Mere steel scrap from cutting operations is not manufacture and is not separately liable to entry tax.

Steel scrap and side cuttings generated from slitting and cutting steel sheets, tubes, rolls and coils were treated as mere remnants of the original goods, not as a new and distinct commercial commodity. Manufacture requires emergence of a product with a separate identity, and the process here did not meet that test. Because the underlying steel goods had already suffered entry tax, the scrap could not be treated as independent local goods again liable to entry tax. The reference was answered against the Revenue and in favour of the assessee.

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Issues: Whether steel scrap and side cuttings generated from slitting and cutting of steel sheets, tubes, rolls and coils amounted to manufacture and could be treated as local goods exigible to entry tax under the relevant entry tax provisions.

Analysis: The goods purchased by the dealer had already suffered entry tax. The material sold to the assessee consisted only of remnants, scraps or by-products arising from cutting and utilisation of the original steel goods. No new and independent commercial commodity emerged from that process. Manufacture requires the emergence of a product with a distinct identity, and mere reduction of the original goods into scrap does not satisfy that test. Since the scrap was only the residue of goods that had already borne entry tax, it could not be treated as an independent local good liable to another levy.

Conclusion: The scrap was not manufactured goods and was not separately exigible to entry tax as local goods. The reference was answered against the Revenue and in favour of the assessee.

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