Manufacture versus processing: converting tobacco into bidi is manufacture, so market fee is not attracted.

Converting processed tobacco into bidi is treated as manufacture rather than processing under the M.P. Krishi Upaj Mandi Adhiniyam, 1972, because the activity produces a different and distinct commercial commodity. The statutory concept of processing is confined to treatments such as powdering, crushing, husking, parboiling, polishing, ginning, pressing, curing, or similar treatment before final consumption. Where tobacco is brought into the market area as processed tobacco and used only as raw material for bidi, the sale does not attract market fee on the basis of processing. The activity is therefore outside the fee levy applied to processed notified agricultural produce.

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Issues: Whether converting processed tobacco into bidi amounts to manufacture or processing, and whether such activity attracts market fee under the M.P. Krishi Upaj Mandi Adhiniyam, 1972.

Analysis: The charging provision permits levy of market fee on sale of notified agricultural produce within the market area and on notified agricultural produce when it is used for processing. The statutory definition of processing covers treatments such as powdering, crushing, husking, parboiling, polishing, ginning, pressing, curing or any similar treatment before final consumption. On the admitted facts, the tobacco was brought into the market area as processed tobacco and was used only as raw material for making bidi. The activity did not involve any of the statutory processes and resulted in a different and distinct commercial commodity. Applying the distinction between processing and manufacture, the end product was not commercially the same as tobacco.

Conclusion: The activity of preparing bidi from tobacco amounts to manufacture and not processing. The petitioner was therefore not liable to market fee under the Act.

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