TMI Blog1995 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture or production of any article or thing. The CIT (Appeals) also held the same view in appeal. The assessee is on further appeal to the Tribunal. 3. The learned representative of the assessee Shri Lakshminarayanan placed his arguments which, in pith and substance, were to say that curing raw coffee results in manufacture or production of coffee seeds or beans, which should be sufficient for the purpose of section 32A(2)(b)(iii). His main reliance was on the decision of this Bench in the case of Bharati Coffee Curing Works v. First ITO [1979] 2 Taxman 482 (Bang.) which, no doubt, supports him. 4. For the revenue the argument was that coffee was the produce of the plantation and it is unnatural to say that a curer has manufactured o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a distinct and new article that has emerged as a result of the processes. The principles are clear. But difficulties arise in their application in individual cases. There might be borderline cases where either conclusion with equal justification may be reached. Insistence on any sharp or intrinsic distinction between 'processing' and 'manufacture', we are afraid, results in an over-simplification of both and tends to blur their interdependence in cases such as the present one. " 7. A passage in Permanent Edition of Words and Phrases, Vol. 26, from an American Judgment commended itself for approval of the Supreme Court in Union of India v. Delhi Cloth General Mills Co. Ltd. AIR 1963 SC 791 and it reads : " 'Manufacture' implies a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a curer even with modern equipment does is found stated in Aspin Wall's case and there is, and, indeed, there cannot be, no dispute about it. By winnowing, the foreign materials (such as stone, etc.), if any, are got rid off. Raw coffee is fed into machines which will peel off the outer skin, or the silver skin, as the case may be, and the resultant is coffee seeds classified as cherry coffee (beans) or plantation (beans). 12. Coffee beans (whether cherry or plantation) got as a result of hulling is an admixture of many grades. Basically, coffee is dicotyledan. But there will be a small percentage of full beans. The full bean is peaberry (PB), top in kind and value. The rest, called Flats, is A, B, triage, blacks/bits, which are order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as a result of treatment, is not manufacture. There may be several processes carried out by the manufacturer. Not all of them may be directly involved in manufacture or production. By removing foreign matter if raw coffee is cleaned by mechanical device, no new commodity comes into existence. The produce continues to have the same essential identity and appearance. 18. After the coffee beans are got, grading operation is done. This also does not result in bringing about a different commodity. By removing the husk the manufacturing was complete. The husked coffee retains the same identity even after grading. 19. By the mechanised operation conducted for cleaning or grading there is no manufacture or production. The conclusion of ours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has claimed the special allowance. 24. A statement of the additions was furnished by Shri Lakshminarayanan to us. The details are : " Plant and Machinery Rs. Rs. Motors and starters installed to operate 16 Nos. elevators used in the Coffee Curing Works 61,566 Electric installation in the Coffee Curing Works :- Factory and Office 1,83,158 Manager's bungalow and staff quarters 38,597 2,21,755 -------- -------- Total 2,83,321 Investment Allowance claimed at 25% 70,830 " ..... X X X X Extracts X X X X X X X X Extracts X X X X
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