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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