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TMI Blog1983 (12) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... in connection with these two allowances as raised by the revenue are, whether a manufacture is involved in the activity of the assessee and whether the assessee could be considered to be manufacturing any commodity when it does not deal in this operation with goods belonging to it, but deals with goods belonging to others. The assessee has a centrifugal machinery, which is intended for the purpose of preparing preserved concentrated natural rubber latex. The natural rubber latex that is passed through the centrifugal machinery does not belong to the assessee but belongs to the planters. The preserved latex is prepared out of the natural latex that is brought to the assessee by the rubber planters and the assessee puts it through the centri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent to 60 per cent as required by the specifications of the Indian Standard Institution. No manufacture is involved in this process. Particular reliance is placed on the decision of the Calcutta High Court in CIT v. Hindustan Metal Refining Works (P.) Ltd. [1981] 128 ITR 472. It is also submitted that the ratio of the decision of the Delhi High Court in Addl. CIT v. Kalsi Tyre (P.) Ltd. [1981] 131 ITR 636 relied upon by the assessee before the Commissioner (Appeals) does not, in fact, support the stand of the assessee. Reference has also been made to the decision in CIT v. Tata Locomotive Engg. Co. Ltd. [1968] 68 ITR 325 (Bom.) to the observations at p. 334, in Kalsi Tyre (P.) Ltd.'s case and CIT v. Casino (P.) Ltd. [1973] 91 ITR 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that the term ' manufacture ' essentially means the transformation of the product into a different commercial commodity, that the finished product should be an entity by itself and that it is not necessary that the raw material in that process should lose its identity. It is contended that the latex concentrate or the preserved latex is different from the natural latex because this preserved latex does not deteriorate as does natural latex. It also contains a substantially higher percentage of rubber as against natural latex. The finished product, namely the preserved latex, has an identity of its own which is different from the natural latex and, therefore, the assessee must be considered to have manufactured the preserved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Tata Locomotive Engg. Co. Ltd. It has been held that manufacture would imply transforming of an article into a commercial commodity or a finished product which has an entity by itself. It has also been held that though the finished product will have an identity by itself, it is not necessary that in the process to which it is subjected, the raw material should lose its identity. 7. On the various instances considered in these decisions, cited by both sides, particular mention may be made of three cases. The first is that in Woodland Estates Ltd.'s case. In that case also the raw material was natural latex. In that case, the latex was converted into smoked rubber sheets or crepe rubber sheets. It was held in that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of utilisation in various manners. It is the second process that was the subject-matter in the case of Woodland Estates Ltd. Almost the entire water content from the naturally obtained latex is removed and rubber is obtained in a solidified form and converted into sheets. In the former process, whereby preserved rubber latex is obtained, the water content is removed only to a lesser extent. The rubber content in the liquid increases from 15 per cent to 20 per cent in the natural latex to 60 per cent in the preserved latex. The process of centrifuging, thus, removes water but not completely. The preserved latex is specifically required for certain forms of manufacture. Apart from subjecting it to the action of centrifuge, certain chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in such a process. We are of the opinion that the process undertaken in the centrifuge belonging to the assessee is only similar without even such material change as takes place when an iron sheet is galvanized. The decision of the Supreme Court in Chowgule Co. (P.) Ltd.'s case also supports the view we have taken here. In that case the process of blending different grades of iron ore was claimed to be manufacture. It was field that there was no manufacture. 11. The Commissioner (Appeals) has relied upon a decision of the Delhi High Court in the case of Kalsi Tyre (P.) Ltd. to consider the process employed in the centrifuge belonging to the assessee as manufacture. As pointed out by the departmental representative, the Delhi H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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