Production includes manufacture for exemption relief where bran cutting machinery creates marketable fine bran.

The exemption notification for machinery used in the production of a commodity was held applicable to a bran cutting machine. The machine was used in the manufacturing process to convert coarse bran into fine bran, which was sold as cattle feed and treated as a marketable product. The distinction between manufacture and production was rejected because production was considered broad enough to include manufacture. The view that coarse bran and fine bran were not different commodities was also rejected, and the machine was accepted as used in producing a commodity. Exemption benefit was therefore admissible.

---

---

Issues: Whether the imported bran cutting machine was entitled to the benefit of the exemption notification as machinery used for production of a commodity.

Analysis: The notification granted relief to machinery used in the production of a commodity, and the disputed machine was classified under the relevant tariff sub-heading. The appellants showed that the machine was used in their manufacturing process to convert coarse bran into fine bran, which was sold as cattle feed and on which sales tax was paid. The distinction drawn by the lower authority between manufacture and production was rejected, since production is wide enough to include manufacture. The reasoning that coarse bran and fine bran were not different commodities was also not accepted, because the fine bran was treated in commerce as a marketable product arising from the machine's operation.

Conclusion: The machine was held to be used in the production of a commodity and the exemption benefit was admissible to the assessee.

---