Manufacture test for finished leather: repeated processing can create a distinct commercial commodity and support concessional tax treatment.

Conversion of wet blue leather into finished leather is treated as manufacture where successive processes produce a commercially distinct commodity with a new identity, name and use in trade. The analysis applies the settled test that manufacture exists when the end product is different from the input in commercial parlance, even if both goods fall within a broad tariff description. The article notes that splitting, shaving, washing, rechroming, neutralisation, retanning, dyeing, drying, staking, trimming, buffing, dedusting and finishing materially alter the article, so the concession under Section 3(3) of the Tamil Nadu General Sales Tax Act is available.

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Issues: Whether the process of converting wet blue leather into finished leather amounts to manufacture for the purpose of concessional tax under Section 3(3) of the Tamil Nadu General Sales Tax Act.

Analysis: The conversion of wet blue leather into finished leather involves multiple successive processes, including splitting, shaving, washing, rechroming, neutralisation, retanning, dyeing, drying, staking, trimming, buffing, dedusting and finishing. Applying the settled test of manufacture, the decisive question is whether the end product is commercially different from the input and is recognised in the trade as a new and distinct commodity. The material on record showed that finished leather is not the same commodity as wet blue leather, that each stage materially changes the article, and that the final product has a distinct identity, name and use in the market. The tariff entry describing both as dressed hides and skins does not answer the separate question whether manufacture has occurred.

Conclusion: The conversion of wet blue leather into finished leather amounts to manufacture, and the assessee was entitled to claim the concession.

Ratio Decidendi: Manufacture takes place when a series of processes bring into existence a commercially distinct and newly recognised commodity, even if the goods continue to fall within a broad tariff description.

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