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TMI Blog2012 (10) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... s a manufacturing activity and income derived from such activity was thus eligible for deduction u/s 80IA/80IB of the Income Tax Act, 1961? (ii) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in relying on the judgment of Hon'ble Supreme Court in the case of M/s. Lucky Minmat Pvt. Ltd. v. CIT [2000] 245 ITR 830 wherein only an observation has been made by the Hon'ble Court to the effect that conversion into lime and lime dust or concrete by stone crushers could be considered to be a manufacturing process without considering the subsequent decision and not relying on the decision of the Hon'ble Supreme Court in the case of M/s. Sacs Eagle Chicory v. CIT [2000] 255 ITR 178 (SC) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity. They are in common parlance known as shrimps, prawns and lobsters. There is no essential difference between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters. The dealer and the consumer regard both as shrimps, prawns and lobsters. The only difference is that processed shrimps, prawns and lobsters are ready for the table while raw shrimps, prawns and lobsters are not, but still both are, in commercial parlance, shrimps, prawns and lobsters. It is undoubtedly true that processed shrimps, prawns and lobsters are the result of subjecting raw shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry powder is chicory in powder form and nothing else. Mere change in the form of the same commodity does not necessarily involve change of identity. The pineapple fruit when plucked from the tree and even after it is cut into pineapple slices retains the same identity as pineapple. Chicory powder and chicory root have the common identity of being chicory. The change in the form to powder in the case of chicory and to slices in the case of pineapple does not result in a change of identity." 7. It would be pertinent to mention here that this decision of the Madras High Court was upheld by the Apex Court in Sacs Eagles Chicory v. CIT [2002] 255 ITR 178 (SC). 8. In Indian Hotels Co. Ltd. v. ITO [2000] 245 ITR 538 (SC), the Apex Court aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d coffee went through nine processes. Firstly the coffee was dried in the sunlight. Then the outer husk of the coffee been was removed, if necessary, by mechanical operation. The coffee seeds were then extracted and polishing was done. Thereafter, gradation was done where the good coffee was separated by mechanical as well as manual grading. The Court held that net product is absolutely different and separate from the input. The Apex Court held as follows:- "Adverting to facts of the present case, the assessee after plucking or receiving the raw coffee berries makes it undergo nine processes to give it the shape of coffee beans. The net product is absolutely different and separate from the input. The change made in the article result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere mining of limestone and marble and cutting the same before it was sold in the market could not be so considered." 12. According to Sh. Vinay Kuthiala, learned senior counsel for the revenue, this observation is only obiter dicta and is not the ratio of the decision and the question whether an activity amounts to manufacture or not is to be decided in the facts of each case. 13. As far as conversion of limestone into limestone powder is concerned, The Apex Court has clearly held that the conversion into lime and lime dust or concrete by stone crushers can legitimately be considered to be a manufacturing process while the mere mining of limestone and marble and cutting the same would not be so considered. The observation of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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