TMI Blog1989 (12) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of manufacturing and sale of wooden packing boxes, granite slabs, sinks and tombstones and grinding stones and export of granite blocks. The major component of the sales is sale of granite blocks. These are stated to be manufactured by it by employing a contractor, who is to deliver the granite blocks at the office of the assessee at Madras, and it has appointed supervisors to check the specification of the granite blocks manufactured by the contractor. In addition to checking up the product, the assessee's own staff made final adjustments of these granite blocks so that transportation of the same will be safer. Therefore, the assessee contends that it is mainly engaged in the manufacture or processing of goods. However, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employees of the assessee-company to see that the granite blocks were made as per the specifications of the assessee-company. " The Appellate Assistant Commissioner, however, accepted the assessee's claim by holding that granite blocks are not found in nature as such and they required processing which, in this case, were done by the assessee's contractors ; therefore, the assessee was an " industrial company. The Appellate Tribunal reversed this finding. The Tribunal observed: " It is not the assessee's case that the contractors who supply granite to the assessee are extracting granite from the quarry on behalf of the assessee. But it appears that the assessee's employees are allowed to size and polish the stone ready for supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchasing and exporting the granite slabs, etc., these granite blocks require processing, without which they cannot be exported or sold ; if so, the processing of granite blocks is part of the main activity of the assessee ; in other words, it was argued, that the main activity of the assessee was processing of goods, which is an integral part of the assessee's business. Several decisions were cited to show that the concept of processing is quite wide so as to include any activity necessary to make an article of trade marketable such as book-binding ( of printed sheets - decision of the Delhi High Court in Orient Longman Ltd. v. CIT [1981] 130 ITR 477); refrigeration ; powdering of raw lumps of minerals (CIT v. Kutch Oil and Allied Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such operation would amount to processing of the commodity". We are of the view that this aspect of the case actually does not arise for consideration in this case. The finding is that the granite blocks are sold to the assessee to the specifications stated by the assessee ; therefore, the processing was already done by the seller as part of the consideration for sale. The assessee has its staff to see that the requisite specifications were satisfied by its sellers. The works that may be effected by the assessee are only marginal in cases where the specifications were not fully satisfied by the vendors. It is clear that the main activity of the assessee is the sale or export of the granite blocks which had already come into existence, bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the benefit as an "industrial company". After referring to the width of the meaning of the word "processing", the Bench proceeded to hold, on facts, thus, at page 58 "Whatever 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 is 'processing' or 'manufacture'. Having thus seen the broad distinction between 'manufacture' and processing', we may now turn to the facts of the case. In the restaurant, the menu list contains different varieties of food and beverages. Some preparations offered to, customers are mixtures of a number of articles of food. It is quite common that some readymade drinks and foo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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