ORDER October, 2004 Both these appeals filed by assessee against two separate orders of CIT(A) dt. 1st Jan., 2004 and 5th Jan., 2004 pertaining to asst. yrs. 2000-01 and 2001-02 involve identical questions of fact and law. So these are being disposed of by this common order for sake of convenience. 2. At time of hearing, Shri Sanjay Jhanwar and Shri M.S. Jhanwar were present on behalf of assessee and filed written submissions and Shri D.R. Zala was present on behalf of Department. 3. Briefly stated facts of case are that assessee is private limited company. It is industrial undertaking engaged in business of sawing of marble blocks into slabs and tiles and also in trading of marble blocks and tiles in both indigenous and foreign market. assessee-company also exported goods and earned foreign exchange and claimed deduction under s. 80HHC of IT Act, 1961 (hereinafter referred to as Act ). Apart from trading of marble, assessee-company also derived income from job charges, receipts of sawing marbles of others. assessee-company keeps computerized account books consisting of cash-book, ledger, general sales and purchase register along with bills and vouchers which have been examined and verified on test check basis. On examination of these account books, sales, purchases and expenses relating to manufacturing expenses i.e. sawing, polishing, freight, power and fuel and factory expenses have been found vouched and trading results declared by assessee-company are better in comparison to preceding year. However, during course of scrutiny, AO found that deduction under s. 80-IA of Act cannot be allowed to this assessee. 4. According to AO, prime condition for allowing deductions under these sections is that industrial undertaking should have "manufactured" or "produced" any article or thing specified in Eleventh Schedule of Act. He relied on decision of Hon ble Supreme Court of India in case ofLucky Minmat (P) Ltd. vs. CIT (2000) 162 CTR (SC) 404 : (2000) 245 ITR 830 (SC)wherein it was held that mere mining of marble and cutting same before it was sold in market could not be considered manufacturing or production activity as required under s. 80-IA of Act. According to AO, Hon ble Supreme Court, in above case, has held that activities of sawing of marble blocks into sizeable blocks and tiles before selling them into market, carried over by assessee-company cannot be considered as manufacturing or production activity and thus assessee-company is not entitled to benefit of s. 80-IA of Act. So, AO made additions by disallowing claim under s. 80-IA of Act in both years by separate orders. 5 . assessee preferred appeal against this finding of AO for both years and learned CIT(A), in turn, confirmed orders of AO and hence assessee is in appeal before us. 6. We have heard rival submissions and have perused evidence on record. We have also considered long paper books filed before us and have also carefully treaded through provision of Act and precedent relied by both parties. We have also given our thoughtful consideration to all facts, evidence and material on record. 7 . learned Authorised Representative Shri Sanjay Jhanwar has vehemently argued before us that decision of Hon ble Supreme Court relied by AO in case ofLucky Minmat(supra) is distinguishable on facts and hence ratio of this decision is not at all applicable to facts of present case. For that matter, he has relied on various decisions and has also taken us through above decision of Hon ble Supreme Court, and decision of Hon ble High Court and also that of Tribunal. 8 . learned Authorised Representative has taken us through long paper book and has tried to convince us that process involved in production of tiles and marble blocks is in fact manufacturing activity of assessee, and/or on worst part, it is definitely production activity of assessee and hence claim of deduction under s. 80-IA of Act is available to it. learned Authorised Representative has also taken us through various steps involved in alleged production/manufacture activity under reference. He has relied on various steps taken in production of tiles and marble slabs by assessee-company, and this fact could not be controverted by learned Departmental Representative, Shri D.R. Zala. Various steps undertaken by assessee-company in its activity are reproduced below : (i) Marble blocks excavated/extracted by mine owners being in raw uneven shapes have to be properly sorted out and marked; (ii) Such blocks are then processed on single blade/wire saw machines using advanced technology to square them by separating waste material; (iii) squared up blocks are sawed for making slabs by using gang-saw machine or single/multi-block cutter machine; (iv) sawn slabs are further reinforced by way of filling cracks by epoxy resins and fiber netting; (v) slabs are polished on polishing machine; slabs are further edge cut into required dimensions/tiles as per market requirement in perfect angles by edge cutting machine and multi-disc cutter machines; (vi) Polished slabs and tiles are buffed by shiner. 