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19. In view of the above discussion, we are of the clear opinion that the benefit of section 80HH is available to industrial undertakings which "manufacture or produce articles". Industrial undertakings engaged in "processing of goods or articles" not amounting to "manufacture or production" are not entitled to the benefit of this section.

20. So far as second aspect as to whether processing of prawns amounts to manufacture is concerned, we find that the decision of the Supreme Court in Sterling Foods v. State of Karnataka [1986] 63 STC 239 is a complete answer. In that case, the Supreme Court was required to consider whether shrimps, prawns and lobsters, when subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, retain their original character and identity or become another distinct commodity. The Supreme Court observed that the test which has to be applied for the purpose of determining whether a commodity subjected to processing retains its original character and identity is as to whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded, commercially and in the trade, the same as the original commodity. It is necessary to point out that it is not every processing that brings about change in the character and identity of a commodity. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps different kinds of processing at each stage. With each process suffered, the original commodity experiences change. But it is only when the change the change or a series or change series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead recognised as a new and distinct commodity that it can be said that a new commodity, distinct from the original, has come into being. The test is whether in the eyes of those dealing in the commodity or in commercial parlance the processed commodity is regarded as distinct in character and identity from the original commodity.

21. Applying the above test, it was held by the Supreme Court in Sterling Foods' case [1986] 63 STC 239 that processed or frozen shrimps, prawns and lobsters are commercially regarded as the same commodity as raw shrimps, prawns and lobsters. When raw shrimps, prawns and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, then do not cease to be shrimps, prawns and lobsters had 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 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 shrimps, prawns and lobsters to a certain degree of processing but even so they continue to possess their original character and identity as shrimps, prawns and lobsters notwithstanding the removal of heads and tails, peeling, deveining and cleaning which are necessary for making them fir for the table. Equally it makes no difference in character or identity when shrimps, prawns and lobsters are frozen for the purpose of preservation and transfer to other places including far off countries in the world. There can, therefore, be no doubt that processed or frozen shrimps, prawns and lobsters are not a new and distinct commodity but they retain the same character and identity as the original shrimps, prawns and lobsters. In that view of the matter, it is clear that "processing of prawns" for making them fit for the market is not a process of manufacture. No manufacture of articles or prawns takes place as a result of the process undertaken by the assessee.