TaxTMI 
TaxTMI 
2000 (2) TMI 227
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....hat the learned authorities below are not justified in holding that the assessee is not engaged in any manufacturing process and thereby disallowing the claim of the assessee under section 80-I of the Income-tax Act, 1961. Before the authorities below the assessee gave details of process involved in the manufacture of above sugar which are given as under : "The main raw material is sugar purchase mostly from sugar co-operative mills. The sugar is mixed with water and melted in the filter unit. The filtered melt is transferred to the rotary belt where semi finished goods in the form of seeds are added to the melt. The rotational processing in rotary pan results in crystallisation of the seeds which are then stored in crystalliser and then cured in centrifugal machine in which crystals are separated from the sugar liquid. Afterwards, the crystals are dried and graded on hopper and packed in bags for sale. The separated sugar liquid is recycled again the process above. During the grading the crystals of desired size are separated for sale as candy sugar and remaining crystals of uneven size are recycled in the process as semi-finished goods (seeds). The crystals of fine size ....
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....not possible to say that one commodity has been consumed in the manufacture of another although it has undergone a degree of processing it must be regarded as still retaining the original identity." Applying the test laid down by various Courts as mentioned above, the Assessing Officer held that making of sugar candy with the help of plant and machinery does not result into manufacture of a commodity which is different from one which is fed into the plant for melting washing and segregating different sizes and that the plant and machinery has been used by the assessee for the purpose of removing the impurities, cleaning and giving different sizes to the sugar and in the process original commodity continues to retain its substantial identity. Hence, according to the Assessing Officer there is no transformation into a new and different article. The Assessing Officer also relied upon the decision of the Vasantha & Co. v. State of Madras [1963] 14 STC 696 to 701 (Mad.). In that case, the assessee was dealer in sugar and the question before the Hon'ble Court was whether sugar candy is different from sugar and exempt from payment of sales tax. In that case, after considering various f....
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....p; 26-5-1997 (iii) - do - 9-6-1997 (iv) - do - 16-6-1997 (v) - do - 19-6-1997 (vi) Written submission date 11-8-1997 (vii) - do - 21-8-1997 After discussing the entire material placed before him and ....
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....rough a complicated process and at the end of the day what is obtained is candy sugar which is distinct commercial identity and distinct use. The commodity obtained is recognised as such i.e., distinct commodity by commercial circles. The commodity so obtained has a different use. There is a value addition to the commodity and further Bura sugar is a bye-product and that itself shows that after the whole process what emerges is a distinct commercial commodity. To explain further, he relied upon a certificate of Dr. Arivind Lali from UDCT, Bombay, in respect of manufacture (pages 41 and 42 of the paper book), the certificate from Vasantdada Sugar Institute regarding distinct chemical composition (page 53F of the paper book) and a note on manufacture of candy sugar (pages 53G - 53H). In proof that the end product is a distinct commercial commodity and has a distinct use, the learned counsel relied upon the certificate from customers (pages 53A - 53E of the paper book). The learned counsel relying upon the above technical information submitted that the authorities below failed to apply the prime test to decide the issue i.e. distinct commercial identity and different use and erred in ....
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....o the learned counsel, the authorities below totally overlooked the fact regarding excisability of the assessee firm's end-products i.e. Candy sugar, P.G. sugar etc. manufactured out of sugar on the basis of erroneous presumption. In support of his contentions, the learned counsel relied upon the following authorities. (a) CIT v. Tata Locomotive & Engg. Co. Ltd. [1968] 68 ITR 325 (Bom.)- The word 'manufacture' has a wider and also a narrower connotation. Assembling motor vehicles from 'complete knocked down' packs imported from West Germany were held manufactured vehicles. (b) CIT v. Kum. Satya Setia [1983] 143 ITR 486/15 Taxman 345 (MP)- The Appellate Tribunal is the final fact finding authority under the scheme of Income-tax Act. It has discretion to take additional evidence. (c) CIT v. Tiecicon (P.) Ltd. [1987] 168 ITR 744 (SC) - Supplying cool, filtered and chilled air through air-conditioning apparatus is a manufacturing activity. (d) East India Hotels Ltd.'s case --- Catering unit of the assessee supplying eatables in bulk to the international airlines for consumption of the air passengers is entitled to deduction under section 80-I. (e) Empire Industries Ltd. ....
