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TMI Blog2008 (9) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for the relevant year was engaged in business of masala. The assessee had claimed deduction under section 80IB treating the business as industrial undertaking for manufacture and sale of masala. The Assessing Officer however noted that the assessee was only purchasing raw material in the form of different spices which were grinded and mixed and filled in pouches and then sold. This according to the Assessing Officer was only processing and not manufacture. He placed reliance on the judgment of Hon ble Supreme Court in case of Appeejay (P.) Ltd. v. CIT [1994] 206 ITR 367 1 in which it was held that buying different types of tea from the market blending them in different proportions and selling the blended tea was processing and not manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king them undergo 9 processes to give them the shape of coffee beans amounted to manufacture as changes made in the material resulted into new and different articles which was recognised as different product. The assessee also referred to several decision of the Mumbai Bench of Tribunal such as in case of Pankaj Jain v. ITO [2007] 104 ITD 1552 (Asr.) and in case of Comet Foods Metals Ltd. v. ITO [2005] 4 SOT 173 (Mum.). CIT(A) being satisfied with the explanation given by the assessee, agreed that the end product in this case was completely different from the raw material and therefore the case of the assessee was manufacture and not processing. He also observed that the department had already allowed the claim of manufacture in the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input and is known as a commercially different product in the business parlance. The assessee in this case is using different spices as inputs which are roasted, fried, polished, mixed in different proportions. Thereafter further processes such as drying boiling, pulping grinding etc., are applied with the help of machineries and the end product which is made is then packed and sold in the market. The assessee is producing different variety of masala such as chewda masala, pickle masala etc., which are commercially known products in the market and these products are different from the different spices used in the process. Thus in our view will amount to manufacturing of goods and not processing. 4.1 The judgment of Hon ble Supreme in Cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In case of Indian Hotels Co. Ltd. (supra) food stuffs prepared by cooking from the raw material such as cereals, vegetables and meet was not regarded as manufacture as the end product was not a commercially different commodity. For example, in case of meet, input and output remained the same i.e., meet. The Hon ble Supreme Court, therefore, held that raw material in such cases could atmost be said to have been processed and made eatable and it was not a case of manufactures. In case of Sacs Eagles Chicory (supra) the Hon ble High Court of Madras noted that chicory powder obtained from chicory was nothing but chicory in powder form. It was, therefore, a mere change in the form of the same commodity and not manufacture. The case of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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