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3. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals). The Commissioner was of the view that the word manufacture has not been defined in the Act. Therefore, the word is to be understood on the basis of the observation made in this regard in various judicial pronouncements. The process of manufacture should result in a commercially different commodities/different article with a different commercial identity, when compared with the input that are subjected to manufacturing process. In the instant case, the assessee is installing air-conditioning system as per the requirements of various companies. It is not the case of the assessee that it has manufactured the air- conditioning system and intalled the same. Therefore it dismissed the appeal.

473).

`Manufacture' is a transformation of an article, which is commercially different from the one, which is converted. The essence of manufacture is the change of one object to another for the purpose of making it marketable. The essential point thus is that, in manufacture something is brought into

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existence, which is different from that, which originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case of processing it is not necessary to produce a commercially different article. (See M/s. Saraswati Sugar Mills and others v. Haryana State Board and others (1992 (1) SCC 418).

        To    put    it   differently,     the     test    to
determine      whether        a     particular     activity
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amounts to `manufacture' or not is: Does a new and different good emerge having distinctive name, use and character. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes `manufacture' takes place and liability to duty is attracted. Etymologically the word `manufacture' properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view, is a question depending upon the facts and circumstances of the case. (See Empire Industries Ltd. v. Union of India (1985 (3) SCC 314).

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making it marketable. The essential point thus is that in manufacture something is brought into existence, which is different from that which originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case of processing it is not necessary to produce a commercially different article. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether it be the result of one process or several processes "manufacture" takes place and liability to duty is attracted. Etymologically the word `manufacture' properly construed would doubtless cover the transformation.