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TMI Blog2006 (8) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... al. Moreover, even if it is not a different commercial commodity, the process of making coal briquettes will amount to a "manufacture" as it is processing, treating or adapting coal. - Civil Appeals Nos. 1790-1793 of 2005, - - - Dated:- 1-8-2006 - ASHOK BHAN AND MARKANDEY KATJU JJ. Rakesh Dwivedi, Senior Advocate (C.L. Pandey, P.K. Goswami and P.K. Jain, Advocates with him) for the appellant. Subodh Markandeya, Senior Advocate (Kamlendra Mishra, Rajeev Dubey and C.S. Ashri, Advocates with him) for the respondent. -------------------------------------------------- The judgment of the court was delivered by MARKANDEY KATJU J. Civil Appeal No. 1790 of 2005 has been filed against the judgment and order dated June 25, 2004 of the learned single Judge of the Allahabad High Court in Trade Tax Revision No. 1261 of 004 Sonebhadra Fuels, Ravinagar v. Commissioner, Trade Tax, U.P., Lucknow. See page 580 supra. Heard learned counsel for the parties. The appellant is carrying on business in coal and also manufactures "coal briquettes", popularly known as "coal tikli". The assessee applied for exemption/rebate of sales tax claiming that the coal briquettes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e-1) of the Act includes "processing, treating or adapting any goods". Thus, the meaning of "manufacture" in the U.P. Trade Tax Act is wider than that in the Central Excise Act, 1944. A dealer will be liable to pay tax on sale of any goods he makes by processing, treating or adapting the goods he purchased by complying with the requirements of clause (ii) of section 3(b) of the U.P. Trade Tax Act. In B.P. Oil Mills AIR 1998 SC 3055 1998] 111 STC 188 (SC)., this court referred to a large number of earlier rulings on this point and it is not necessary for us to refer to all of them here. We may, however, refer to the decision in Chowgule Co. Pvt. Ltd. v. Union of India AIR 1981 SC 1014 [1981] 47 STC 124 (SC). where this court observed that where any commodity is subjected to a process or treatment with a view to its development or preparation for the market it would amount to processing. The nature and extent of processing may vary from case to case; in one case the processing may be slight and in another it may be extensive; but in each process suffered the commodity would experience a change. The court further observed that whatever be the means employed for carrying out the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a new article. There is, therefore, inherent evidence in the definition itself that the narrow meaning of the word 'manufacture' was not intended to be applied in the said Act. Again the definition speaks of 'the process of lopping of branches (of trees), cutting the trunks'. The lopping of branches and the cutting of trunks of trees also, self evidently, does not produce a new article. The clear words of the definition, therefore, must be given due weight and cannot be overlooked merely because in other contexts the word 'manufacture' has been judicially held to refer to the process of manufacture of new articles." In Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Coco Fibres AIR 1991 SC 378 [1991] 80 STC 249 (SC)., this court considered the provisions of the Kerala General Sales Tax Act, 1963 wherein the term "manufacturing process" was considered and held that conversion of coconut husk into a coconut fibre was a manufacturing process. This court held that by the process of manufacture, something is produced and brought into existence which is different from that out of which it is made, in the sense that the thing produced is by itself a commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bringing into existence of a new substance and does not mean merely to bring some change in a substance, however, minor in consequence the change may be. In a manufacture, there must be transformation and a different article must emerge having a distinctive name, character or use. A similar view has been reiterated in Rajasthan State Electricity Board v. Associated Stone Industries [2000] 6 SCC 141. In State of Maharashtra v. Mahalaxmi Stores [2003] 1 SCC 70 [2003] 129 STC 79 (SC)., this court held that processing or variation of the goods or finishing of goods would not amount to manufacture unless it results in emergence of a new commercial commodity. In Aspinwall Co. Ltd. v. Commissioner of Income-tax, Ernakulam [2001] 251 ITR 323 (SC); [2001] 7 SCC 525 [2002] 125 STC 101 (SC); [2001] 251 ITR 323 (SC)., this court considered the meaning of the word "manufacture" as it occurred in section 32-A(1) and (2)(iii) of the Income-tax Act, 1961 and held that the word must be understood in common parlance and it may mean production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quettes is coal ground to generally, below 2 mm. size. The crushed coal is mixed with suitable binders and pressed in briquetting press out of which regular shape required. Briquettes may be carbonized in suitable carboniser. The size of coal (30-100mm) required for manufacturing Special Smokeless Fuel (SSF) is different from the size of coal required for making coal briquettes. No binder is required to be used for production of SSF)." In our opinion, the process mentioned above is clearly processing, treating or adapting the coal. Hence, in our opinion, it is a "manufacture". Learned counsel for the appellant Shri Rakesh Dwivedi submitted that coal briquettes are produced merely by using a binding material such as clay or molasses along with the coal, and hence he submitted that the identity does not change. We regret, we cannot agree with his submission. Firstly, we do not agree that the coal briquettes are the same commercial commodity as coal. In our opinion, coal is a raw material for making coal briquettes. The method of manufacturing coal briquettes has been stated above, and this certainly is a processing, treating or adapting the coal. The appellant manufactures coal bri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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