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TMI Blog2009 (10) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order allowed the appeal and declared the turnover of hard coke as non-taxable. The Tribunal held that the coal and hard coke are not a different commodity but are the same commodity and since it is made out of the tax-paid coal the hard coke is not further liable to tax. Heard Sri B.K. Pandey, learned standing counsel for the applicant and Sri Piyush Agrawal, learned counsel appearing on behalf of the opposite party. Sri B.K. Pandey, learned standing counsel, submitted that the assessing authority found that the hard coke was manufactured after the processing of coal breeze. He submitted that as against 12058 tons of coal, 8938 ton hard coke was manufactured. The difference has been shown as burning loss. He submitted that the Tribunal in its order has also observed that in the manufacturing of hard coke from coal a manufacturing process is involved in which its nature changes but there is no difference in fundamental nature, therefore, it has been admitted by the Tribunal also that in the manufacturing of hard coke from coal a manufacturing process is involved and the nature of the commodity changes. Therefore, treating both the items as one and the same is wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commodity that is material for the purpose of determining whether the operation constitutes processing. In the case of Chowgule & Co. [1981] 47 STC 124; 1981 UPTC 702 the apex court has held as follows (at page 131 of STC): "7. The Revenue however relied on the decision of the Bombay High Court in Nilgiri Ceylon Tea Supplying Co. v. State of Bombay [1959] 10 STC 500. The assessees in this case were registered dealers in tea under the Bombay Sales Tax Act, 1953, and they purchased in bulk diverse brands of tea and without the application of any mechanical or chemical process, blended these brands of different qualities according to a certain formula evolved by them and sold the tea mixture in the market. The question arose before the sales tax authorities whether the different brands of tea purchased and blended by the assessees for the purpose of producing the tea mixture could be said to have been 'processed' after the purchase within the meaning of the proviso to section 8(a), so as to preclude the assessees from being entitled to deduct from their turnover under section 8(a) the value of the tea purchased by them. The High Court of Bombay held that the different bran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver be the means employed for the purpose of carrying out the operation, it is the effect of the operation on the commodity that is material for the purpose of determining whether the operation constitutes 'processing'. We are clearly of the view that the blending of ore in the course of loading through the mechanical ore handling plant amounted to 'processing' of ore within the meaning of section 8(3)(b) and rule 13 and the mechanical ore handling plant fell within the description of 'machinery, plant, equipment' used in the processing of ore for sale. It must therefore follow as a necessary corollary that if any items of goods were purchased by the assessee as being intended for use as 'machinery, plant, equipment, tools, spare parts, stores, accessories, fuel or lubricants' for the mechanical ore handling plant, they would be eligible for inclusion in the certificate of registration of the assessee." A perusal of the decision of the apex court in the case of Chowgule Co. [1981] 47 STC 124; 1981 UPTC 702 it is apparent that the three judges' Bench has not approved the decision of the Bombay High Court and has held that ". . . Now undoubtedly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat manufacture is not confined to a new marketable commodity but also includes old articles made saleable. The court held as under (at page 210 of STC): "Decisions construing the meaning of the word 'manufacture' as used in other statutes do not apply unless the definition of that word in the particular statute under consideration is similar to that construed in the decisions. The plain construction of the special definition of the word in a particular Act must prevail. In the special definition given in section 2(j) of the said Act 'manufacture' has been defined as including a process or manner of producing, collecting, extracting, preparing or making any goods. There can be no doubt whatsoever that 'collecting' goods does not result in the production of a new article. There is, therefore, inherent evidence in the definition itself that the narrow meaning of the word 'manufacture' was not intended to be applied in the said Act. Again the definition speaks of 'the process of lopping the branches (of trees), cutting the trunks'. The lopping of branches and the cutting of trunks of trees also, selfevidently, does not produce a new article. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mething is brought into existence which is different from that originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case of processing it is not necessary to produce a commercially different article. Processing essentially effectuates a change in the form, contour, physical appearance or chemical combination or otherwise by artificial or natural means and in its more complicated form involves progressive action in performing, producing or making something. (Vide Corn Products Refining Co. v. Federal Trade Commission [1944] C.C.A. 7; 144 F 2d 211)." In Union of India v. Delhi Cloth and General Mills Co. Ltd. AIR 1963 SC 791, the apex court explained the word "manufacture" used as a verb which is generally understood to mean bringing into existence of a new substance and does not mean merely to bring some change in a substance, however, minor in consequence the change may be. In a manufacture, there must be transformation and a different article must emerge having a distinctive name, character or use. A similar view has been reiterated in Rajasthan State Electricity Board v. Associated Stone Industries [2000] 6 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, we do not agree that the coal briquettes are the same commercial commodity as coal. In our opinion, coal is a raw material for making coal briquettes. The method of manufacturing coal briquettes has been stated above, and this certainly 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 five 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 characteristics. The coal briquettes are altogether in different shape, form and moistu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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