9. In addition to this, learned Authorised Representative has also taken us through photographs which are placed at p. 128 onwards of paper book wherein all processes taken in process of production of tiles of assessee are picturized. 10 . learned Authorised Representative has also drawn our attention to p. 6 of paper book and particularly, its para 2.4 and has submitted that assessee-company has been consistently regarded as manufacturer/producer by various Government Departments and agencies and its process is being regularly considered as manufacturing and production process. In support of this fact he has relied on para 2.4 of paper book which is reproduced below : (i) assessee-company is duly registered with Ministry of Commerce and Industries for manufacture of marble slabs/tiles as stated in acknowledgement dt. 4th May, 2000. (ii) assessee-company has been found entitled to and been extended benefit of sales-tax exemption by Government of Rajasthan on manufacturing marble slabs and tiles under Sales-tax Exemption Scheme and Sales-tax Deferment Scheme. Copy of letter dt. 23rd March, 1995 GM, DIC, Member Secretary, District Industries Centre, Udaipur and dt. 20th March, 1998, issued by Asstt. Commr., Commercial Taxes Department, Udaipur, Government of Rajasthan for such eligibility are annexed herewith marked Annexs. 2 and 3, respectively. Further letter dt. 11th Nov., 2002 issued by Commr., Industries, Rajasthan, Jaipur, confirming eligibility under Sales-tax Exemption Scheme on sale of marble slabs manufactured by unit of assessee is also annexed herewith marked as Annex. 4. (iii) Asstt. Commr., Commercial Taxes Department, Udaipur, issued certificate of registration No. RST/2744/02679/SP dt. 26th Aug., 1995 permitting/ allowing manufacturing of marble slabs and tiles. (iv) Government of Rajasthan, District Industries Centre, Udaipur, issued permanent registration certificate for manufacture of marble slabs. (v) Central Excise Registration Certificate issued to assessee confirming that factory of assessee-company is registered for manufacturing marble slabs/tiles is annexed herewith. (vi) Chemicals and Allied Products Export Promotion Council, New Delhi, issued registration-cum-membership certificate for manufacture of marble slabs. In relation to all these six points, evidences which are placed at pp. 35 to 44 of paper book have been referred to and relied by learned Authorised Representative to substantiate his contention. 11. On other hand, learned Departmental Representative has relied on orders of AO and learned CIT(A) and has further relied on decision of Hon ble Supreme Court in case ofLucky Minmat(supra) on decision of Hon ble Supreme Court in case ofLucky Minmat(supra) on which AO and learned CIT(A) have also relied. 1 2 . We have given careful thought to facts, circumstances and evidence and all other relevant material available on record. So far as process involved in activities of assessee is concerned, Department has not denied or controverted; it has only disputed that even then activity of assessee-company cannot be taken to be manufacturing or production activity. It is also not disputed by Department that such dispute never arose in past, earlier to these assessment years which are under consideration. assessee-company had been regarded as manufacturer/ producer by Government Department/agencies in all preceding years. To define word "manufacture , submissions of learned Authorised Representative, are contained in para 4.3 of paper book placed at p. 10 as under : Law Lexicon Manufacture is transforming or fashioning of raw materials into change of forms for use. production of articles for use from raw or prepared materials, given by these materials new forms, qualities, properties of combinations, whether by hand-labour or by machinery. Rajasthan Sales-tax Act, 1994, s. 2(27) "Manufacture" includes every processing of goods, which brings into existence commercially different and distinct commodity but shall not include such processing as may be notified by State Government. Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Factories Act, 1948 "Manufacturing process means any process for making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adapting any article or substance with view to its use, sale, transport delivery or disposal." S. No. 959A : CCT Circular F. 16 ( 10 2) Tax/CCT/89/3581 dt. 9th Jan., 1995 issued by Commr., Government of Rajasthan "It clarifies that after excavation of marble from mines, activity of cutting blocks into slabs and tiles falls within ambit of manufacture but mere edge cutting and/or polishing of stone will not be treated as manufacturing activity." Exim Policy 2002-2007, Chapter 9 para 9.30 "Manufacture" means to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, new product having distinctive name, character or use and shall include processes such as refrigeration, re- packing, polishing and labelling. Manufacture for purpose of this policy shall also include agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining. Calcutta High Court in case ofCIT vs. East India Hotels Ltd. (1995) 123 CTR (Cal) 27 : (1994) 209 ITR 854 (Cal) test of manufacture lies in answer to question that whether what is produced or processed as end of product is commercially known as different product from materials out of which it is so produced. Therefore, if product has different name and is identified by buyers and sellers as different product and is bought and sold as distinct product from its raw materials, one can say that it is manufactured product. CIT vs. R.C. Construction (1997) 137 CTR (Gau) 486 : (1996) 222 ITR 658 (Gau) Activity making chips out of big stones was held as manufacturing. CIT vs. Tata Locomotive & Engineering Company Ltd. (1968) 68 ITR 325 (Bom) Assembling of bus/trucks from imported parts amounts to manufacture [Ref. Indian IT Act, 1922 s. 15C(2) and s. 15C(6)]. CIT vs. Hindustan Metal Refining Works (P) Ltd. (1981) 23 CTR (Cal) 252 : (1981) 128 ITR 472 (Cal) production or manufacture of goods involves bringing into existence new goods or article known as such goods or article in market. Ujagar Prints vs. Union of India & Ors. (1989) 75 CTR (SC) 1 : (1989) 179 ITR 317 (SC), Empire Industries Ltd. vs. Union of India AIR 1986 SC 662, 673d, South Bihar Sugar Mills Ltd. vs. Union of India AIR 1968 SC 922, 968 . Manufacturing implies change and there must be transformation, new and different article emerging with distinctive name, character or use. Grey fabric, after undergoing various processes of bleaching, dyeing, sighing, printing, finishing, etc. merges as commercially different commodity with its own price structure, customs and other commercial incidents, involving manufacture . S.S.T. vs. Dr. Sukh Deo (1969) 23 STC 385, 387 (SC) expression manufacture has in ordinary acceptance wide connotation, it means making of articles or material commercially different from basic components, by physical labour or mechanical process, and manufacturer is person by whom or under whose direction or controls articles or materials are made. CIT vs. Kanam Latex Industries (P) Ltd. (1996) 132 CTR (Ker) 178 : (1996) 86 Taxman 466 (Ker) Conversion of normal and natural latex into preserved latex by centrifuging process, amounts to manufacture, as it is commercially different from natural latex and capable of being put to different use (Ref. IT Act, 1961 s. 80J). South Bihar Sugar Mills Ltd. vs. Union of India (supra) Manufacture is end result of one or more processes, through which original commodity passes. Manufacture implies change but every change is not manufacture. new and different article must emerge having different characters, use and name. CCE vs. Rajasthan State Chemicals Works 1991 (55) ELT 444, 448, 449 (SC) process is manufacturing process when it brings out complete transformation for whole components so as to produce commercially different article or commodity. But, that process itself may consist of several processes which may or may not bring about any change at every intermediate stage. But activities of operation may be so integrally connected that final result is production of commercially different article or thing. CIT vs. Darshak Ltd. (2001) 165 CTR (Kar) 17 : (2001) 247 ITR 489 (Kar) Transforming plain glassware into decorative glassware amounts to manufacture as end product is different and distinct from plain glassware. Ship Scrap Trader vs. CIT (2001) 168 CTR (Bom) 489 : (2001) 251 ITR 806 (Bom) Ship-breaking activity is manufacture since new commercial and identifiable article comes into existence. CIT vs. S.L. Agarwal & Co. (1992) 10 1 CTR (Ori) 222 : (1991) 197 ITR 239 (Ori) Breaking of huge iron ingots into small pieces amounts to manufacture, as smaller pieces were different and distinct commercial commodity. Aditya Mills Ltd. vs. Union of India 73 STC 195 (SC) Changing of raw material by application of some process amounts to manufacture and therefore doubling together of two plies of polyster spun yarn and one ply of rayon yarn and resulting into special PPRF yarn amounts to manufacture. Dy. CST vs. Pio Food Packers 46 STC 63 It is change or series of change, take commodity to point where commercially it