Manufacture requires a commercially distinct new product; cement homogenisation and packing did not qualify for sales tax exemption.

Homogenisation of cement at the Mangalore unit did not amount to manufacture because the process did not produce a commercially distinct new commodity. The court applied the settled test that manufacture requires transformation of the original commodity into a new commercial product; mere processing, improvement in quality, or increased marketability is insufficient. Cement was brought from Gujarat and only homogenised and packed at Mangalore, so the activity remained ancillary to finished cement rather than a manufacturing process. The claimed sales tax exemption under the industrial incentive notification was therefore not available.

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Issues: Whether homogenisation of cement at the Mangalore unit amounted to manufacture so as to qualify the petitioner for sales tax exemption under the industrial incentive notification.

Analysis: The governing test for manufacture is whether, by one or more processes, the original commodity is transformed into a commercially new and distinct commodity. Mere processing, improvement in quality, or enhancement in marketability does not by itself constitute manufacture. On the admitted facts, cement manufactured at Gujarat was brought to Mangalore and subjected only to homogenisation and packing. No new commercial product emerged at Mangalore, and the activity remained a process ancillary to the finished cement, not a manufacturing activity. The claim that better quality or greater saleability made the process manufacture was rejected, as value addition alone is insufficient.

Conclusion: Homogenisation at Mangalore did not amount to manufacture, and the petitioner was not entitled to the claimed exemption.

Ratio Decidendi: A process amounts to manufacture only when it results in a commercially distinct and new commodity; mere improvement in quality, marketability, or value does not satisfy that test.

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