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....ssed the appeal against the disallowance against the deduction under section 80-I itself on account of illogical and unjustifiable grounds. 7. Shri Hari Krishan, the learned Departmental Representative strongly supported the orders of the authorities below. He filed before us paper book containing 32 pages. Explaining the process undertaken by the assessee as given in the orders of the authorities below and further explained by the learned counsel for the assessee, the learned D.R. submitted that from the same it was clear that the entire procedure only involves mixing of water with sugar, boiling, cleaning i.e., removing the bura sugar and obtaining purer form of sugar in the desired size. The process of washing, cleaning and purifying an item and obtaining it in the desired size does not amount to manufacture. In support of this contention, he relied upon the decision of the Karnataka High Court in the case of V.M. Salgaocar Bros. (P.) Ltd. v. CIT [1996] 217 ITR 849/85 Taxman 106. He further relied upon the judgment in the case of K.M. Natrajan 48 STC 315 where the High Court had held that conversion of white ash into sacred ash by cleaning and adding perfumes does not amount ....
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....hari Sons (P.) Ltd. [1983] 144 ITR 12/14 Taxman 229 (Mad.) Dy. CIT v. Nagarjuna Investment Trust Ltd. [1998] 65 ITD 17, 58 (Hyd.) (SB) and 94 Taxman 159 (SC)(sic) According to the learned D.R., the Supreme Court in the case of Sakarwala Bros. has already clarified that sugar covers candy sugar and both these items can be put to same use as sugar. There is no need of favourable interpretation if there is no ambiguity. In support of this contention, the learned D.R. relied upon the decision in CIT v. T. V. Sundaram Iyengar & Sons (P.) Ltd. [1975] 101 ITR 764 (SC). To the contention of the learned counsel that the candy sugar is subject to Excise duty, the learned D.R. submitted that the mere fact that the assessee is paying excise duty on conversion of sugar into candy sugar will have no bearing on the interpretation whether or not the process is manufacturing. The excise duty levied on the assessee is for the Act of converting sugar into candy sugar and not for the reasons that the activity involved is manufacturing. He further submitted that lacuna if any in excise law cannot be allowed to be exploited by the assessee to get a favourable order from the authorities implementing t....
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....ly a purer form of sugar; (b) sugar includes candy sugar; (c) to arrive at its conclusion the Hon'ble Court has considered the opinion of National Institute of Sugar Kanpur, a Government Institute. Sakarwala Bros' case (a) The term sugar covers 'Patasa', Harda and Illaichidana' (b) Illaichidana, Patasa and harda can be put to same use as sugar. Where activities similar to that of assessee have been held to be not manufacture : 1. Rasoi Products v. CTO [1982] 51 STC 248 (Cal.) and 31 STC 628 (Cal.), Powdering of Turmeric and Pepper into Turmeric and Pepper powder. 2. Mahabirprasad Birthiwala v. State of West Bengal [1973] 30 STC 57 (Mad.) Burning of coal into cylinder. 3. State v. B. Raghurama Shetty [1975] 35 STC 360 (Kar.), Obtaining rice from paddy. 4. Salco Extrusions (P.) Ltd. v. Collector of Central Excise 1984 (16) ELT 356 (Delhi - Trib.) (SB), Converting aluminium waste (scrap) into aluminium ingots; 5. Punjab Industries v. Collector of Central Excise 1989 (43) ELT 314 (Delhi - Trib.) (SB), Obtaining coal briqueltes from coal dust by mixing mollases in it. 6. Collector of Central Excise v. Anil Chemicals (P.) Ltd. 1985 (21) ELT 889 (Delhi ....