can no longer be regarded as original commodity but instead is recognized as new and distinct article, then manufacture can be said to take place. CIT vs. Sree Krishna Pulverising Mills (2000) 163 CTR (AP) 151 : (2000) 241 ITR 262 (AP) barytes are distinct not only in form and name but also in use from barytes powder and barytes powder is distinct and separate article produced from barytes and is used for different purposes and hence industrial undertaking qualifies for deduction under ss. 80HH and 80-I of Act. phraseology of said two sections is identical in this respect. Tatson Food Industries vs. State of Kerala (2000) 119 STC 265 (Ker) turmeric and turmeric powder are distinct commodities. Turmeric gets consumed when it is powder and in its place new goods/commodities emerge. Turmeric powder so emerging has higher utility than commodity and commercial turmeric powder is different from turmeric. State of Karnataka vs. B. Raghurama Shetty (1981) 47 STC 369 (SC) manufacturer also consumes commodities which are ordinarily called raw materials when he produces semi-finished goods which have to undergo further processes of production before they can be transformed into consumer s goods. At every such intermediate stage of production, some utility or value is added to goods, which are used as raw materials, and at every such stage raw materials are consumed. Take case of bread. It passes through first stage of production when wheat is grown by farmer, second stage of production when wheat is converted into flour by miller and third stage of production when flour is utilized by baker to manufacture bread out of it. miller and baker have consumed wheat and flour, respectively, in course of their business. Rajasthan Roller Flour Mills Association vs. State of Rajasthan (1993) 91 STC 408 (SC) Applying reasoning adopted hereinabove, it must be held that when wheat is consumed for producing flour or Maida or Suji, commodities so obtained are different commodities from wheat. wheat loses its identity. It gets consumed and in its place new goods/commodities emerge. new goods s o emerging have higher utility than commodity consumed. They are different goods commercially speaking. Union of India vs. J.G. Glass Industries Ltd. AIR 1998 SC 839. Court held that two-fold test emerges for deciding whether process is that of "manufacture" : (a) Whether by said process different commercial commodity comes into existence or whether identity of original commodity ceases to exist; and (b) Whether commodity which was already in existence will serve no purpose but for said process. CIT vs. Best Chem & Lime Stone Industries (P) Ltd. (1993) 113 CTR (Raj) 298 : (1994) 2 10 ITR 883 (Raj) "Manufacture involves bringing into existence of new product which m y have different physical or chemical composition and is understood differently in common and commercial parlance." It held that upon conversion of mineral into form of Rodi and powder it does not retain physical shape, which raw material was and it understood as different commercial commodity by business community. In these circumstances, Tribunal was justified in coming to conclusion that conversion of limestone by crushing into Rodi or lime dust is process of manufacture. It referred to earlier decision inCTO vs. Bikaner Gypsum Ltd. (1986) 61 STC 264and distinguished that decision after holding that conversion of mineral in form of Rodi and powder, it is evident that it does not retain physical shape which raw material has and is understood as different commercial commodity by business community. Union of India vs. Delhi Cloth & General Mills (1977) ELT (J) 199 Manufacture implies change, but every change in raw material is not manufacture although every change of article is result of treatment, labour and manipulation. In order to make change amount to manufacture something more is necessary and that something more is such transformation of production is (to) bring into (existence) new and different article having different name, character and use. CCE vs. Kutty Flush Doors & Furniture Co. (P) Ltd. (1988) 70 STC 314, 315-316 (SC) It is well settled that excise duty becomes chargeable only when new and different article emerges having distinct name, character and use. Asstt. CTO vs. Girrota Silica Udyog (1994) 93 STC 280 (Raj) It discussed procedure adopted with excavation of silica sand and its sale. It stated that procedure adopted is "(i) boulders are excavated from mines and they are graded, (ii) stones and impurities are removed, (iii) process of screening and grading adopted, (iv) different sizes of silica-sand is taken out after passing through sieve and such graded silica-sand is used for different industries like tiles, ceramic, glass, etc. and lumps excavated from