TMI Blog1990 (6) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... , in appeal, affirmed the same. They were of the view that granite is a mineral which stands excluded vide sub-clause (b)(ii) of sec. 80HHC. 3. The Commissioner (Appeals) views that "minerals" found in sub-clause (b)(ii) should be attributed a wider meaning and when so interpreted, granite would not be goods or merchandise entitled to deduction. The learned representative of the assessee, Shri Venkatesan, on the other hand, contended that the words "mineral oil", "minerals" and "mineral ores" which are excepted from the main section should be given a strict or scientific meaning, for the Parliament could never have denied relief under this beneficial provision to a non-precious or not essential item like this which is neither a metal or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular case a substance is a mineral or not .... The test of what is a mineral is what, at the date of the instrument in question, the word meant in the vernacular of the mining world, the commercial world, and among landowners, and in case of conflict this meaning must prevail over the purely scientific meaning'." Shri Venkatesan argued that purely scientific meaning must be attributed to the word 'minerals' having regard to the fact that granite has different placement in commercial field compared to minerals like gold, silver, graphite, coal, etc. 5. Reference was also made to the decision of the Calcutta High Court in the case of Kumardhubi Fire Clay Silica Works Ltd. v. Assistant Director [1980] 123 ITR 899 and the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition and possess distinctive physical properties and molecular structure. " In his view, granite is essentially rock used as decorative stone in buildings and monuments, etc., and the same cannot be termed as mineral or ore. The Director General, Geological Survery of India, has opined : " (a) Granites are not minerals but a combination of one or more minerals and thus fall in the category of rocks; (b) The term Granitic Rock is applied for practical purpose to any light-coloured coarse-grained plutonic (meaning originated deep in the earth's crust) rock containing quartz as an essential component, along with felspar and mafic (dark-coloured) minerals. (Reference: Glossary of Geology: American Geological Institute, 3rd Print, 1974 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude even "brickearth" as explained by the Supreme Court in the case of Banarsi Dass Chadha Bros. v. Lt. Governor AIR 1978 SC 1587 and since the assessee has extracted granite upon taking lease of a land under the rules framed by the Karnataka Government under sec.5 of the aforesaid Act, there is no warrant to adopt a narrower meaning. 9. During the course of argument Circular of the CBDT in No. 178/206/83-IT(A-I) dated 22nd May, 1984 was referred to show that export of cut and polished diamonds and gems will qualify for relief under sec. 80HHC. 10. Though quarrying of granite cannot be equated with mining activity in a general sense, a granite is a minor mineral though obtained as a result of quarrying activity in view of Rule 2 of Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracted, it does not necessarily mean that a mineral is one which can only be got from an ore and in that way the meaning of the word "minerals" should be ascertained. For example, there may be metals like manganese, iron, copper, etc. Which are got by pick and showel and without any underground operation while normally such substances are worked and won by mining operation and not by quarrying. Even such substances got by open cast working are minerals. Therefore, it is not the method by which the substance is won that should decide the question. 13. The Circular of the CBDT is also not helpful for it refers to cut and polished diamond and gems. Diamond is nothing but an allotropy of carbon. Diamonds are won by mining operation. A poli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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