Wide definition of manufacture covers scrap processing into finished goods, supporting sales tax exemption under the notification.

A wide statutory definition of manufacture can cover processing iron and steel scrap into finished agricultural and household implements through mechanical and thermal processes. On the facts recorded, the activity was not a mere sale of scrap but a manufacturing process within the notification, so raw materials directly used in that process qualified for sales tax exemption. The restrictive view that no new commodity emerged was inconsistent with the breadth of the definition and the actual process carried on, and the exemption benefit followed.

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Issues: Whether the appellant's activity of processing iron and steel scrap into agricultural and household articles amounted to manufacture for the purpose of exemption under the industrial incentive notification.

Analysis: The notification granted sales tax exemption on raw materials directly used in the manufacture of goods by specified industrial units. The relevant statutory definition of manufacture was expansive and covered producing, making, extracting, altering, ornamenting, finishing, and otherwise processing goods. The inspection report showed that the appellant purchased iron and steel scrap, subjected it to mechanical and thermal processes, and produced finished agricultural and household implements. On these facts, the activity was not a mere sale of scrap but a manufacturing process within the broad statutory meaning. The restrictive view taken by the departmental authorities that no new commodity emerged was inconsistent with the width of the definition and the nature of the process actually carried on.

Conclusion: The appellant's activity constituted manufacture and it was entitled to exemption under the notification.

Final Conclusion: The assessment and revisional orders, as affirmed by the High Court, were unsustainable, and the appellant was entitled to the exemption certificate and consequential benefit under the notification.

Ratio Decidendi: Where the statutory definition of manufacture is wide, processing raw material into finished goods through mechanical or other processes is manufacture even if the activity does not involve creation of a wholly distinct commercial commodity.

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