Functional classification of machinery and works determined extra shift allowance and depreciation eligibility for cycle parts manufacture.

Extra shift allowance was allowed for wiring used to energise electrical machinery because it did not fall within the depreciation entry for wiring and fittings of electric light and fan installations. The relevant classification depended on the actual function of the wiring, and the assessee succeeded on this issue. Cycle manufacture works was held to include not only manufacture of complete cycles but also manufacture of substantial cycle parts, such as rims and wheels. On that basis, the general machinery used for that activity qualified for depreciation at the applicable rate, and the assessee again succeeded.

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Issues: (i) Whether the assessee was entitled to extra shift allowance in respect of wiring and fittings of electric machinery; (ii) Whether the manufacture of rims and wheels for cycles fell under the head "Cycle manufacture works" so as to attract depreciation at 10% on the general machinery used therefor.

Issue (i): Whether the assessee was entitled to extra shift allowance in respect of wiring and fittings of electric machinery.

Analysis: The wiring was used for energising electrical machinery and did not relate to wiring and fittings of electric light and fan installations. The relevant item in the depreciation schedule dealing with light and fan installations therefore had no application.

Conclusion: The assessee was entitled to extra shift allowance and the answer was in favour of the assessee.

Issue (ii): Whether the manufacture of rims and wheels for cycles fell under the head "Cycle manufacture works" so as to attract depreciation at 10% on the general machinery used therefor.

Analysis: The expression "cycle manufacture works" was capable of covering not only manufacture of the whole cycle but also manufacture of substantial parts of cycles. Since rims and wheels are substantial cycle components and cycle parts are commonly manufactured separately, the assessee's works could properly be so treated.

Conclusion: The manufacture of rims and wheels for cycles fell within "Cycle manufacture works" and the answer was in favour of the assessee.

Final Conclusion: Both referred questions were answered in favour of the assessee, and the department was directed to bear the costs.

Ratio Decidendi: For extra shift allowance and depreciation classification, the relevant entry must be applied according to the actual function and character of the machinery or works, and a manufacture of substantial cycle parts may qualify as cycle manufacture works.

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