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TMI Blog2004 (3) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 16-3-2004 - R. Gururajan, J. REPRESENTED BY : S/Shri Sarangan, Sr. Advocate, Smt. A. Rama and D. Venkatesh, Advocates, for the Petitioner. Shri Anand, HCGA, for the Respondent. [Order]. Petitioner is seeking for a writ of certiorari to quash the impugned order dtd. 2-3-2002 passed by the State Level Committee annexure-K. I.A.II was filed seeking for amendment of the prayer. The same was allowed. In terms of the amendment, petitioner is now challenging only annexure-Q dtd. 14-11-2003. 2. Facts in brief are as under : Petitioner is a Limited Company. Petitioner is a registered dealer under Sec. 12-E of the Karnataka Sales Tax Act, 1957 (for short the KST Act ). Petitioner has put up a cement unit at Penambur, Mangalore. Petitioner manufactures Cement at its various plants located in the States of Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh and Orissa. The Cement unit at Mangalore has several basic features. Details of the system established at Mangalore is enumerated in the project report filed at annexure-A. The State Government issued a notification dtd. 15-6-1996 r/w notification dated 15-6-1996 as per annexures B and C. The notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity and the Homogenisation takes place at Mangalore. According to the learned counsel Homogenisation is also a manufacturing process and it cannot be excluded. His further submission is that Homogenisation is referable to quality of cement and quality cement alone is marketable as per his submissions. He also refers to the notification to contend that the object of the notification is to provide for incentives and those incentives are not to be denied to the petitioner. He strongly relies on the various judgments of this Court in support of his case. 5. Per contra, learned Government Advocate would say that the material facts would show that no manufacturing activity as such takes place at Mangalore. His submission is that Homogenisation process at Mangalore cannot be classified as a manufacturing activity in the given circumstances. He also relies on several judgments. 6. After hearing the learned counsel I have carefully perused the material on record. The only issue to be adjudicated is as to whether any manufacture in tems of the notification is be carried on by the petitioner at Mangalore in the given circumstances. To consider this crucial issue, facts are required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. It also provides for a certificate at the hands of the Commissioner for Industrial Development and Director of Industries and Commerce, Bangalore. Notification dtd. 15-11-1996 provides for a certificate from the Director of Industries with regard to production. A procedure is also prescribed in the order. Petitioner submitted an application for issuance of an eligibility certificate in terms of a letter dtd. 16-12-1998. Annexure-B is the letter issued by the office of the Joint Director, District Industries Centre, to the Joint Director (ID), informing him that there is no manufacturing activity at Mangalore unit. It is stated in the said letter that if the Government does not offer sales tax exemption, the unit will incur loss for 3 to 4 years. It is further stated that the said unit is Hitech, pollution free and employed local people and as a special case sales tax exemption may be granted for a period of five years. Petitioner also addressed a letter dtd. 16-1-99 to the Director of Industries and Commerce explaining their activity in this State. On receipt of the same an endorsement was issued in terms of annexure-G rejecting the request of the petitioner. Writ Petitions w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one or more process through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and there may be several stages of processing and 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 article 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. 7.4 In M. Salgaocar Bros. (P) Ltd. v. CIT., [1996 (41) KLJ 79] a Division Bench of this court has considered the term new industrial undertaking and also the term manufacturing process . The Court ruled as under : The term produce is wider in its amplitude than the term manufacture , for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Bombay High Court in K.S. Films v. State of Maharashtra, (1969) 23 STC 121 to contend that the article produced must be saleable i.e., capable of being sold. 7.8 Petitioner also relies on Salar Jung Sugar Mills Ltd. v. State of Mysore, (1972) 29 STC 246 in support of his submission. In this case this Court considered the saleable commodity. 7.9 Petitioner relies on a judgment of the Andhra Pradesh High Court in State of Andhra Pradesh v. Abdul Bakshi Bros, (1964) 15 STC 645 to contend that saleability is the necessary ingredient. 7.10 Petitioner relies on a judgment of the Gujarat High Court in (1992) 86 STC 238 to contend that liberal interpretation has to be given in the matter. 8. Per contra, learned Government Advocate relies on the following judgments reported in 46 STC 63 = 1980 (6) E.L.T. 343 (S.C.), 47 STC 124 = 1993 (67) E.L.T. 34 (S.C.), 1996 (41) KLJ 79, 74 STC 403 = 1988 (38) E.L.T. 535 (S.C.). He contends that based on these judgments a new commodity has to come into existence for consideration of manufacture . He says that all these judgments would negative the petitioner s arguments. 9. From these judgments what is clear to this court is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that are experienced by the commodity takes the commodity to the point of being known commercially as a distinctly different commodity, that the process can be said to have resulted in manufacturing as production. The fact that the Iron ore is subjected to the process of sizing and washing any therefore at best be said to be a process but not a process which results in any production or manufacture. The above reasoning holds good even for the pilot plant. The pilot plant was only meant to carry out some exploratory exercises with a view to finding out whether the excavation of the ore from a particular spot or a particular grade was economically viable. It did not itself result in the manufacture or production of any new article. That being so, the Pilot Plant can also not be said to be sued in the manufacture or production of any article so as to qualify for the benefit claimed by the assessee. 11. This judgment is a complete answer to process manufacture arguments and to the argument of saleable commodity as pointed out by the learned Government Advocate. The Homogenisation may be at best be a process but not a process which results in production or manufacture. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Union of India v. Ahmedabad Electricity Co., Ltd. [AIR 2004 SC 11 = 2003 (158) E.L.T. 3 (S.C.)] wherein the Supreme Court has ruled that the word manufacture used as a verb is generally understood to mean as bringing into existence a new substance. Manufacture may involve various processes. The aim of any manufacturing activity is to achieve and end product. This judgment nails the arguments/contentions of the petitioner. 15. There is one more reason as to why the petitioner cannot be given the concession in this case. It can be forgotten that the State by offering concessions, is losing substantial revenue legally due to it. The said concession is granted in the light of the availability of employment and the fixed assets etc. in fact, in the case on had, annexure-E would show that no eligibility certificate as such is available to the petitioner on the facts of this case. The terms of the averment in para 7. These mattes are essentially for the authorities to consider/decide and courts should not go into that argument unless a very strong case is made out by the petitioner dislodging a factual finding of authorities. In the case on hand looking from any angle, no such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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