TMI Blog2010 (8) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... see had filed detailed note of its business activity and the same is as follows :- The assessee is manufacturing galvanized steel tapes and CR strips/coils. The manufacturing process is as under :- The Galvanizing plant for manufacturing of Galvanized steel tape is a continuous line consisting of decoilers at the beginning of the plant where the CR strips get decoiled and pass through rollers to run upto 12 parallel CR strips of various sizes. The process of pickling removes oxide scales from the surface of the strips. This is done by treating the surface with dilute hydrochloric acid, which are than pass through 2 neutralization tanks where it gets rinsed where after the trips enter the prefluxing tank where it is passed through the molten zinc in the tank at the controlled temperature depending upon the grade of the output required by Marketing. An oil fired furnace designed and developed in house is used for heating zinc as lead to desired temperatures. This CR strip is then passed through specially designed air jets to get uniformity of the coating of the zinc metal on the CR strips. These are then passed through quenching tank, where the hot galvanized strips are quench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the product. c) The cold rolled coils are slitted as per the specific dimensions given by the customers. d) The cold rolled strips so obtained are passed through dilute hydrochloric acid for Pickling which removes dust, grease, oil etc. e) The materials are dip into water for cleaning and removing acid particles. f) Subsequently, the material is passed through flux solutions which are the combination of ammonium nitrate and zinc chloride. g) Then the flux solution helps in bonding of zinc with steel. h) The raw material from the flux solution is passed through a drying unit. i) From this drying unit the raw material is passed through molten zinc at the temperature of 450 degrees centigrade to 470 degrees centigrade. j) The air knives in the zinc pot control the thickness of coating as per the specifications given by the buyer. k) From the zinc pot the raw materials are passed through water tank for cooling. Thus, a different product emerges after the galvanization and as a product they are marketed as Armour strips/tapes and armcur wire, the terminology applied in the cable industries. Further, the assessee also brought to the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial pronouncements as to when an Assessee can be said to be engaged in production of an article or thing assessee. In the case of Dy.CST Vs. Pio Food Products (1980) 46 STC 63(SC), the Hon ble Supreme Court observed that it is only when the change, or series of changes, takes the commodity to the point where commercially it can no longer be regarded as the original commodity but instead recognized as a new and distinct article that a manufacture can be said to take place. The test that is required to be applied is: Does the processing of the original commodity bring into existence a commercially different and distinct article. It was held as follows:- Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 846. The Supreme Court also adverted to the decision in Kores India Ltd. v. Commissioner of Central Excise [2005] 1 SCC 385 in a Central excise case and the decision in CIT v. Sesa Goa Ltd. [2004] 271 ITR 331 (SC) in an income-tax case, where manufacture was required from the processes of extraction of iron ore for export. The Supreme Court, further pointed out that the word production or manufacture would relate to movables and not for construction of immovable property. It made a distinction between production and manufacture referring to the precedents, that production by itself may or may not amount to manufacture, while manufacture will be production. This difference was explained in the context of juxtaposition of the words production or produce with the word manufacture , which requires the emergence of new goods by the processes. In other words, though production may involve any process to render the product marketable like packing, labelling, repacking etc., manufacture should result in a product. The language of the sections refers sometimes to processing, sometimes to production and other times to manufacture or both production and manufacture. The expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n top heated at 470 degree Centigrade) Coiler Rewinding Packing Finished products manufactured by Silvassa Wooden Drums : 1) cold rolled coils 2) Galvanized steel tapes/strips : 14. The Input and output material, and physical properties of the input and output material are as follows :- PARTICULARS INPUT MATERIAL OUTPUT MATERIAL H.R. Coils CRCA Coils/GS Tape Nature Hot rolled Cold rolled and cold annealed/Galvanizing Thickness 1.8 mm to 2.8 mm 0.20 mm to 1.2 mm Width 200 mm to 430 mm 20 mm to 425 mm Coil Weight 6 MT to 7 MT 0.050 MT to 2 MT Tensile strength Not applicable 25-30 Kg/m2 Elongation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Polycab cables Telephone cable armoring 2 Finolex cables Telephone cable armoring 3 Sterlite industries Telephone cable armoring 4 Tirupati plastomatic Railway cables 17. The product, Galvanized steel tape has a specific use for armoring Jelly filled Polythene telephone cables. It is used by Bharat Sanchar Nigam Ltd., a Government of India Undertaking, RDSO, Defence Department, Government of India and Indian Railways. 18. The above discussion clearly shows that the Assessee was not carrying out merely a process. The raw material and end product were different having different commercial name and different commercial use. Galvanising is one of the intermediary process and not the only process. The conclusion of the CIT that the Assessee was merely carrying out galvanizing process in our view is without any basis. In our view, learned CIT(A) has taken a very narrow view and had concluded that the assessee was merely carrying on a process. We have already seen tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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