TMI Blog2009 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter cutting the finished slabs to proper size and shapes from which the marketable size of slabs, moulded pieces, edged pieces and tiles are made - Tribunal order that the processes are falling within the meaning of expression production or manufacture upheld – revenue appeal dismissed. - 519-2009 - - - Dated:- 11-8-2009 - A. K. SIKRI and VALMIKI J.MEHTA, JJ. Ms. Prem Lata Bansal, Advocate with Mr. Paras Chaudhry, Advocate, for the appellant. JUDGMENT A. K. SIKRI , J (ORAL) - The question that arose for consideration before the Tribunal was as to whether the process activity undertaken by the assessee would fall within the expression manufacturing process. Manufacturing process is not defined in the Income Tax Act t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the factory area where godowns for storage of uncured/clean coffee, coffee drying yards, machine rooms, garbling sheds, etc., are located." 2. In the present case, the assessee is dealing with the manufacture and sale of marble stones. It has come on record that following activities are undertaken by the assessee: "(a) Purchase of block or slabs; (b) Cutting of blocks on gang show machine of the approximate average size of 7 x 4 (ft). We don't have arrangements of cutting blocks for making slabs we get this work done through outside in our strict and direct supervision having constant check over quality control. Such slabs are brought to our factory. In case of purchase of slab itself the same comes to the factory of further ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific type of moulded marble as per different types of cuttings, shaping and edging; (k) To comply with the requirement of the customer, we have to prepare and suggest different types of designs and drawings and after the selection of our specific drawings and designs, the marble pieces are moulded; (l) Invariably, our product being very costly, the customers require edging of the marble pieces. For this with the help of specific technicians and works we edge the process with the help of specific papers alongwith small tools and thus after edging the sides of the pieces becomes extremely smooth and good looking; (m) During the state of moulding or even edging again certain scratches, holes or cracks are found in the pieces. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove that the raw form blocks are purchased and then those slabs undergo various processes before they become marketable and the final product is clearly much different from the product initially purchased by the assessee. Had it been a case of purchasing of blocks and slabs, cutting the same in that very form and thereafter selling those tiles, there could have been an arguable case as to whether this amounts to manufacturing process or not. However, in the present case the activities are not confined to cutting of the blocks or slabs after the purchase but it has to undergo various processes with the help of machines and labour and after applying various kinds of chemicals. In these circumstances, we are of the opinion that the Tribunal ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of any unit. In our opinion, therefore, the expression "production" will have the same meaning as in Sesa Goa Ltd. (supra) and consequently, the question framed is devoid of merits." 5. We may also note that Bombay High Court in the case of CIT Vs. Fateh Granite (P) Ltd. 314 ITR 32, was concerned with the identical issue, namely, manufacture of granite tiles and held the same to be a manufacturing process as is clear from the following discussion contained thereunder: "The language used in Section 10B is "manufacture or production". This language is similar to the language used in Section 80-IB. The Supreme Court in CIT Vs. Sesa Goa Ltd. MANU/SC/1123/2004 had an occasion to consider the expression "production". The Rajasthan Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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