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TMI Blog2005 (5) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... and as borne from the order of the lower authorities are that the assessee is a partnership firm engaged in the business of manufacturing of continuous stationery for computer printing. It has set up an industrial undertaking in the backward Union Territory of Daman and the main raw material required for manufacturing are paper rolls of different sizes, gum, carbon paper and ink, etc. These rolls are loaded on the unwind section of the machine and passed through tension controller. Thereafter, when it comes to the printing tower, the matter is printed in one or more colours on the front or even backside also. Then the paper goes to the process section where it is first, side perforated or trimmed and then it is subjected to the sprocket pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per in homologue, a product modified but unaltered in its essential character. The Assessing Officer relied on the decisions of CST v. Paper Process Works [1986] 62 STC 317 (Bom) in which it was held that cutting of high larger reels of paper into smaller reels does not amount to manufacture. He also relied on the decision of the hon ble Supreme Court in the case of CCE v. Bakelite Hylam Ltd. [1997] 10 SCC 350, 361, 362, wherein it was held that cutting industrial laminated sheets and glaze epoxy laminated sheets into requisite size and punching holes for making them capable of being fitted as insulators does not amount to manufacturing activity. He also referred to the decision of CCE v. Kutty Flush Doors and Furniture Co. P. Ltd. [198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand, learned counsel for the assessee, Shri Farrokh Irani, stated that as per the provisions of section 80-IA(2), the deduction is available not only to a manufacturer of specified articles or things but also who produces such articles or things. Manufacture means making of articles, which are commercially different from the basic components by physical labour or mechanical process. He further stated that the continuous stationery is a commodity specifically manufactured for the computer printing only. The raw material in the shape of paper sheets, gum, ink, etc., undergoes various processes and with every process the commodity experiences change and at the end of the series of processes it is a commercially different product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 7, while explaining term manufacture has broadly laid down the following tests : (i) When the change or a series of changes takes the commodity to a point where commercially it can no longer be regarded as original commodity but instead it is recognised as new and distinct article ; (ii) when there is a transformation into a new commodity, commercially known as a distinct and having its own character, use and name ; and (iii) When something is brought into existence which is different from that originally existed and the purpose of change to make it marketable. The hon ble Supreme Court has also explained the word manufacture in the case of Aspinwall and Co. Ltd. v. CIT reported in [2001] 251 ITR 323 wherein it has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he continuous paper stationery has a distinct character, use and name and the end-product is not capable to be brought back to its original shape. The raw materials undergo various processes and what emerges is a new and different product as understood in the relevant commercial circles. The continuous computer stationery is made specifically for the purpose of use in the printer attached with the computer. Moreover, the assessee is also registered as a manufacturing concern with the State and the Central sales tax authorities. The issue before the hon ble Bombay High Court at the time of deciding the case of CIT v. Fashion Prints Ltd. [1996] 217 ITR 456, was whether the assessee engaged in the business of dyeing, printing and processing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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