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TMI Blog2013 (11) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... the same by this common order. The first common ground arises for consideration is with regard to disallowance of the cost of chamber assembly. Shri K. I. John, the learned representative for the taxpayer, submitted that the taxpayer is engaged in the business of manufacture of tread rubber. According to the learned representative, in the course of its business activity, the taxpayer has replaced the chamber assembly, which is a part of intermix machine consisting of motor, gear box, top cylinder, chamber assembly, hydraulic power back and motor starter. What was replaced is only chamber assembly. Accordingly to the learned representative, the chamber assembly has no independent function. The chamber assembly can perform its function only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endently. In other words, the chamber assembly is not an independent machine. It cannot perform any independent or separate function at all. The chamber assembly can perform its function along with other machineries which was part of intermix machine. Therefore, according to the learned representative, the judgment of the apex court in the case of Saravana Spinning Mills P. Ltd. is not applicable to the facts of the case. In fact, for the assessment year 2007-08 the first appellate authority found that the cost of replacement of chamber assembly is a revenue expenditure within the meaning of section 31(i) of the Act. However, for the assessment year 2006-07 he has decided the same as capital expenditure. Since the facts are not in dispute, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixing chamber (chamber assembly) is one of the integral part of the intermix machine. Chamber assembly is fully integrated to the bed plate below the top cylinder. The rotors inside the mixing chamber of the internal mixer rotate in opposite directions and mix the ingredients into rubber compound. Therefore, it is very clear that the chamber assembly cannot perform any independent and separate function. It functions only when it is fed with rotors and other parts of the intermix machine. When the raw rubber is injected into the chamber assembly along with other components the compounded rubber after mixing falls on the open mill. Therefore, once the raw rubber is injected, the finished product would come out after the same is mixed with rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cotton thoroughly before it is fed to the carding department. The function of the carding department is to remove the waste in the cotton received from the blow room. In the carding department there are individual carding machines. They are equipped with auto levelers to produce sliver. The carding machine removes neps formed in the blow room line during the process. The carding machine produces sliver for better quality of yarn. This sliver produced in the carding department is carried to the combing department for manufacturing combed yarn. After the carding operation, the impurities present in the sliver will be removed in the combing department. That sliver which is produced in the combing department will pass through the draw frames ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the carding department in which there are carding machines equipped with autolevelers which produce silver which is then carried forward to the combing department. It is important to note that each department has different items of machines, for example, in the blow room we have machines called beaters. Similarly, in the carding department we have carding machines with autolevelers. If the autolevelers fails, the carding machine becomes non-functional. If an autoleveler is to be repaired then that repair would come within the connotation of the word 'current repairs' because it is a part of the carding machine. Even if in a given case, replacement of an autoleveler could come within the connotation of the word 'current repairs' if the ol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (raw material) is put in and what comes out is steel or iron or aluminium. Another example, in the case of a 'pasteurization plant' we have three chambers and ducts. In the first milk is collected, in the second it is heated and in the third it is cooled. Duct carries hot and cold water. The raw material is raw milk, the end product is the pasteurised milk. In the heat chamber there is the heater. In the cooling chamber we have a cooling plant which has a concept similar to aircondition plant. Such a process is one integrated process. Therefore, the Tribunal and the High Court erred in holding that the manufacturing process is the textile mill is one continuous integrated process." In view of the above observations of the apex court it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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