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....ed to extend the benefit of deduction under section 80-I only to the 'industrial undertakings which manufacture or produce articles'. This section was not intended to be applied to industrial undertakings which are engaged in 'processing of goods' not amounting to manufacture of production of articles. Sugar is the be all and end all of assessee's process. The assessee starts with sugar and at the end of the day ends with the sugar though in a purer form. From the details of the processes involved as stated by the lower authorities and as further elaborated by the learned counsel for the assessee with the help of photographs, it is clear that the assessee is involved in a process but not in manufacturing process. What amounts to manufacture has been defined in paragraph from an American judgment which has been quoted by approval by various judgments of the Hon'ble Supreme Court as also in the case of Delhi Cloth & General Mills Co. Ltd. The paragraph quoted in para 14 on page 795 of the report reads as follows : "Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something ....
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....ces from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it. It is contended for the revenue that pineapple slices have a higher price in the market than the original fruit and that implies that the slices constitute a different commercial commodity. The higher price, it seems to us, is occasioned only because of the labour put into making the fruit more readily consumable and because of the can employed to contain it. It is not as if the higher price is claimed because it is a different commercial commodity. It is said that pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit. Here again, the distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired... There is no essential difference between pineapple fruit and the canned pineapple slices. The dealer and the consumer regard both as pineappl....
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....thing else. What is obtained after cleaning is the purer substance. Accordingly, after cleaning/ purification of the sugar by removing dust and brown sugar, which is a kind of impurity, what has been removed was not sugar but something else and candy sugar which has been obtained is only a purer form of the sugar i.e. the original substance. At page No. 833 the Hon'ble Supreme Court has held that process of removal of impurities does not render groundnut oil any the less. On the same analogy, we hold that the process of removal of impurities to obtain candy sugar does not render sugar any the less sugar. The Hon'ble Supreme Court has further held that even hydrogenation of oil does not amount to manufacture. At page 835 the Hon'ble Supreme Court has held that there is no use to which the groundnut oil can be put for which the hydrogenated oil could not be used, nor is where any use to which the hydrogenated oil could be put for which the raw oil could not be used. Similar is the position as regard to sugar and sugar candy. It is a well known fact that various sugar mills in the country make sugar of different sizes with different purity but all kinds of sugar can be put to same pur....
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...., it may be stated that the word 'candy' in this case is only an adjective which qualifies the word sugar and only indicates that candy sugar is another form of sugar. Even otherwise, the Hon'ble Supreme Court in the case of Titaghur Paper Mills Co. Ltd. quoted by the Calcutta High Court in S.B. Cold Storage Industries (P.) Ltd.'s case at page 654 has held that merely because certain articles are known by different names it does not mean that they are different commercial commodities if in fact they are merely different forms of the same commodity. The Hon'ble Bombay High Court in the case of CST v. Dunken Coffee Mfg. Co. [1975] 35 STC 493 has held that mere change in the name of commodity will not amount to manufacture. Although in that particular case the activity of amalgamating coffee powder with chicory powder in equal proportion to obtain 'Fresh Coffee' was held to be a manufacture as there was a transformation of two inputs, yet the decision arrived was not based on the fact that the output had different name as French Coffee from the original product known as Coffee. 16. Coming to the arguments of the learned counsel that the candy sugar is subjected to excise duty and i....
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....plain and simple language used in the enactment. It will not be reasonable or permissible for the Court to re-write the section or substitute the words on its own for the actual words employed by the legislature in the name of giving effect to the supposed underlying object. The meaning of 'manufacture' and 'production of articles or things' would have to be considered in their ordinary, plain and natural meaning. When raw-sugar is washed and cleaned and converted into candy sugar what is obtained is the sugar in purer form. Hence, it could be doing violence to the language if it is said that while sugar is being converted into candy sugar, in effect an article or thing is being manufactured or produced. 18A. One star argument put by the learned counsel was that candy sugar is used by pharmaceutical companies and hence its use is different from ordinary sugar. Reliance was placed on the letters procured from some pharmaceutical companies of the country. We do not find any merit in this argument. No doubt, pharmaceutical companies do purchase candy sugar from the assessee, but such companies also use the same for sugar coating of pills etc. or for sweetening the bitter medicines.....
