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TMI Blog2016 (10) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... ears from the record that this tax appeal is a cognate tax appeal to other appeals, which are numbered as Tax Appeal No.924 of 2013 to Tax Appeal No. 927 of 2013 and since the issues arising out of those are identically situated to the present tax appeal, the consolidated order came to be passed on 13.12.2013 while admitting these appeals. 3. Since the facts are similar in all these appeals, the issue is taken up for final disposal by treating Tax Appeal No.923 of 2013 as a lead matter and the same would govern the situation of other tax appeals as referred to above. 4. While admitting these appeals referred to above, following substantial questions of law have been framed for consideration, which are reproduced hereinafter: "(A) Whether on the facts and in the circumstances of the case, the Tribunal has rightly held that, the process carried out by the exporter on goods purchased by the respondent herein - original appellant was not process of "manufacture" as defined under section 2(16) of the GST Act ? (B) Whether on the facts and in the circumstances of the case the Tribunal has rightly held that, the goods exported by the exporter was the same goods purchased from the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstrained to prefer an appeal before the appellate authority and against the said order of appellate authority, the Second Appeal came up for consideration before the VAT Tribunal. The learned VAT Tribunal, as stated above, has allowed the appeal, which has given rise to present tax appeal and hence, in the background of the aforesaid facts, the substantial questions of law came to be framed and the appeal has come up for final disposal. 7. The learned Assistant Government Pleader, Mr. Pranav Trivedi, has contended that the learned Tribunal has erred in considering the process executed upon the Castor oil is not a manufacturing process. It was also pointed out by the learned counsel that the Castor oil was not retained in its original form by the purchaser from the opponent and therefore, the Tribunal ought to have appreciated the fact that having not maintained the same form of the commodity, the process which was undertaken was akin to manufacturing process. The learned Tribunal, has therefore, erroneously held the effect of Section 5(3) of the Central Sales Tax Act, 1956. Learned AGP has also contended that the learned Tribunal has misinterpreted the statutory provision contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion arrived at upon detailed examination does not call for any interference. The learned counsel for the opponent has submitted that opponent has sold a commercial grade Castor oil to Hindustan Unilever Ltd. ("HUL" for the short) as exporter and the said sale has taken place against 'Form H' and it was that oil after refining process was exported as First Special Grade by HUL. The process, according to the counsel, is not that process which has changed the basic substance of Castor oil and therefore, the said processed article remained covered under Entry no.185 (II) in Schedule IIA. The learned counsel has drawn attention and contended the applicability of said Entry contained in Schedule IIA. The learned counsel has further drawn attention of this court about a letter dated 01.11.2004 written by University of Pune and addressed to HUL, which letter is an analysis report of Castor oil samples and has conveyed that goods are matching sufficiently and thus allows one to grade them as having the same quality. In addition to that, another analysis report had also been placed on record by the learned Tribunal at page.93 of the paper book compilation and by drawing atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The learned counsel has drawn the attention of this court to various paragraphs of the said order passed by the High Court in quashing petition. However, the same is not that much relatable are not made part of the present order. It was also contended by the counsel that in various decisions delivered by the Hon'ble Apex Court it has been carved out that this activity, which is alleged to have executed upon the Castor oil, is not a manufacturing activity. To substantiate this contention the following decisions have been placed for consideration of the court. (i) 2005 1 SCC 264 and (ii) 2012 2 SCC 282, and therefore, contended that since the order passed by the learned Tribunal is in consonance with ratio laid down in those decisions and therefore, rightly held by the Tribunal that appeal deserves to be allowed and therefore, the counsel for the opponent submitted that such a pain staking judgment and order does not call for any interference. Hence, the tax appeal is required to be dismissed. No other submissions are made. 10. Having heard the learned counsels appearing for respective parties and having gone through the material on record, we deem it proper to first of all consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly because an item falls in a tariff entry, it could not be presumed or deemed that there was manufacture. It was held that to begin with the product was earth ans that even after processing it remained earth. It was held that the duty having been paid on earth, no duty was leviable on spent earth. 20. In the case of CCE v. Technoweld Industries the question was whether the drawing of wires from wire rods amounted to manufacture. I was held that both the products were wires and merely because they were covered by two separate entries did not mean that the product was excisable. It was held that in the absence of any manufacture the product did not become excisable merely because there were two separate entries. 21. In the case of Meltes (I) (P) Ltd. v. CCE it was again held that the burden of proving manufacture lay on the Revenue. It was held that laminated / metallised film remained a film and no new or distinct product has come into existence. 22. In the case of Aman Marble Industries (P) Ltd. v. CCE the question was whether cutting of marble blocks into marble slabs amounted ton manufacture. It was submitted that such an activity has been specifically brought into the tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat only when change or series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity, but instead is recognized altogether a new and distinct article, then it can be said that manufacturing process is undertaken. In this also the Apex Court has considered the definition of word 'manufacture' and by again referring to several other decisions, has held that since new distinct material altogether is not coming out having different identity and characteristic and use, the mixing process aggregate would not amount to manufacture and therefore, in following paragraphs no.30-34 the Apex Court has analyzed the position which requires the court to take a reference of it and therefore, reproduced herein after: "30. We may now examine whether the process in question, otherwise amounts to manufacture under the expansive Section 2(f) of the Act. It is trite to state that "manufacture" can be said to have taken place only when there is transformation of raw materials into a new and different article having the a different identity, characteristic an use. It is well settled that mere improvement in quality does not amount to manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es (P.) Ltd., the issue for consideration was whether the process of unwinding, cutting and slitting to sizes of jumbo rolls into toilet rolls, napkins and facial tissue papers amounted to manufacture. While holding that the said process did not amount to manufacture this court inter alia, held as under: (SCC p.317, para 12) "12. .... However, the end use of the tissue paper in the jumbo rolls and the end use of the toilet rolls, the table napkins and the facial tissues remains the same, namely, for household or sanitary use. The predominant test in such a case is whether the characteristics of the tissue paper in the jumbo roll enumerated above is different from the characteristics of the tissue paper in the form of table napkins, toilet roll and facial tissue. In the present case, the Tribunal was right in holding that the characteristics of the tissue paper in the jumbo roll are not different form the characteristics of the tissue paper, after slitting and cutting, in the table napkins, in the toilet rolls and in the facial tissues." (emphasis supplied by us) 34. In CST v. Pio Food Packers, a three- Judge Bench of this court, while deciding whether conversion of pineapple f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial difference between the crude oil and conversion in refining oil, whereas here, in the case on hand, the substance is not distinctly getting the change after the process and it is not entirely coming out altogether a different commodity it merely remained as Castor oil, but after process gradation is getting change and therefore, there is a difference in the background of facts and therefore, the said decision delivered by the Hon'ble Supreme Court has no that much bearing. This is because of the fact that in later decisions referred to above almost very similar commodity is dealt with by the Hon'ble Apex Court and held specifically that the process cannot be termed as manufacturing process, and therefore, this decision of 1998 is of no effect to the Revenue. Similarly, in case of M/s. Devi Das Gopal Krishnan reported in AIR 1967 SC 1895 the court was confronted with a different issue related to chargeability and the clarification of the tax. In the said decision, the central issue was pertaining to interpretation of provisions contained under Punjab Central Sales Tax Act, 1948 and while dealing with the validity of the statutory provision contextual reference appears to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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