Stone cutting into trade-distinct pieces can amount to manufacture where commercial identity changes under an inclusive definition.

Excavating stone blocks and cutting or dressing them into smaller pieces of definite dimensions was held to amount to manufacture under the inclusive statutory definition. The decisive test applied was whether the process brought into existence a commodity with a different name, character or commercial identity in common trade parlance. Because the excavated blocks and the cut slabs or pieces were known differently in trade, the process was treated as more than mere size reduction. The assessee was therefore entitled to the benefit of the notification shifting the point of tax, and the levy based on rejection of declaration forms was not justified.

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Issues: Whether excavating stones from mines and cutting or dressing them into specified sizes amounts to manufacture so as to entitle the assessee to the benefit of the notification shifting the point of tax.

Analysis: The definition of manufacture under section 2(k) was treated as inclusive and not exhaustive. The decisive test was whether the process brought into existence a commodity different in name, character or commercial identity, as understood in common and commercial parlance. On the facts, the stones were excavated as big blocks and then cut into smaller pieces with definite length, breadth and thickness. This was held to be more than a mere reduction in size, because the blocks and the cut slabs or pieces acquired a different commercial identity and were known differently in trade.

Conclusion: The process amounted to manufacture. The assessee was entitled to treat itself as a manufacturer and the levy based on rejection of the declaration forms was not justified.

Final Conclusion: The revision failed and the Tribunal's order sustaining the assessee's position under the notification was upheld.

Ratio Decidendi: A process that converts excavated stone blocks into cut pieces or slabs of definite dimensions, bringing about a distinct commercial identity in trade, constitutes manufacture within an inclusive statutory definition.

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