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..... On appeal, the CIT(A) confirmed the finding of the Assessing Officer observing as under : "For any expenditure to be allowed under section 37 it is not only necessary that expenditure should be incurred, it is also necessary that it should be incurred for the purpose of business. Both these are matters of facts and the Assessing Officer is within his power to verify the same. In the case of the appellant, it has failed to prove that whether expenditure has been actually incurred or not on account of secret commission. Even if for the sake of argument it is to be accepted that the same has been paid, there is nothing to prove that the same has been incurred for the purpose of business." In this regard I would like to quote the observation of the Hon'ble Supreme Court in the case of Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1. "The businessmen are citizens of this country and the business they carry on affects the citizens of this country, any illegal payment made is ultimately passed on to the consumer public... It would be short sighted and myopic to hold that the businessmen are entitled to conduct their business even contrary to law and that, so long as the payments a....
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....s been carrying on the business in sugar and sugar products for the past so many years but no such commission was paid in the past. In the subsequent year such a claim has been surrendered under the Voluntary Disclosure Scheme. The cases relied upon by the learned counsel have been distinguished in a very detailed manner by the CIT(A) and we agree with his finding that the cases relied upon by the learned counsel for the assessee do not apply to the facts of the case of the assessee. Accordingly, we agree with the findings of the authorities below and decline to interfere. The ground raised by the assessee accordingly fails and the same is dismissed. 26. Ground No. 3 raised by the assessee reads as under: "The learned CIT(A) erred in confirming the disallowance by the Assessing Officer in respect of the entertainment expenditure on account of his failure to appreciate the facts on records and our submissions dated 11-8-1997 filed with him. The same being totally mechanical and in absence of any instructions by the CIT(A) to produce any evidence as he was satisfied with our explanation and never asked for anything more which is crystal clear from the records and therefore, the....
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....inment of visitors. The CIT(A) states 'however, no evidence in support of its claim has been produced before the undersigned. Under the circumstances, it appears that the Assessing Officer has correctly worked out the disallowances as per section 37(2) of the Income-tax Act, 1961." He accordingly upheld the disallowance of Rs. 11,282. 28. Shri S.N. Inamdar, the learned counsel for the assessee submitted that he will be satisfied if 2096 of the total expenses incurred are allowed for the staff accompanying the visitors and then the disallowance under section 37(2) may be computed, The learned D.R. relied upon the authorities below. 29. After hearing both the parties, we direct the Assessing Officer to allow 20 per cent of the total claim of the expenditure for staff who accompanied the visitors and on the balance disallowance under section 37(2) may be computed as per the provisions of law. This ground accordingly succeeds in part. 30. Ground No. 4 reads as under : "The learned CIT(A) though appreciated the assessee's firm's stand, but instead of deciding the issue at his end, remanded the same to the Assessing Officer for reconsideration and therefore, requesting to all....
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....er: --- "There are several criteria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture." Applying the aforesaid test, the court held at page 66 as under :--- "In the president case, there is no essential difference between pineapple fruit and the canned pineapple slices. The dealer and the consumer regard both as pineapple. The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The additional sweetness in the canned pineapple arises from the sugar added as a preservative. On a total impression, it seems to us, the pineapple slices must be held to possess the same identity as the original pineapple fruit." The test was again applied by the Apex Court in the case of Sterling Foods and it was held that raw shrimps, prawns and lobsters continues to remain the same even after the process of cutting of heads and tails, peeling, deveining, cleaning and....
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.... STC 322, the Apex Court at page 327 held as under :--- "The test commonly applied to such cases is : How is the product identified by the class or section of people dealing with or using the product? That is a test which is attracted whenever the statute does not contain any definition. Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433(SC). It is generally by its functional character that a product is so identified. In Commissioner of Sales Tax, U.P. v. Macneill & Barry Ltd. [1986] 61 STC 76(SC); [1985] 2 SCALE 1093 this Court expressed the view that ammonia paper and ferro paper, used for obtaining prints and sketches of site plans could not be described as paper as that word used in common parlance. On the same basis the Orissa High Court held in State of Orissa v. Gestetner Duplicators (P.) Ltd. [1974] 33 STC 333 that stencil paper could not be classified as paper for the purposes of the Orissa Sales Tax Act. It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is....
