1987 (8) TMI 438

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....o sheaving, smoking and stencilling, exported them. Their claim for exemption under section 5(3) of the Central Sales Tax Act, 1956, was negatived by the assessing authority. The said view was upheld by the Sales Tax Appellate Tribunal. After referring to a few decisions, the Sales Tax Appellate Tribunal held that the unfinished goods purchased by the petitioners and those exported by them after the process, such as sheaving, smoking, stencilling, etc., are two different commodities and so, the goods exported by the petitioners are not the very same goods purchased and so, they are not entitled to the exemption pleaded under section 5(3) of the Central Sales Tax Act. The assessees have come up in revisions. 2.. We heard counsel for the p....

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.... erroneous. The sole question, that arises for consideration, is whether, by the processes employed, the commodity purchased originally, can no longer be regarded as the original commodity, but instead, the product, recognised as a new and distinct commodity-distinct from the original-has come into being. The crucial test is whether in the eyes of those dealing in the commodity, or in the commercial parlance, the processed commodity is regarded as distinct in character and identity, from the original commodity. The decisions dealing with levy of excise duty cannot be a decisive factor in coming to the conclusion whether a commercially different commodity has emerged by the process employed by the dealer. In State of Tamil Nadu v. Pyare Lal ....

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....owing terms at page 243: "It is in the context of these provisions of the Karnataka Act that we have to consider whether shrimps, prawns and lobsters, when subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, retain their original character and identity or become another distinct commodity. The test which has to be applied for the purpose of determining whether a commodity subjected to processing retains its original character and identity is as to whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded, commercially and in the trade, the same as the original commodity. It is necessary to point out ....