Manufacture of iron and steel by rolling ingots into plates qualifies for higher development rebate under the Income-tax Act.

Conversion of purchased ingots into iron plates was treated as manufacture of iron and steel (metal), not merely processing of a finished product. The relevant principle was that goods obtained from ingots or billets in rolling operations remain forms of iron and steel, even if later usable as raw material for other articles. On that basis, the activity fell within item No. 1 of the Fifth Schedule to the Income-tax Act, 1961, and satisfied the statutory condition for the higher development rebate. The assessee was therefore entitled to development rebate at 25 per cent under section 33(1)(b)(B)(i).

---

---

Issues: Whether the assessee, manufacturing iron plates from purchased ingots, was engaged in the manufacture of iron and steel (metal) within item No. 1 of the Fifth Schedule to the Income-tax Act, 1961, and thereby entitled to development rebate at the higher rate of 25 per cent under section 33(1)(b)(B)(i) of the Act.

Analysis: The assessee's activity consisted of converting ingots purchased from the market into iron plates. The decisive question was whether such conversion amounted to manufacture of iron and steel (metal) or merely to processing of a finished metal product. The ruling applied the principle that products obtained from ingots or billets in rolling operations remain finished forms of the metal and do not cease to be iron and steel merely because they are later usable as raw material for other iron and steel articles. On that basis, the manufacturing activity was treated as falling within the relevant entry in the Fifth Schedule, and the statutory condition for the higher rate of development rebate was satisfied.

Conclusion: The assessee was held to be manufacturing iron and steel (metal) within item No. 1 of the Fifth Schedule to the Income-tax Act, 1961, and was entitled to development rebate at 25 per cent under section 33(1)(b)(B)(i).

Ratio Decidendi: Conversion of purchased ingots into rolled iron products amounts to manufacture of iron and steel (metal) for the purpose of the relevant incentive provision, so as to qualify for the higher development rebate prescribed by the Act.

---