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Issues: Whether the assessee was mainly engaged in the manufacture or processing of goods and therefore constituted an industrial company within the meaning of section 2(8)(c) of the Finance Act, 1974.
Analysis: The assessee had an arrangement under which goods were manufactured for and on its behalf under its supervision and control, with the right to inspect the manufacturing process, supply moulds and equipment, and take over work-in-progress. The absence of a factory or ownership of plant and machinery was held to be immaterial where the manufacturing activity was that of the assessee. The Finance Act definition could not be curtailed by importing the requirements of the Industries (Development and Regulation) Act, 1951, and the lack of an industrial licence under that Act did not negate the assessee's status under the Finance Act. The agreement, the admitted documents, the excise and cost-audit materials, and the earlier decisions on manufacture through another entity under supervision all supported the view that the assessee was engaged in manufacture.
Conclusion: The assessee was an industrial company under section 2(8)(c) of the Finance Act, 1974 and was entitled to the concessional tax treatment.
Ratio Decidendi: A company is engaged in manufacture for purposes of the Finance Act if goods are produced for it under its direct supervision and control, even though the actual manufacturing is carried out by another entity and the company does not own the factory or machinery.
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