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TMI Blog2001 (8) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a process which was akin to manufacture resulting in the production of commercially a new commodity different from the old and worn out castings' and is not the above finding wrong and unreasonable in law and fact? 3. Whether, on the facts and in the circumstances of the case and also in view of the fact that no new article or thing with a substantially changed identity of a product is emerged from the preretreaded tyre, the Tribunal is right in law and fact in holding that 'even if retreading does not amount to manufacture, it amounts to production' and is not the above finding wrong and unreasonable? 4. Whether, on the facts and in the circumstances of the case, does retreading amount to production of an article or thing?" The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new commodity and it can be used and sold as a new commodity. He further contended that the word "manufacture" in section 80-I should be given the same meaning as was given to the word in Explanation (iii) to section 10A of the Act. Before we go into that question, we shall discuss the relevant provisions of section 80-1 of the Act as it stood at that time. '80-I. Deduction in respect of profits and gains from industrial undertakings after a certain date, etc.-(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, or the business of repairs to ocean-going vessels or other powered craft, to which this section applies, there shall, in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of retreading tyres was an industrial company. In considering this question, Ranganathan J. (as he then was), speaking for the Bench, held as follows: "The assessee employed certain industrial processes to worn out tyres and gave it a new lease of life and the process, though not equivalent to the manufacture of a new tyre, stopped very little short of it. The nature of the activity of the assessee, which was processing, was akin to an industrial or manufacturing activity. Further, for all practical purposes and in the commercial sense of the term, the retreaded tyres were almost a new article and they were separately sold in the market in the same way as newly manufactured tyres. Therefore, the assessee was an industrial company as def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no longer be regarded as the original commodity but is recognised in the trade as a new and distinct commodity. Pathak J., as he then was, stated the test in the following words: 'Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomobile and marine engines. In that case, the Tribunal held that the activity of Popular Garage clearly amounts to processing of the engine as a result of which an engine which had become unusable becomes usable and gets a new lease of life, that it is entirely different from the repairing activities carried on in a workshop and the work required a high degree of skill and precision. It was finally held that the work cannot be equated with the replacement of worn out parts of an automobile or repairing of the same. But in that case the court was of the view that the matter requires further information on facts and hence, it was remanded to the Tribunal. It cannot also come within the word "produce". According to Ramanatha Iyer's Law Lexico ..... X X X X Extracts X X X X X X X X Extracts X X X X
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