TaxTMI 
TaxTMI 
2010 (7) TMI 892
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.... by the applicant for converting raw tobacco into chewing tobacco does not amount to manufacture within the meaning of section 2(17) of the Bombay Sales Tax Act?" The facts: The applicant, M/s. R.K. Patel & Company, is a partnership firm engaged in the business of manufacture and sale of chewing tobacco, i.e., jarda made from raw tobacco. The applicant is registered under the Bombay Sales Tax Act, 1959 and holds a certificate of registration No. 425401/S412. The applicant was assessed by the Sales Tax Officer (C19), Jalgaon by an order dated October 8, 2001. During the assessment proceedings, the applicant claimed a set-off in respect of the tax paid on the purchase of packing materials under rule 41D of the Bombay Sales Tax Rules, 1959 ....
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....The 3/4th varieties of whole leaf tobacco are dried under the sun initially. 3.. Analysis: Further, the whole leaf of raw tobacco is analyzed by a machine in order to have the following products: A. Fole patti B. Stems C. Rava D. Dust E. Loss Stems are further crushed by the machine to have the following by-products: a. Tayar kandi b. Rave dust mix c. Loss 4.. Separation and sorting: The fole patti is further persisted with loss and dust, which is sorted out to have a pure fole patti usable in manufacturing jarda. In this manner, tayar kandi is analyzed from stems which is also used in the manufacturing process. 5.. Blending: At this stage, the fole patti and the tayar kandi are blended together. 6.. Ornamenting: Lime water and l....
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...., 1988 to April 30, 1994) 41D. In assessing the amount of tax payable in respect of any period by a registered dealer who manufactures goods for sale or export, the Commissioner shall grant him set-off of the sum determined in accordance with the provisions of rule 44D of the Bombay Sales Tax Rules, 1959, in respect of purchase made by the claimantdealer of any goods specified in Schedule C and used by him within the State in the manufacture of goods for sale or in the packing of goods so manufactured." Mr. Surte has submitted that the aforesaid process carried out by the applicant for converting raw tobacco into jarda (chewing tobacco) amounts to manufacturing activity and as a result of the said process, raw tobacco loses its identity an....
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....or character of the original commodity has been changed. Per contra Mr. V.A. Sonpal, appearing for the respondent submitted that the decision of the honourable Supreme Court in the case of Bell Mark [1967] 19 STC 129 is not applicable to the present case and that the Tribunal has correctly held that the process of converting raw tobacco into chewing tobacco as explained in the case of Bell Mark Tobacco Co. [1967] 19 STC 129 (SC) and in the case in hand are quite different. Hence, the process involved in making of jarda by the applicant does not amount to manufacture within the scope of section 2(17) of the Bombay Act and the applicant is not entitled to claim a set-off under section 41D of the Bombay Sales Tax Rules, 1959. Conclusion We....
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....er analyzed by machine in order to have the following products: Whole leaf tobacco Fole patti Stems Rava Dust Loss Stems are further crushed by machine Tayar Kandi Rava dust mix Loss The fole patti is sorted out to remove dust. Thereafter the fole patti and the tayar kandi are blended together. Then lime water and liquid chemical is sprinkled on the fole patti and tayar kandi after its fusion for an entire night. It is further dried in the sun. After it is fully dried in the sun, it is ready for packing. In our considered view, the cumulative effect of the various processes such as drying under the sun, analysis of the whole leaf tobacco by machine into various products, separation and sorting into fole patti and tayar ka....