Mining and cutting limestone or marble is not manufacture when no transformation into a new product occurs

Mining limestone and marble blocks, followed only by cutting and sizing them before sale, did not amount to manufacture or production for relief under section 80HH of the Income-tax Act. The Supreme Court distinguished cases where stone is transformed into lime, lime dust or concrete through a manufacturing process, holding that mere extraction and sizing do not create a new product with a different character. On that basis, the activity fell outside the statutory requirement for industrial relief.

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Issues: Whether the assessee's activity of mining limestone and marble blocks and thereafter cutting and sizing them amounted to manufacture or production so as to qualify for relief under section 80HH of the Income-tax Act, 1961.

Analysis: The assessee's case was distinguished from the earlier decision relied upon by it because the present facts involved only mining of limestone and marble and their cutting and sizing before sale. Conversion of limestone into lime, lime dust or concrete by stone crushers could amount to a manufacturing process, but mere mining followed by cutting and sizing did not bring about such a transformation.

Conclusion: The assessee's activity was not manufacture or production and it was not entitled to relief under section 80HH.

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