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TMI Blog2006 (2) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the manufacturing of cut size paper and exemption in respect thereof should also be allowed for which review application was moved, which was rejected on the ground that the conversion of desired cut size of paper from the big size of paper did not involve manufacturing. Applicant filed appeal before the Tribunal, which has been rejected by the impugned order. 3. Heard learned Counsel for the parties. 4. Question involved for consideration is whether process of cutting of paper into desired size of paper which is normally sold in the market in the name of type paper, duplicate paper etc. amounts to manufacturing process and the applicant is entitled for exemption under Section 4-A of the Act on such cut size of paper which is claimed to be manufactured product. 5. Learned Counsel for the applicant submitted that by process of cutting the desired size of paper is obtained which is sold in the market as a type paper, duplicate paper etc. which is commercially known as different good than paper out of which they have been obtained and thus, process of cutting amounts to manufacturing and cut size paper is a final product on which the applicant is entitled for exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Trade Tax (supra) held as follows: Further, if items purchased as iron steel scrap from the railways are cut to smaller sizes for facility of transport etc., the activity would not amount to manufacture. It is anomalous to say that the dealer was manufacturing scrap out of scrap. As held by the Hon'ble Supreme Court in State of Tamil Nadu v. P. L. Malhotra, 1976 U.P.T.C. 282, where commercial goods without change of their identity as such goods are merely subjected to some processing or finishing or are merely joined together, they may remain commercially the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type. Iron and steel including scrap is subjected to single point tax and the definition of 'manufacture' as quoted above cannot be so extended that cutting the scrap of rails into smaller pieces may be treated as manufacturing scrap. 11. In the case of Commissioner of Sales Tax v. National Industries Corporation, 1991 U.P.T.C. 712 process of repacking of grease in small container has been held not amounting to manufacture within the defination of Section 2 (e-1) of the Act. This Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. It is true that under the section it is not necessary that there should be 'manufacture' in the sense that a new commodity has been brought into existence as would have been required if that words is interpreted in its literal sense. But, at the same time, the section should be so interpreted to mean only such of the various processes referred to in the definition and applied to the goods as are of such a character as to have an impact on the nature of the goods. In other words, though the words used by the statute, namely, processed or altered in any manner after such purchase were very wide, the Court read down the scope of this expression and considered that, for the purposes of the definition, there should be some alteration in the nature or character of the goods. In our opinion, the interpretation of Section 2(17) calls for a like limitation on the words used by the statute. As we have already pointed out, that if a very wide interpretation is given, it may lead to impractical consequences. 15. In the case of Krishna Chander Dutta (Spice) Pvt. Ltd. v. Commercial Tax Officer and others, reported in 1994 U.P.T.C. 553 (SC): (1994) 93 S.T.C. 180, dealer was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court that is assailed in this appeal by the Revenue. 19. Section 2 (17) of the Act defines the term manufacture and it reads thus: Manufacture with all the grammatical variations and cognate expressions means producing making, extracting, alternating, ornamenting, finishing or otherwise processing, treating or adapting any goods but does not include such manufacture or manufacturing processes as may be prescribed. From a perusal of the definition, extracted above, it is clear that the processes of producing, making, extracting, alternating, ornamenting, finishing or otherwise processing, treating or adapting of any goods fall within the meaning of the term 'manufacture'. But it may be pointed out that every type of variation of the goods or finishing of goods would not amount to manufacture unless it results in emergence of new commercial commodity. In the instance case, the every nature of the activity does not result in manufacture because no new commercial commodity comes into existence. 19. Perusal of the definition of Section 2 (e-1) of the Act shows that the process of cutting is not being included within the definition of manufacture. Thus th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item No. 55 of the First Schedule of the Act. It has been held that in any case they had by so mixing the ingredients adapted such ingredients for specific use by the patient for whom the pharmaceutical preparation had been prepared. Activity of the dealer in preparing such medicine/ pharmaceutical preparation, therefore, was held manufacturing activity. 23. In the case of Ashirwad Ispat Udyog and others v. State Level Committee and others (supra), the case before Apex Court was that the dealer purchased iron and steel scrap in the shape of defective angles, flats, channels, tubes and coils and cut down it for the purpose of rolling mill and forging part, gear and pinion manufacturers, with the help of shearing machines and glass cutting. On a consideration of the definition of manufacture under Section 2 (j) of the Madhya Pradesh Sales Tax Act. The Apex Court held that manufacture has been defined as including a process or manner of producing, collecting, extracting, preparing or making any goods. There can be no doubt whatsoever that collecting goods does not result in the production of a new article. The Apex Court held that when the Legislature creates such definition wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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