1984 (3) TMI 76

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....ged in manufacturing of any article. The assessee had claimed investment allowance and hence this question. The assessee collects large quantity of what is known as 'spent caustic lye' from the textile mills. The textile mills purchase what is known as caustic liquor having 97 per cent to 98 per cent purity for mercerising of cotton fabrics. They dilute it to a strength of 30 per cent to 40 per ce....

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....austic soda. It simply undertakes a process by which caustic soda which is already there in the mix is got from the mercerising waste of textile mills. In order to manufacture caustic soda, what is required to be done is to mix the ingredients of caustic soda and thus manufacture it. In the case of the assessee the caustic soda is already there in the mix and through a certain process which is not....

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.... manufacture because every change is not manufacture. He relied upon the following authorities--Chowgule & Co. (P.) Ltd.'s case and Tyreage (P.) Ltd. v. ITO [1983] 12 Taxman 47 (Bom. - Trib.). 5. To our mind it is not necessary to enter into the detailed discussion of all the authorities cited above. The law on the point is fairly well settled now. The test of manufacture is that the activity m....

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....l also is changed. Therefore, the new material is having a distinctive name, character and use. Thus, the test laid down in Delhi Cloth & General Mills Co. Ltd.'s case is satisfied. What is peculiar to this case that the process involved is very simple, namely, sedimentation, evaporation, etc., and it is that simplicity of the process which creates a misunderstanding of absence of manufacturing. B....