Mere processing is not manufacture where wood and bamboo retain their identity, defeating input tax credit entitlement.

Debarking and cutting eucalyptus wood and bamboo did not amount to manufacture because the process did not bring into existence a new commercial commodity with a distinct name, character, or use. The U.P. VAT Act definition of manufacture is wide enough to include processing, but mere processing is insufficient where the basic identity of the goods remains unchanged. As no manufacture occurred, the dealer was not entitled to input tax credit under Section 13, and the revision was dismissed.

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Issues: Whether debarking and cutting of eucalyptus wood and bamboo amounts to manufacture so as to entitle the dealer to input tax credit under Section 13 of the U.P. Value Added Tax Act, 2008.

Analysis: The definition of manufacture under Section 2(t) of the U.P. Value Added Tax Act, 2008 is wide enough to include processing, but not every processing activity amounts to manufacture. The decisive test is whether the process brings into existence a new and different commercial commodity having a distinct name, character, or use. Applying that test, the process of debarking and cutting wood and bamboo did not change the basic identity of the goods; the product remained wood and bamboo and no new commercial commodity emerged. The claimed waste or by-product also did not establish entitlement to the benefit claimed under Section 13(3)(b), and the Tribunal's finding that no manufacture had taken place was supported by the record.

Conclusion: The revisionist was not entitled to input tax credit on the footing that its activity amounted to manufacture. The revision was dismissed.

Ratio Decidendi: Mere processing of goods does not constitute manufacture unless it results in emergence of a new commercial commodity with a distinct identity.

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