Tag Archives: Manufacturing

Manufacture – Concept of

While dealing with the question as to whether the process of bleaching, dyeing, printing, sizing, shrinkproofing, waterproofing, rubberizing or organic processing carried on in respect of cotton or manmade grey fabric amounted to “manufacture” within the meaning of Central Excise and Salt Act, 1944, the Hon’ble Apex Court in Ujagar Prints (2) v. Union of India, (1989) 3 SCC 488, held that the generally accepted test to find out whether there was manufacturing was to see whether the application of processes brought out a change to take the commodity that it could no longer be considered as the original commodity. The said decision was applied in Aspinwall & Co. Ltd., v. CIT, (2001) 7 SCC 525 and again by the Hon’ble Apex Court in Orient Paper & Industries Ltd. v. State of M.P., (2006) 12 SCC 468.
In State of Karnataka v. Shaw Wallace & Co. Ltd., (1998) 110 STC 506 (Kant), the Hon’ble High Court of Karnataka considered a case of the dealer engaged in Indian Made Foreign Liquor. The High Court held that without blending there cannot be any manufacture of IMFL. It is also to be pointed out that blending is also an essential part of the manufacturing process of IMFL. Even if the part of the process is done by the assessee and the other part under the control and the supervision of other parties, yet, the concept of manufacturing process cannot be taken out. CIT v. VINBROS & Company, (2015) 14 SCC 483.

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Filed under Excise Act, Manufacture

Manufacturing Process – Definition of

In Employees State Insurance v. Duncan Gleneagles Hospital Ltd, 2005 LLR 1071 it was held as under:
“The definition of ‘manufacturing process’ includes otherwise treating or adopting any article or substance with a view to its use, sale transport, delivery or disposal. The outcome of the test is recorded through various machineries electronically operated or otherwise. In some cases, these are recorded in special kind of papers or any photo plates or X-ray plates or certain kinds of devices recording Ultra sonographic tests. The process of these tests were not carried on either for making, altering repairing, ornamenting, finishing or otherwise treating or adopting any article or substance, namely, the X-ray plates or the papers or the sonographic records with a view to its use, sale, transport, delivery or disposal. These articles or substances were used in aid of the process for the examination or the tests carried on. It is the report of the test, which is produced. It is the service of preparing the report or diagnosis is the service rendered. The process is not undertaken for the purpose of production of any article or substance in the form of developed X-ray films or sonographic records or anything else. If it is interpreted in such a manner, then in that event, even printing floppies or writing disks or typing of papers in course of any business or commerce or any office or administration would also amount to undertaking of manufacturing process since floppies, disks, Xerox and typing are undertaken for the use or disposal. But if the pathological laboratory undertakes tapping of blood and process the same and use the same for the purpose of sale or transfusion or otherwise use thereof, the same may be a manufacturing process. But the pathological tests would not amount to manufacturing process even though the production of the developed X-ray films or sonography reports may amount to manufacturing process otherwise in some other context. It has to be reconciled with the purpose and object for which it is being used or utilized. Rajesh Saigal v. State of Haryana, 2015 (146) FLR 588.

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Filed under Commercial Law, Manufacturing Process