we see no reason to entertain the proposed questions of law. (emphasis supplied) 6. In Pondicherry State Co-operative Consumer Federation Ltd. vs. Union of Territory of Pondicherry, [2007] 10 VST 630 (SC), the Supreme Court was considering the case of assessee that whether purchase of Palmolive oil in bulk and packing it in small packages for the purpose of selling in retail would amount to manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the facts. 7. Our attention was also invited to the order dated 28-8-2012 passed by the Supreme court in Commissioner of Income Tax vs. Vinbros Company [2012] 210 Taxman 252 (SC). The Supreme Court in that case confirmed the view taken by the Madras High Court that blending and bottling of Indian Manufactured Foreign Liquor (IMFL) would amount to manufacture for the purpose of claiming deduction under Section 80IB. 8. Our attention was also invited by Mr.Aravind, learned counsel for the revenue to the judgment of the Supreme court in Commissioner of Income Tax vs. Tara Agencies [2007] 292 ITR 444 to contend that the bottling of gas into gas cylinders would not amount to either manufacturing or production and it would amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word manufacture . While every manufacture can be characterized as production, every production need not amount to manufacture. The meaning of the expression manufacture was considered by this Court in Deputy CST V. Pio Food Packers (1980) 46 STC 63, among other decisions. In the said decision, the test evolved for determining whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity but is recognized in the trade as a new and distinct commodity. Pathak J, as he then was, stated the test in the following words (at page 65): Commonly, manufacture is the end result of one or more processes through which the original commodity I made to pass. The nature and extent of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is known in common parlance, it cannot be sold to the customers. In other words, neither loose gas nor an empty cylinders can be sold to customers and it is only gas cylinder containing gas is a marketable product which the assessee produces. When the assessee produces the gas cylinder containing gas, in our opinion, a new product comes into existence. Gas and cylinder are two independent products, which, the assessee does not produce or manufacture. The assessee, however, produces/manufactures gas cylinder and once the manufacturing process is complete, neither gas nor cylinder be regarded as original commodity and is recognized in the trade as a new and distinct commodity namely gas cylinder . The only inference, therefore, will ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