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....TC 476 :--- "The common parlance test is pressed into service if the article is one in daily household use or is used by the common man. The commercial parlance test is called in aid while dealing with the construction of goods known to the merchant community and the consumers of those goods. In the substantial identity test what is material is whether a distinct article as understood by the people who commonly deal with it, has come into being, i.e., in other words, whether in the market, it is regarded as a district article. It would be difficult for the court to say that one test overrides the other or that any one of them is the dominant one. It will be for the Court to consider in each case the principle to be applied on an overall view of the matter and taking guidance from decided cases. 39. In the present case the ordinary sugar which is subject to processing and candy sugar which is produced from the process are commodities of daily use by common man as well as in the business circle. The ordinary sugar is commonly known in north India as "Chini" and in western India i.e., Maharashtra & Gujarat as "Sakhar". On the other hand 'Candy Sugar' is well known as "Misri" in ....
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....arlance. 41. In the proposed order, much emphasis has been laid on the fact that candy sugar is only the purer form of sugar and therefore no emergence of new commodity. According to him essential ingredients continue to remain the same. So the identity of the original commodity is not lost. With due respect, I am unable to agree with this approach. The only relevant criteria is whether the item produced out of a process is considered a different items from the original item or not. If the item produced is different from the original one in view of tests laid down by apex court then such process has to be considered as manufacturing process. The reliance can be placed on the Supreme Court decision in the case of Coco Fibres. In that case question before the court was whether coconut husk and coconut fibres were different commodities. The process involved was as under:--- "Green coconut husk is soaked in saltish sea water for days together and after decomposition, it is subjected to beating by mechanical or manual process and then fibre is extracted". The Supreme Court took into consideration that such fibre was used for making ropes, matting etc. and held that such fibre w....
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....of sugar continues to remain in the "Candy Sugar". 42. The decision of Supreme Court in the case of Sakarwala Bros. heavily relied upon by the revenue is quite distinguishable and does not help the revenue. In that case, the question was whether "Sugar" as defined in entry 47 of Schedule 'A' of Bombay Sales Tax Act would include Patasha, harda & Elaichidana. Entry 47 had adopted the meaning Sugar as defined in item No. 8 of First Schedule to the Central Excise Act which read as under:--- "Sugar means any form of Sugar containing more than 90 per cent of sucrose" It is because of this definition, it was held by the apex court that Patasa, harda and Elaichidana fell within the definition of Sugar since these items contained more than 90% of sucrose. The court was never concerned with a question whether such item were different from the ordinary sugar in common parlance. This distinction has been considered by the Gujarat High Court in the same very case which is also reported at page 24 of the same report. At page 29, it has been observed as under : "The learned Advocate-General is right when he says that the articles known as "patasa", "harda" and "Elaichidana" bear a di....
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.... which results in the production of the following commodities : --- (a) Candy sugar (b) P.G. Sugar, i.e., Pharma grade. (c) Pulverised sugar (d) Bura sugar The items at (a) to (c) are claimed to be used by pharmaceutical companies, whereas item at (a) above is a by-product of sub-standard quality developed during the manufacture of items at (a) to (c) above. Candy sugar is known by various names in different parts of India and is known as "Misri" in north India. The question posed is whether the processing of sugar by the assessee, which results mainly in the production of candy sugar, is a manufacturing activity within the meaning of section 80-I of the Income-tax Act. The learned Accountant Member has indicated the details of the process involved in para 2 of his order and it is not necessary to reproduce it again. 3. Before me, the learned counsel for the assessee has taken me through the photographs of the details of the processing involved and the photographs are at pages 53-I to 53J. The photographs show melting section, filter section, pan station, centrifugal station etc., and the processing takes place on three different floors of the factory building, Th....
