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TMI Blog2009 (2) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing this appeal. The question, therefore is answered in favour of the appellant and against the Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... the Joint Commissioner of Commercial Taxes (Appeals). The second respondent-appellate authority allowed the appeal of the appellant on the ground that the appellant, in the course of executing works contract of laying roads, manufactured bitumen mixture using bitumen, chemicals, jelly, etc. The first appellate authority, after appreciating the process of manufacture involving proper mixing of all ingredients, transporting of bitumen mixture to work site and laying of roads, held that SKO acts as catalyst in the manufacture of bitumen mixture which was used for laying of roads. As bitumen mixture was used while executing works contract of laying roads, there was no violation of section 5A(3)(iii) of the Act. The Additional Commissioner of Commercial Taxes, exercising the powers conferred on him under section 22A(1) of the Act, issued notice for taking up the said matter in suo motu revision. The first respondent, i.e., the revisional authority, proceeded on the assumption that SKO was being used by the appellant, in heating the drums containing the asphalt mix. Thus, from the impugned order, it appears that there was some doubt with regard to the use of SKO by the appellant. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also means 'used up', 'spent', etc. The goods purchased should be consumed, the consumption should be in the process of manufacture, and the result must be the manufacture of other goods. There are several criteria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture, and where there is no essential difference in identity between the original commodity and the processed article, it is not correct to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, processed commodity must be regarded as still retaining its original identity. 26.. Manufacture implies a change but every change is not manufacture. Something more is necessary. There must be a transformation as a result of the process undertaken on the product and a new and different article having a distinctive name or character must emerge. The true test for determining whether a manufacture has taken place is whether the commodity which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that but for the process of printing, the bottles will serve no purpose or are of no commercial use. 17.. Learned counsel for the Revenue has strenuously contended that the printing on the bottles will make them a different commodity known as printed bottles. According to him such printed bottles cannot be of any general commercial use but they will be useful only for the persons on whose behalf and for whose benefit such printing has been done. Therefore, according to him the process of printing on bottles is a 'manufacturing' process. Reliance is placed by him on the judgment of this court in Empire Industries Limited v. Union of India [1987] 64 STC 42 (SC); [1985] 3 SCC 314. The question which arose for consideration in that case was whether introduction of subclauses (v), (vi) and (vii) in section 2(f) of the Central Excises and Salt Act by Act 6 of 1980 was valid. While upholding the validity of the amendment of the section by which the definition of 'manufacture' was widened so as to include the process of bleaching, dyeing, printing, finishing, etc., with reference to cotton fabrics and man-made fabrics, the court considered what constituted 'manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They may be used in their natural form or used after being converted into powder. The mere change into the powdered form, in our view, does not change the 'essential nature' of the commodity, as stated in Tungabhadra Industries' case [1960] 11 STC 827 or the substantial identity, as stated in Pio Foods' case [1980] 46 STC 63 and Sterling Foods' case [1986] 63 STC 239 decided by the Supreme Court. There is only a change in the form and no change in the substantial identity." A perusal of the aforesaid judgments would show that in the ultimate process, some new product must come out of the said manufacture or mixing process, which should be different from, the commodities which have been used for manufacturing it. In the case on hand, the bitumen chemicals, jelly and SKO, cannot be used independently, unless they undergo certain process whereby it becomes bitumen mixture or asphalt. That bitumen mixture or asphalt which ultimately is laid for the purpose of road can be made only by undergoing some process and that process of mixing the said ingredients make the mixture usable. Thus, there is definitely change in the end result of such mixing. In the light ..... X X X X Extracts X X X X X X X X Extracts X X X X
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