2010 (7) TMI 77

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.... and T.C.(A) No.547 of 2010 pertains to the assessment year 2005-2006 respectively. 2. The orders passed by the Assessing Authority holding that the goods manufactured by the assessees would not cover the entitlement of exemption under Section 80-IB of the Income-tax Act, have been reversed by the Commissioner of Income Tax (Appeals). Challenging the same, the Revenue has filed a further appeal to the Tribunal and the Tribunal, in turn, has confirmed the said orders passed by the Commissioner of Income Tax (Appeals) and hence the present appeals. 3. The Revenue has filed these appeals by formulating the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was righ....

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....h process. Since the raw material is owned by the customer only the above manufacturing process, comprises our Sales Value". 5. The Assessing Officer has rejected the claim of the assessees for deduction under Section 80-IB of the Act, by holding that inasmuch as the very same raw material is used for the final product and in view of the admitted position that there is no change in the product, it cannot be termed as a new product and therefore, in the absence of any manufacturing process, the assessees' claim cannot be considered. However, the Commissioner of Income Tax (Appeals), considering the above observed process involved in the conversion of the raw materials CRGO Electrical Steel into lamination, which is a distinct commercial p....

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....is commercially different from the one, which is converted. The essence of manufacture is the change of one object to another for the purpose of making it marketable. The essential point thus is that in manufacture something is brought into existence, which is different from that which originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case processing it is not necessary to produce a commercially different article. (see Saraswati Sugar Mills V. Haryana State Board (1992) 1 SCC 418). The prevalent and generally accepted test to ascertain that there is "manufacture" is whether the change or the series of changes brought about by the application of processes take the commod....