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....e that M.B. Chemicals Ltd. plant at Nilgavan is a genuine manufacturing activity involving intricate processing, energy consumption and strict quality control." It has also filed before the revenue authorities a certificate from Vasantdada Sugar Institute, which may be seen at page 53F of the APB, and it reads as follows :--- 'To whomsoever it may concern 1. This is to certify that M/s. M.B. Chemicals at Nilgavan in Malegaon Taluka of Nasik district, are manufacturing 'Candy Sugar' and Bura Sugar. 2. The above mentioned products are produced using plantation white sugar as raw material by following melting, clarification and filtration of the melt and further crystallisation and centrifugation process sequence is being followed for final products; as such the unit is performing manufacturing activity. 3. The "Candy Sugar" sample, supplied by M/s. M.B. Chemicals is analysed and Tested for standard characteristics. The results of analysis of candy sugar are given here with commercial plantation white sugar std. specifications along with typical analysis of plantation white sugar. ------------------------------------------------------------------------------------- ....
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....Water Solubles 0.10 Nil 0.05 (Max) % by Wt. 3. Reducing Sugar 0.10 0.008 0.039 (Max) % by Wt. 4. Specific conductivity 100 3.00 45.00 X 106t Max. 5. Sulphur dioxide 70 &nbs....
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....sp; For Ranbaxy Laboratories Limited Sd/- (S.Saxena) &n....
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....;Place: Mumbai (A.M. Pimutkar) Dated: 17-7-1998 Manager-Purchase & Admn." 7. It is also claimed that for the purposes of levy of excise duty, candy sugar is treated as a different product from sugar and in support of this proposition, the assessee has filed a proforma of the registration certificate issued by the excise authorities, wh....
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.... learned Accountant Member on the ground that in those cases a different commercial commodity in commercial terms does not come into existence. 10. The learned Departmental Representative on the other hand mentioned that candy sugar is nothing but sugar in crystal form. He explained that crystal is only a ball shaped particle of the substance from which it is formed. Candy sugar is sugar formed by boiling down sugar syrup. When water is heated, it takes more sugar than it does at room temperature and crystallization is a natural process. It is also claimed that the certificate given by Vasantdada Sugar Institute, which we have reproduced hereinabove, is misleading to the extent it mentions that there is a change in the chemical position of sugar when it is processed into candy sugar. In other words, it is claimed that all the changes mentioned in the certificate are only physical changes. It is also mentioned that expert evidence given by an associate is not reliable. He emphasised that a natural process like crystallization does not tantamount to a manufacture. He has also referred to various cases mentioned by the learned Accountant Member and sought support from them. He emph....
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....f you ask for candy sugar, you are given candy sugar only. In other words, it is claimed that candy sugar is a commercially different product from sugar and it is emphasised that the test of chemical change advocated by the learned DR is totally different from the judicial dicta in the matter. 12. The question posed in the present reference is not easy to decide. Both the learned Accountant Member and the learned Judicial Member have stated their views with clarity and a bare reading of the two orders is sufficient to impress upon the reader the subtlety of the question posed. Having said this, I am of the view that I have to agree with the learned Judicial Member. There is no dispute about the test to be applied to decide whether a particular processing activity amounts to manufacture or not. The test has been laid down by the Apex Court and various High Courts in unmistakable terms. The learned Accountant Member has extracted in para 10 at page 15 of his order the following extract from the judgment of the Apex Court in the case of Delhi Cloth & General Mills Co. Ltd. : "Manufacture implies a change, but every change is not manufacture and yet every change of an article is ....
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....to be a different form of sugar, it is this provision of the Central Act which was construed. It may also be observed that the Hon'ble Madras High Court specifically mentioned that this decision is not based on the test whether sugar as generally understood included sugar candy within its scope or not. So I am of the view that this decision is distinguishable and does not necessarily decide the issue against the assessee. The same is the position in the case of Sakarwala Bros. decided by the apex court. The head note of this decision reads as follows :--- "Patasa, harda and alchidana fall within the definition of "sugar" in entry 47 of Schedule A to the Bombay Sales Tax Act, 1959, and their sales are exempt from the payment of sales tax. The word "sugar" in entry 47 is intended to include within its ambit all forms of sugar, that is to say, sugar of any shape or texture, colour or density and by whatever name it is called. Decision of the Gujarat High Court affirmed." Both the Hon'ble Gujarat High Court and the apex court which affirmed the decision of the Hon'ble Gujarat High Court in this case have considered the difference between 'variety' and 'form" of a substance use....
