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TMI Blog1998 (9) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... the entry of methyl alcohol taxable at the rate of 26 per cent and not as unclassified goods? 2.. Whether the Tribunal was justified in law in holding that water methonol mixture is not commercially a different commodity than methyl alcohol? 2.. The case of the petitioner is that the petitioner purchases methyl alcohol from different distilleries and also from the open market and dilute the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d should not be taxed as methyl alcohol under the said Act. 3.. The Standing Counsel appearing for the department argued that methyl alcohol has so many use and one of the use of methyl alcohol by adding water is for the aviation purposes. No new process for manufacture takes place by addition of water to methyl alcohol. It only dilutes the strength of methyl alcohol and nothing else. 4.. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Commissioner of Sales Tax v. Indian Oil Corporation Ltd. [1978] 41 STC 471, wherein the Bombay High Court has been pleased to hold that methonol mixed with distilled water in certain proportion, tested in the laboratory and sold it for specific purpose of using it as a power augmentation to it mainly in aeroplane engines for the purposes of take-off brings into existence a new product co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into existence and the mixing of methonol with distilled water carried out by the petitioner does amount to manufacture within the meaning of clause (17) of section 2 of the Act. In the present case, the definition of word manufacture is equally wide and include processing and treatment. In the instant case methyl alcohol is being processed and treated for manufacturing of a new product. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w whereas the rectified spirit is taxable under the Central Act [AIR 1997 SC 1208 (Bihar Distillery v. Union of India)]. The nature character and use of a particular item is changed by mixing the same with water and a new product is born. The same cannot be said to be the same old undiluted product. Dilution of product makes it altogether different. As such taxable liability of the petitioner s pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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