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TMI Blog1994 (4) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... s brokers bring live buffaloes/goats at the factory premises and after visual examination live animals are chosen for purchase. The animals are then killed, de-skinned and carcasses are brought for inspection and acceptance at area No. 1 where they are inspected by qualified veterinarians for organoleptical aspects as well as visual defects. Uncleaned pieces are immediately trimmed and washed. Non-confirming pieces are rejected and destroyed. 2. The accepted conforming carcasses are stored overnight in chilled rooms at 4 degrees centigrade for processing prior to the deboning operation. The chilled storage at controlled temperature also helps in reducing microbial count of the muscles and lower the PH factor. 3. The subsequent morning the chilled carcasses are removed to the deboning, the trimming section, where highly skilled and experienced butchers debone the carcasses in hygienic conditions following international mat cutting practices under the supervision of qualified food technologists. The carcasses after deboning and trimming is sent to inspection and prepacking section. 4. The resultant material obtained from deboning and trimming section is physically inspected for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith poly prophele strappings and thereafter the entire package are shrink wrapped to ensure that the product temperature does not fluctuate when exposed to non-refrigerator environment and also to guarantee factory seal of the product. 11. The shrink wrapped frozen meat boxes are conveyed to deep freeze cold storage chambers where the temperature is constantly maintained below minus 18 degrees centrigrade for total duration until the shipment to the overseas market is due. 12. The manufacture of frozen meat for export is very specialised and regulated activity. It is a discipline which is perfected due to adherence and enforcement of the norms. The correct use of temperature and the efficient operations of the various machines coupled with the training and experience of the workmen results in the manufacture of quality packed frozen meat product suitable for human consumption which can be stored/exported from live animals. Not only has the finished product got to confirm to the standards laid down by various Government of India departments and their relevant regulations but it is also subjected to the specific requirement of the importing nations veterinary and health departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing decisions wherein the assessee was held to have carried no manufacturing activity as original identity of the commodity was not lost although it underwent some degree of change on account of the process carried:-- " 1. CST v. Harbilas Rai Sons [1968] 21 STC 17 (SC), when bristles plucked from pigs, boiled, washed with soap and other chemicals and sorted out in bundles according to the their size and colour were regarded as remaining the same commercial commodity, Pigs bristles. 2. Dy. CST v. Pio Food Packers [1980] 46 STC 63 (SC) where pineapple fruit processed into pine apple slices for the purposes of being sold in sealed cans, it was held that although a degree of processing was involved in preparing pineapple slices from the original fruit, the commodity continued to possess its original identity, notwithstanding the removal of inedible portions, etc. slicing and thereafter canning it on adding sugar to preserve it. 3. CST v. Alsban Enterprises [1980] 45 STC 283 (All.) After purchasing mutton tallow from butcher, the assessee removing the dust, bone pieces, etc., thereafter and selling the same. 4. Processing has in one sense a wider meaning than the term manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the context in which the term has been used in the same. It is a cardinal principal in the construction of enactments that, unless the context otherwise requires, the meaning of an expression contained in the Act should prevail throughout the Act as held in 174 ITR 682 (A.P.). The appellant has also referred to the following observations of the Supreme Court in the case of Suresh Chand v. Ghulam Chisti, AIR 1990 SC 897: "ordinarily the rule of construction is that the same expression when it appears more than once in the same statute, more so in the same provision, must receive the same meaning unless the context suggests otherwise." 28. The Assessing Officer is of the view that the definition of the word "manufacture" appearing in section 10A and section 10B includes processing and since the inclusive definition that the manufacturing includes processing of goods for the purpose of section 80HHC has been brought in the statute w.e.f. 1-4-1991 by Finance Act, 1990, therefore, the appellant can claim it in the subsequent year, i.e., assessment year 1991-92 and not in the year under consideration. The counsel of the appellant has argued that the amendment has been made in the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough this consolidated order. 