TMI Blog1993 (7) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in the status of registered firm under the provision of the Act. The business of the assessee, inter alia, was raising of coal in Badjna Colliery and Marulidih Colliery belonging to Eastern Coalfields Ltd. At the said collieries open cast mining of coal was undertaken. The assessee employed new machinery like Bulldozers, Compressors, Drills, Dumpers, Scrappers, Shovels and other heavy earthmoving machinery for the said mining job. The agent of the said collieries also gave a certificate to the effect that the assessee was engaged in the mining job. The work of the assessee consisted, inter alia, of cutting earth, drilling and blasting stones, removing the overheads, removing the coal and transporting such coal and dumping it at the coal yard. The entire work was undertaken by the assessee itself with its own machinery and workmen. The assessee was paid for the various jobs at the rates stipulated in the contract. All the machinery for the job was operated by the assessee. None of the said machinery was made over by the assessee to the collieries. The assessee employed its own staff and labourers for working the said machinery and raising the coal. 2. The assesee claimed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoving earth, stones and coal within a short distance. It was also the revenue's contention that winning coal could not be any process of manufacturing or producing thing. The coal was already there in the earth and bringing out on the surface makes no difference. It was further contended that the assessee's activity was in the nature of transporting coal from one place to another. Even if raising coal could be treated as a processing, that would not amount to production or manufacture of an article or thing. 8. Mr. R.N. Bajoria, the learned counsel for the assessee, referred to the decision of a Division Bench of this Court in Aluminium Corpn. of India Ltd. v. Coal Board AIR 1959 Cal. 222 approved by the Supreme Court in Empire Industries Ltd. v. Union of India [1986] 162 ITR 846 where it has been held that raising of coal even if it did not amount to manufacture was certainly production of an article. Of course, the decision in Aluminium Corpn. of India Ltd. 's case (supra) was in a different context but the principle bears on the present issue. There the question was whether duty of excise could be imposed under the Coalmines (Conservation and Safety) Act, 1952 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. All the above items are minerals. It is, thus, absolutely clear that the Act treats the raising of coal or other minerals as manufacture or production of an article or thing. Exactly the same language, as in section 33(1)(b)(B)( i) has been used in section 32A(2)(b)(iii) which falls for consideration herein namely :- ... for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule. It is not in dispute that coal is not specified in the Eleventh Schedule to the Act. 10. Under the Central Excises and Salt Act, 1944 duty of excise is levied on all excisable goods other than sale which are produced or manufactured in India . Coal and also other minerals are excisable goods, (See item No. 11 of Schedule to the 1944 Act for coal: Heading No. 27 of Chapter 27 of Central Excise Tariff Act, 1985 for coal). In the various other enactments some of which are listed herein below cess is imposed on the production of minerals and in all such Acts the charge is on the basis that such minerals are produced : (1) Iron ore Mines, Manganese ore Mines and Chrome ore Min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ells for tapping underground water. It was held that investment allowance was allowable. This case is the direct authority supporting the assessee's claim for investment allowance. It was held : ... The revenue contends that the assessee cannot be regarded as an industrial undertaking for the purpose of business of construction, manufacture or production of any article or thing. It is pointed out that all that the assessee did is to drill and drilling operations do not result in the manufacture or production of any article or thing. It is, therefore, claimed that the assessee is not entitled to the deduction on account of investment allowance under section 32A. The Tribunal allowed the assessee's claim. We are in agreement with the Tribunal's conclusion. There can be no dispute about the fact that the drilling equipment is used by the assessee for the purpose of business carried on by it in order to bring to the surface underground water. It should be borne in mind that water deposits lie hidden under the ground and the purpose of operating the equipment to go into the ground is to produce water lying hidden under the ground. It would be wrong to think that drilling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had carried on its business of turning out automobile ancillaries and supplying them by manufacturing such automobile ancillaries with the aid of the machinery owned by it, though with the raw materials of another, the assessee would be entitled to the benefit of higher development rebate. We may also observe that the emphasis should be laid on the user of the machinery owned by the assessee for the purpose of its business resulting in the manufacture of one of the items falling under the Fifth Schedule to the Act and not the ownership either in the raw materials or in the end products (p. 5) 14. Even in a case where the commercial asset is exploited by letting out the same, even then investment allowance cannot be denied. Reliance in this behalf has been placed on the decisions of this Court in CIT v . Steel Rolling Mills of Hindustan (P.) Ltd. [1987] 164 ITR 6334 and CIT v. Hindusthan Aluminium Corpn. Ltd. [1989] 176 ITR 206 5. InSteel Rolling Mills of Hindusthan (P.) Lad's case (supra) it was held that the assessee was entitled to development rebate on L.P. Gas cylinders since it was carrying on the business of hiring out gas cylinders. In Hindusthan Aluminium ..... X X X X Extracts X X X X X X X X Extracts X X X X
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