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TMI Blog2003 (8) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... by them within the State and on the turnover of goods taxable at the point of last purchase in the State which are used by such units for manufacturing other goods within the State or inter- State. The benefit of the notification is applicable only if a totally different commercial product is manufactured and what is meant by manufacture is defined in the notification itself. It is specifically mentioned that manufacture shall not include mere process applied for preserving the goods in good condition or for easy transportation. Earlier Government clarified that procedure of chemically treated rubber wood will not amount to manufacturing process. Appellant approached this Court by filing O.P. No. 20644 of 1999 and this Court by annexure A1 judgment directed the Commissioner of Commercial Taxes to consider whether the petitioner is entitled to get the benefit of the above notification and whether the petitioner's product, chemically treated rubber wood satisfies the definition of manufacture. After considering the various decisions thorough discussion on the subject in annexure A1 well-considered judgment the learned single Judge (Justice Sivarajan) held as follows: "In the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the incentives mentioned therein. But the S.R.O. No. 1729 of 1993 was later amended by S.R.O. No. 295 of 1998 under which chemical treatment of rubber wood shall be deemed to be 'manufacture' for the purpose of this notification with effect from April 1, 1998. It is seen that the intention of the Government was to provide some incentives to industries engaged in chemical treatment of rubber wood, though such treatment cannot strictly be regarded as 'manufacture'. Taking into consideration the above facts and circumstances, it is clarified that the chemical treatment of rubber wood is not 'manufacture' in the strict sense of the term. However, such treatment will be deemed as manufacture with effect from April 4, 1998 in accordance with the provisions of S.R.O. No. 295 of 1998. The request for clarification is disposed of accordingly." The above order is challenged in this appeal. 3.. Before going into the question whether the process applied to make chemically treated rubber wood is a manufacturing process and whether chemically treated rubber wood is a commercially different product from raw rubber wood, we would consider the definition of "manufacture" as defined in sub-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the auxillary pressure vessel. A pneumatic pressure of 20kg/cm2 is applied and from the level difference of the CCA solution in the auxillary pressure vessel the quantity of absorbtion is calculated. Once the desired quantity has been absorbed, the salt solution is pumped out and 100 per cent moisture content timber is cross stacked for air curing to get the CCA solution stabilised with the timber. The 100 per cent moisture content timber is then loaded into the thermic fluid heated cross ventilated seasoning kiln for controlled drying by controlling the relative humidity of the chamber. The process of mechanical curing take 14 days of continuous drying by controlling the wet bulb and dry bulb temperatures which are monitored in a oven with a relative load of material as in the kiln. The timber cured in the kiln is stabilised with respect to the equilibrium moisture content of the region where the timber is to be used. This process is a cycle of 48 hours wherein steam is used for controlling the wet bulb and dry bulb temperatures." 5.. Before going into the merits we may also take note of the submission by the appellant that several industrial units were given the benefits of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove notification. It is the contention of the petitioner that S.R.O. No. 295 of 1998 (annexure A2) is only clarificatory in nature. We are of the opinion that after the opinion of the State Level Committee, a fact finding body, and considering the fact that many similarly placed units were given the benefit, this S.R.O. was issued. The above is curative or remedial in character and clarificatory in nature. 6.. It is not disputed that rubber wood before treatment can be used only as firewood. It is neither durable nor hard enough to make furniture. For making furniture, raw rubber wood has to be converted into chemically treated rubber wood. After complicated process of chemical treatment its utility and character are changed. The change made in the rubber wood which was earlier considered as a firewood to a category of timber which can be used for making furniture, etc., shows that the chemical treatment of rubber wood resulted in the production of a new and different article which is recognised by the trade as a new and different commodity as timber that can be used for manufacturing furniture. When timber like teak, rose wood, etc., are used for manufacturing furniture, it beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that " 'Greyfabric' after they undergo the various processes of bleaching, dyeing, sizing, printing, finishing, etc., emerges as a commercially different commodity with its own price-structure, utility and other commercial incidents and that there was in that sense a 'manufacture' within the meaning of section 2(f), even as unamended". The Supreme Court in Aditya Mills Limited v. Union of India [1989] 73 STC 195; AIR 1988 SC 2237 with reference to the principles laid down in earlier decisions observed in (para 6) thus: "Hence, the short question involved in this appeal, is: whether the goods in question, namely, a special type of yarn marked as a finished product known as 'PPRF yarn', should be treated as such and taxed on that basis. Excise duty is a duty on the manufacture of goods and not on sale. Manufacture is complete as soon as by the application of one or more process, the raw material undergoes some change. If a new substance is brought into existence or if a new or different article having a distinct name, character or use results from particular process or processes, such process or activity would amount to manufacture. The moment there is transformation into a ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment is only clarificatory in nature. The amendment brought into by S.R.O. No. 295 of 1998 is only clarificatory in nature. Further citizens doing industrial units in similar activity cannot be treated differently. Even before the amendment came into force, several units were given the benefit and there cannot be any discrimination and it cannot be stated that it is manufacture for some units and not manufacture for the appellant's unit. State cannot discriminate the industrial units doing the same manufacturing activities and cannot ignore the mandate of article 14. The detailed chemical treatment is not mainly to preserve the goods in good condition and for easy transportation. By the processing, wood in question becomes not only durable but it is transformed into timber having strength and capability for making furniture and the entire trade as well as the ordinary people who deals with rubber wood consider it as a commercially different product. After detailed chemical treatment the character of a mere rubber wood will change as a commercially known timber for manufacturing furniture. The process applied in this case is not a mere processing or preserving the goods in good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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