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.... Sales Tax Tribunal in the case of Industrial Minerals & Chemicals, dealing with the conversion of copper sulphate powder into copper sulphate crystal, is distinguishable. In para 12 of its order, the Tribunal observed as follows:--- "12.... There are various certificates found in the DDQ file between pages 107-117. There is nothing in these certificates which say that in common parlance both the commodities are known as two different commercial commodities.... Thus all these certificates do not apparently make any distinction between both the commodities . . . ." It may be observed that in this case, the evidence produced by the assessee in terms of the various certificates filed did not show that copper sulphate powder was a commercially different commodity from copper sulphate crystal. The exact opposite is the position in the present case. The various certificates produced by the assessee from the pharmaceutical laboratories which I have extracted hereinabove show that candy sugar is a different commodity from sugar. The above conclusion is also supported by the decision of the Hon'ble Andhra Pradesh High Court in the case of Surana & Co. v. State of A.P. [1977] 40 STC 19....
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....ich has not been defined in the Act and which is a word of everyday use must be understood in the sense in which it is understood in general usage. As Craies observed in its Statute Law, Sixth Edition, at page 163, it must be construed in its popular sense meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it." This rule of construction was accepted and applied by the Supreme Court in Rainavatar v. Assistant Sales Tax Officer and also in Planters Nut Chocolate Co. Ltd. v. The King and Commissioner of Sales Tax, Madhya Pradesh v. Laddumal Jangilal it is obvious that sugar as understood in the popular sense does not include products of sugar like "Batasa". "Chiranji", "Mishri", etc. So, in Jethmal Ramswaroop v. The State, Wanchoo, C.J. (as he then was) observed : "Turning briefly to the merits of the case, we are of opinion that there is no force in the contentions raised by the applicants. Misri, Batasa, etc., are not merely sugar and the fact that sales tax has been paid on sugar is no reason for not levying sales tax on these articles made from sugar. Nor are we prepared to accept that they are Deshi sweetmeat....
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....e suit are prepared, there is manufacturing, because the articles brought into existence are commercially different commodities." 15. In the fight of the above, it is hardly a disqualification for the chemical content of candy sugar not to be different from sugar for the process involved to be categorised as manufacture. In the present case, in the light of evidence furnished before me, to which I have adverted in the earlier part of this order, it is clear that candy sugar is put to different uses from sugar and it is generally known as a different commercial commodity. Candy sugar is used by pharmaceutical companies and it has been ascertained in the course of the hearing that 45% of the sales of candy sugar by the assessee have been effected to pharmaceutical companies. There is merit in the contention of the learned DR that a decision under sales tax or excise laws in favour of the assessee is not decisive of the matter for ascertaining whether the process involved amounts to manufacture or not. That is because the legislative provision under those laws need not be identical with the relevant provision under the Income-tax Act. However, independently of the cases decided und....
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.... only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The additional sweetness in the canned pineapple arises from the sugar added as a preservative. On a total impression, it seems to us, the pineapple slices must be held to possess the same identity as the original pineapple fruit." It may be observed that the finding given is that the dealer and the consumer regard both the raw material and the finished product only as pineapple. In the case before me it appears to me that neither the consumer nor the dealer consider sugar and candy sugar only as sugar. As already mentioned hereinbefore, if the consumer asks for sugar, he does not get candy sugar from the dealer. If he asks for candy sugar, he does not get sugar either. In the case of Tungabhadra Industries Ltd., the Hon'ble Supreme Court has held that purification/refining of groundnut oil to obtain refined groundnut oil does not amount to manufacture. This is the authority on which the case of the revenue hinges. The relevant observations of the apex court from this case have been quoted both by the learned ....