TMI Blog2018 (2) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... itself recognizes the distinction between “manufacture”, “production” and “processing”. A manufacture or production necessarily has to lead to a different commodity while a processing may not result in a new commodity being brought out. We, hence, decline to entertain the contention as raised by the learned Counsel. The process of garbling to make pepper edible does not give rise to a different commodity distinct from the raw pepper purchased. - Decided against assessee - I.T.A.Nos.13 of 2009 And 499 of 2009 - - - Dated:- 25-1-2018 - MR. K. VINOD CHANDRAN AND MR. ASHOK MENON, JJ. For The APPELLANT : Sri.E.K.Nandakumar [Senior Advocate], Sri.Anil D. Nair And Sri. P. Benny Thomas For The RESPONDENT : Sri.P.K.R.Menon And Sri.Jose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was engaged in the procurement and export of pepper. The assessee procured un-garbled pepper, which by a process got garbled; making it fit for human consumption and was exported. The assessee had been claiming allowance under Section 80HHC for its export turnover as computed under sub-section (3); when it also had sale in the domestic market. In the relevant assessment year the assessee turned out to be a hundred per cent export-oriented unit, which is one of the conditions for claiming the benefit under Section 10B. 4. The assessee's claim for allowance under Section 10B was rejected, on two counts. One that the process involving conversion into garbled pepper was not a manufacture or production and it was only a processing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial commodities under the Kerala General Sales Tax Act, 1963 [for brevity KGST Act ]. The Court categorically held that ' whatever it be, as a matter of fact, ungarbled pepper and garbled pepper cannot be two different commercial commodities '. In the context of a precedent on identical facts, we are inclined to answer the questions of law framed against the assessee and in favour of the Revenue. 10. The learned Counsel appearing for the assessee argued that the decision in Sheth Brothers was in the context of the KGST Act which may not have application under the IT Act. We are unable to countenance such a contention, especially since the finding that un-garbled and garbled pepper are not two distinct commodities was not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article is the result of treatment, labour and manipulation. But something more is necessary ...... There must be transformation; a new and different article must emerge, 'having a distinctive name, character or use'. And further: At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been 'manufactured'. The process of garbling to make pepper edible does not give rise to a different commodity distinct from the raw pepper purchased. 12. However, before leaving the matter, we have to notice that if the decision was otherwise, then there would have been a remand necessitated for con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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