2003 (3) TMI 25

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....ion under sections 80HHA and 80-I of the Income-tax Act, 1961. The assessee is a small scale industrial undertaking, which makes blown bitumen. The process involved in making it as set out by the assessee is waste scrap bitumen is heated in a heating tank up to 225 degrees centigrade and is transferred into a reactor, and blown by air compressor, which raises the temperature up to 300 degrees centigrade. Thereafter, it is kept in a chamber for three to four hours, during which period the water and oil in the bitumen evaporates. As part of the oil that is so removed does not evaporate fully, a portion of it comes down as processed oil, which is used again as a fuel. The assessee admittedly did not regard this process as resulting in a ....

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....a manufacturing activity." Heating of the scrap bitumen in order to obtain solid bitumen, by causing the moisture and oil in the scrap bitumen to evaporate or separate, cannot be compared to curing of coffee and the conversion of raw berry into coffee beans. We may now make a rapid survey of cases where it has been held that no "manufacture" had taken place: (i) Conversion of chicory root into chicory powder by roasting and powdering does not amount to manufacture, as held by the Supreme Court in the case of Sacs Eagles Chicory v. CIT [2002] 255 ITR 178. (ii) Subjecting raw uncut diamonds to a process of cutting and polishing, which yields the polished diamond, has been held to be not amounting to manufacture, in the case of CIT....

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.... (viii) Recording of sound by jobber on magnetic cassette tapes or spool magnetic tapes supplied by customer does not amount to manufacture, as held by the Supreme Court in the case of Prabhat Sound Studios v. Addl. CCE [1997] 107 STC 70; [1997] 10 SCC 543. (ix) Mining of limestone and marble and cutting and sizing the same before it was sold in the market cannot be considered as amounting to manufacture, as held by the Supreme Court in the case of Lucky Minmat Pvt. Ltd. v. CIT [2000] 245 ITR 830. (x) The apex court has, in the case of CCE v. Wainganga Sahkari S.Karkhana Ltd. [2002] 127 STC 12; [2002] 5 SCC 415, held that making trusses, columns and purlins by conducting fabrication work at the site, does not amount to manufacture. ....