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TMI Blog2008 (5) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... common judgment and order dated July 21, 2003. The Act was enacted to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence and control of markets therefor in Uttar Pradesh. Before embarking on the question, we may notice some of the relevant provisions of the Act. Sections 2(a), 2(d), 6, 8, 17(iii)(b) read as under: "2. (a) 'agricultural produce' means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry or forest as are specified in the Schedule, and includes admixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, Khandsari and jaggery; 2(a1) 'Board' means the State Agricultural Produce Markets Board constituted under section 26A; 2(d) 'Central Warehousing Corporation' means the Central Warehousing Corporation established or deemed to be established under the Warehousing Corporations Act, 1962; 2(d1) 'Collector', in relation to a committee for a market area means the Collector of the District where the principal market yard of that market area is situated, and includes suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, agreements or other matter or thing arising in relation to any part of the market area of a dissolved market committee shall be vested in and stand transferred to the new market committee having jurisdiction over that part. (3) Where a market area ceases to be such area under clause (e) of sub-section (1), the following consequences shall, with effect from the date specified in the notification, follow: (a) the market committee shall stand dissolved and its members shall vacate their offices as such members; (b) the principal market yard and sub-market yards, if any, established therein shall cease to be such; (c) the unspent balances of the market committee fund and other assets and liabilities of the market committee shall vest in the State Government: Provided that the liability of the State Government shall not extend beyond the assets so vested. 17.. Powers of the committee.-A committee shall, for the purposes of this Act, have the power to- (i) and (ii) . . . (iii) Levy and collect,- (a) such fees as may be prescribed for the issue or renewal of licences; and (b) market fee which shall be payable on transactions of sale of specified agricultural produce in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y: Provided also that no market fee or development cess shall be levied on transactions of sale of specified agricultural produce on which market fee or development cess has been levied in any market area if the trader furnishes in the form and manner prescribed, a declaration or certificate that no such specified agricultural produce market fee or development cess has already been levied in any other market area." In the Schedule appended to the Act, tobacco is mentioned at item No. V. The question which arises for consideration is as to whether Zafrani zarda is a processed form or manufactured form prepared from the raw material tobacco. The process undertaken to manufacture Zafrani zarda is admitted. It was stated by the appellant in their writ petition to be as under: "7. That the petitioner used to purchase the raw tobacco/processed tobacco outside the Mandi Samiti Allahabad. However, it is stated that the Zafrani zarda or Zafrani patti is used for chewing which is prepared from the raw tobacco. The jaggery juice is sprinkled on the raw tobacco and then it is cut into small pieces by shearing machine. The resulting tobacco is called as 'nice tobacco'. The 'nice tobacco' i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mended by the Amending Act of 1982 effective from April 30, 1982, the English rendering of which is as under: 'Agricultural produce' means all produce whether processed or non-processed, manufactured or not, product of agriculture, horticulture, plantation, animal husbandry, forest, sericulture, pisciculture, livestock or poultry, as specified in the Schedule." This court clearly affirmed the finding of the Patna High Court that "zarda" is a variety of manufactured tobacco and not in its processed or non-processed form. Similar reasonings have been adopted by this court in Dharampal Satyapal v. Commissioner of Central Excise [2005] 4 SCC 337 wherein in relation to levy of Central excise, it was held: "19. Applying the above tests to the facts of this case, we find that sada kimam was bought by the assessee as a raw material which was then blended with saffron, perfumes, menthol, etc. to form a compound which was then packed in 'balties' and cleared to the above three licensed units at Okhla Industrial Estate, Phase II, New Delhi, Noida (U.P.) and Barotiwala (H.P.), where Tulsi Zafrani zarda was manufactured. That, the assessee used to buy a similar compound (Lucknowi kimam) fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a new product, the same would be deemed to be manufactured goods as contra-distinguished from processed goods. Market fee is leviable on specified agricultural produce, not on agricultural produce simpliciter. Zarda is not a specified agricultural produce. It can be subjected to payment of market fee provided it is held to be "tobacco ". Zafrani Zarda, as an agricultural produce for the purpose of market fee must answer the description of "specified agricultural produce" as defined in section 2(a) of the Act. If it is held that Zafrani zarda is merely a processed form of tobacco, it would be subjected to levy of market fee, but if it is manufactured, it would not. In this case, Zafrani zarda, in view of the decision of this court in Prabhat Zarda [1994] Supp 2 SCC 514, must be held to be a manufactured product. The distinction between "manufactured" and "processed" may not in all situations depend upon the nature of the statute involved. It must pass the requisite test, namely, as to whether it is a completely new item. The raw material of a manufactured product has to be distinguished from the manufactured product. The distinction between "processing" and "manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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