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2010] Commissioner, Trade Tax v. Ramco Coke Industries (All.) 199
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burning loss. He submitted that the Tribunal in its order has also observed
that in the manufacturing of Hard Coke from coal a manufacturing
process is involved in which its nature changes but there is no difference
in fundamental nature, therefore, it has been admitted by the Tribunal
also that in the manufacturing of Hard Coke from coal a manufacturing
process is involved and the nature of the commodity changes. Therefore,
treating both the items as one and the same is wholly unjustified. He
submitted that coal and Hard Coke are two different commodities by its
composition, nature and use. Though it is true that both coal and Hard
Coke are used as a fuel but two commodities being different to each other
and Hard Coke is manufactured and obtained as a manufactured product
from the coal by a burning process.
6. Having heard learned counsel for the parties, I have perused the order
of the Tribunal and authorities below.
7. It appears that the coal breezes are being burnt at a specific temperature
to remove the impurities from the coal and as a result of such burning
process Hard Coke is obtained. Hard Coke is a highly combustible item.
Though breezes and Hard Coke both are used as fuel but Hard Coke is
used for specific purposes being highly combustible.
8. The manufacture is defined under section 2(e-1) of the Act reads as
follows :
“‘Manufacture’ means producing, making, mining, collecting, extracting,
altering, ornamenting, finishing or otherwise processing, treating or adapting
any goods but does not include such manufacture or manufacturing process
as may be prescribed.”
9. The above definition is very wide as held by this Court in B.P. Oil Mills
Ltd. v. Sales Tax Tribunal AIR 1998 SC 3055. The definition of ‘manufacture’
in section 2(e-1) of the Act includes “processing, treating or adapting
any goods”. Thus, the meaning of “manufacture” in the U.P. Trade Tax Act
is wider. A dealer will be liable to pay tax on sale of any goods he makes
by processing, treating or adapting the goods he purchased. In B.P. Oil Mills
Ltd.’s case (supra), the Supreme Court held that refining crude oil amounts
to a “manufacture”.
10. In the case of Chowgule & Co. (P.) Ltd. v. Union of India AIR 1981 SC
1014 the Apex Court observed that where any commodity is subjected to
a process or treatment with a view to its development or preparation for
the market it would amount to processing. The nature and extent of
processing may vary from case to case, in one case the processing may be
slight and in another it may be extensive; but in each process suffered the
commodity would experience a change. The Court further observed that
whatever be the means employed for carrying out of processing operation.
It is the effect of the operation on the commodity that is material for
the purpose of determining whether the operation constitutes processing.
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 75