9911796707
TMI Blog1994 (11) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... or plant was installed or, if the ship, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, a sum by way of development rebate as specified in clause (b) in respect of a new ship or new machinery or plant which is owned by the assessee and is wholly used for the purposes of the business carried on by him. It is not in dispute that all particulars as contemplated under section 33(1) and (2) were furnished by the assessee for the assessment year 1975-76 and it claimed development rebate deduction at 25 per cent. of the cost of the machinery which it had set up for the manufacture of steel castings at a cost of Rs. 41,41,784. The Income-tax Officer as well as the Appellate Commissioner and the Tribunal have held on the facts of this case that entry 11 of the Fifth Schedule to the Act was attracted and while the Income-tax Officer has held that on the phraseology of the entry, "steel castings and forgings and malleable iron and steel castings", development rebate could not be given to the assessee as the new machines were for manufacturing steel castings and not for steel castings and forgings or malleable iron an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in Indian Steel and Wire Products Ltd. v. CIT [1977] 108 ITR 802, and the Allahabad High Court, in CIT v. Kay CharAn P. Ltd. [1991] 190 ITR 190, have answered the question in the negative and against the assessee. On the other hand, the Kerala High Court, in CIT v. Mittal Steel Re-rolling and Allied Industries P. Ltd. [1977] 108 ITR 207 and CIT v. West India Steel Co. Ltd. [1977] 108 ITR 601 [FB], the Madras High Court, in the judgment under appeal, reported as CIT (Addl.) v. Trichy Steel Rolling Mills Ltd. [1979] 118 ITR 39, the Punjab and Haryana High Court, in CIT v. Krishna Copper and Steel Rolling Mills [1979] 119 ITR 256 (here under appeal) and CIT v. Ludhiana Steel Rolling Mills [1989] 180 ITR 155 (P & H) and the Allahabad High Court, in Singh Engineering Works P. Ltd. v. CIT [1979] 119 ITR 891, have taken a view in favour of the assessee. This controversy needs to be resolved." The Supreme Court in this judgment, referred to three of its earlier judgments in State of Madhya Bharat v. Hiralal [1966] 17 STC 313, Devi Dass Gopal Krishnan v. State of Punjab [1967] 20 STC 430 and Hindustan Aluminium Corporation Ltd. v. State of U. P. [1981] 48 STC 411 to indicate tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture or production of articles of iron and steel and also mean, particularly when used in the plural, the articles produced by the process (vide : Glossary of Terms published by the Bureau of Indian Standards and relating to Iron and Steel : Part VI, 'Forging'). Item No. 21 which refers to 'seamless tubes' also furnishes a similar indication. There is, therefore, a distinction between the article or thing referred to in the Schedule as 'iron and steel (metal)' and articles or things manufactured from 'iron and steel'. Secondly, the decision in State of Madhya Bharat v. Hiralal [1966] 17 STC 313 (SC), shows that even the expression 'iron and steel'--which is wider than the expression we are concerned with, as it is not further qualified by the word 'metal' --was held to mean iron and steel used as raw material for the manufacture of other goods. The court held that bars, flats and plates only represented such raw material in attractive and acceptable forms. Sri Gauri Shankar, for the Revenue, contended that the use of the appellation 'metal' in the entry we are concerned with further restricts the nature of the qualifying industry but we are not inclined to agree. Obv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut also the production of bars and rods are eligible for the higher development rebate, it is difficult to see why the same plant and machinery, when installed in rolling mills which proceed from the stage of ingots or billets to manufacture of bars and rods should not be eligible for the higher rate of development rebate. In considering the issue before us, we should not be carried away by classifications of stages of manufacture that may be relevant for other purposes. We would like to emphasise, at the cost of repetition, that what we should examine is not the nature of the mill which yields the article but the nature of the article or thing that is manufactured and ask ourselves the question whether such article or thing can be considered as raw material for manufacture of other articles made of the metal or is it itself an article made of the metal. On this issue, our view is, as we have already stated, that the goods in the present case fall in the former category. We think that Sri Ramachandran is right in pointing out that the mild steel rods, bars or rounds which are manufactured by the assessees here are only finished forms of the metal and not articles made of iron and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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