8. Smt. Sinha, learned Sr. D.R., vehemently challenged the order of CIT (Appeals) for the assessment year 1989-90. She relied upon the orders of the Assessing Officer and of CIT (Appeals) for the assessment year 1990-91. Each of the findings recorded by the learned CIT (Appeals) in her order for the assessment year 1989-90 was contested. According to Smt. Sinha, there was lot of distinction between the provisions of section 80HHC on one hand and those of sections 10A and 10B of the Act on the other. These provisions were incorporated to serve different purposes and their context was also different. She drew and highlighted the following distinctions:-- (1) That purpose of section 10A was to encourage development of specific location like Santacruz, Kandla etc. by describing these areas as "Free Trade Zones". (2) That for purposes of sections 10A and 10B an Industrial Undertaking either manufacturing or producing article or thing was covered, whereas provisions of section 80HHC only covered a manufacturer. (3) The word "manufacture" was defined by inserting a definition clause in Explanation to section 10A through Finance Act, 1987 with retrosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept for removal of waste meat. Further with reference to balance-sheet and depreciation chart, she submitted that assessee mainly owned cold storage plant and generators. Generators cannot be treated as plant utilised for manufacturing activity. Thus details of assets held by the assessee further showed that no other process except freezing of meat was carried by the assessee. Smt. Sinha further submitted that buffaloes shown in the purchase bills were only meat of buffalo carcasses, which was clear from weight and other details given in the bills. Thus raw material and the end-product remained neat without any transformation. Smt, Sinha accordingly submitted that assessee was not entitled to any relief Smt. Sinha also relied upon the decisions in the case of Delhi Cold Storage (P.) Ltd. v. CIT [1991] 191 ITR 656 (SC) and in the case of Koshy's (P.) Ltd. v. CIT [1985] 154 ITR 53 (Kar.). 10. Shri C.S. Aggarwal, learned counsel for the assessee supported the impugned order of CIT (Appeals) for the assessment year 1989-90. He highlighted by filing a chart at page 65, different processes carried on by the assessee. He maintains that assessee had acquired live buffaloes, carried proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision was retrospective in operation. Shri Aggarwal accordingly submitted that assessee was entitled to benefit of provisions. 11. We have given careful thought to the rival submissions of the parties. There is no dispute that export house in this case issued necessary certificate referred to in clause (b) of sub-section (4A) of the Act and all other conditions of the section (except of being manufacturer) are admittedly satisfied by the assessee in both the years. The assessee claims to be a supporting manufacturer, whereas the revenue treats it to be a processor, as basic components of the goods supplied for export remained unaltered on account of process applied by the assessee. The assessee acquired meat and supplied meat for export, which, according to the revenue, was the same commercial article. However, having regard to the facts brought on record by the assessee we are of the view that the assessee is entitled to benefit under section 80HHC of the Income-tax Act, 1961. 12. It is no doubt true that in the books the assessee has shown purchases of carcasses of buffaloes and goats but from this, it does not follow that the assessee, purchased meat, the same commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding grades of Beef Carcasses, it is provided as under :-- "2.1................................................... (a) Conformation...The most desired conformation is the one which will yield the greatest quantity of edible meat. Superior conformation implies short necks and shanks, deep plump rounds, thick backs with full loins and well-fleshed ribs and smooth shoulders. This is in contrast to ranginess and angularity. In other words, the most desirable cuts, including the loin, rib, round or leg, and chuck and shoulder have shapely and full muscles and a large proportion of edible meat to bone." 14.1 The above desired conformation could be obtained at the stage of selection and not later. The revenue did not controvert that the assessee selected live animals. Even otherwise, there is ample material on record to hold that process carried on by the assessee started with selection of animals. The animal no doubt is not purchased as assessee is not interested in the skin of the live animals. The selected animal is then carried to the Slaughter House where slaughter is carried for the assessee under the licence held by it. After the slaughter, de-skinning is not carried on by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved, in its manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article, that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed articles, it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity." 16. It is thus clear that manufacture is end result of one or more processes. Merely because one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e.f.1-4-1988was held to be applicable w.e.f.1-4-1984. The provision was also held to be declaratory in character. The S.L.P. filed against the decision in the case of Jamshedpur Motor Accessories Stores has already been dismissed by the Hon'ble Supreme Court. In the later case of Sri Jagannath Steel Corpn., the Calcutta High Court made the following observations: "When the section as a whole is read, the amendments by way of provisos and Explanations are considered, when both textual and contextual interpretations are taken into account and a harmonious construction is made, it would be evident that the intention was that the assessee who collects sales-tax, etc. during the previous year and pays or deposits the tax pertaining to the last quarter in the early part of the next succeeding previous year and, in any event, before the filing of the return for the previous year, it would be treated as sufficient compliance with the provisions of section 43B. Any other interpretation would mean that the assessee would be denied deduction of such taxes in the subsequent assessment year only because the liability in respect of that tax did not arise in that year, but in an earlier year a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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