mines are not sold and it is only after above process that silica sand is sold". Hon ble High Court held that above act was manufacturing in context of Sales-tax Act. CTO vs. Bhonri Lal Jain (1994) 94 STC 118 (Raj) When after excavation of blocks, it was cut into specified sizes and process of reducing big blocks of stones to smaller pieces having definite length, breadth and thickness is process of manufacturing. It also observed that blocks and stones had different commercial names in common and commercial parlance and hence dealer was manufacturer entitled to avail of benefit of notification under sales-tax law. Dy. CIT vs. Mysore Minerals Ltd. (2001) 167 CTR (Kar) 11 : (2001) 250 ITR 730 (Kar) Business of extraction of granite cutting, polishing and conversion into slabs amounts to manufacture and production of article or thing entitled to investment allowance as same involves manufacturing. 4.4 It is evident from above discussion that if following tests are satisfied then one can say that there is manufacture or production : (i) There is change or transformation of one commodity into another. (ii) two commodities are commercially different and distinct. (iii) resultant commodity emerging out of process should have distinct name, character or use. (iv) All changes and mere change of size does not tantamount to manufacture and change should be such as to bring into existence new commodity having different identity. 13. From various definitions and decisions, it finally emerges that if following tests are satisfied by assessee, then it can be said that there is manufacture or production . These tests are that : (i) there is change or transformation of one commodity into another; (ii) two commodities are commercially different and distinct; (iii) resultant commodity emerging out of process should have distinct name, character or use; (iv) all changes and mere change of size does not tantamount to manufacture and change should be such as to bring into existence new commodity having different identity. 1 4 . When these tests are applied to facts of assessee s case, according to learned Authorised Representative, assessee is manufacturer/ producer. For that purpose, he has relied on chart placed at p. 18 of paper book wherein he has tried to apply above tests to facts of this case and tried to explain activities relating to marble business from first point to last. 15. This fact is not denied by Revenue that appellant company is registered with Central Excise Department and Department has been regularly charging excise duty on manufacture of marble slabs and tiles by considering same as falling within scope of manufacture . Page 41 of paper book contains necessary evidence and from this, it is crystal clear that Excise Department has accepted assessee as manufacturer . Sales-tax Department has also considered assessee as manufacturer or producer and necessary evidence is at pp. 37-38 of paper book. Bank of Baroda, RFC and Pollution Control Board and various other Departments have accepted assessee as manufacturer or producer . But we are concerned with IT Act. above facts may help us in coming to conclusion. But these cannot be followedin toto. 1 6 . learned Authorised Representative has tried to distinguish facts of theLucky Minmat scase (supra) by placing before us assessment order, learned CIT(A) s order, copy of Tribunal, Jaipur Bench order, Hon ble Rajasthan High Court decision and Hon ble Supreme Court decisions dt. 24th Nov., 1980, 29th Jan., 1982, 4th Feb., 1993, 27th Feb., 1996 and 3rd Aug., 2000, respectively and has tried to demonstrate before us that facts inLucky Minmat scase (supra) are entirely different from facts of case in hand. 1 7 . We have gone through all these orders. Para 2 of Hon ble Supreme Court decision placed at p. 255 of paper book clearly says that assessee had business of mining of limestones and marble blocks and thereafter cutting and sizing same before being sold in market. We would like to reproduce para 2 below : "The High Court noted that facts found by Tribunal in instant case were assessee had business of mining of limestones and marble blocks and thereafter cutting and sizing same before being sold in market . High Court distinguished its earlier judgment in case ofCIT vs. Best Chem & Lime Stone Industries (P) Ltd. (1993) 113 CTR (Raj) 298because there assessee was engaged in business of extracting limestone and its sale either as such or after converting it into lime and lime dust or concrete by stone crushers. Such, High Court found, were not facts in case before us." 18. From above, it is crystal clear that inLucky Minmat scase (supra), assessee had business of "mining" and blocks were only cut to size before selling same in market and there was no other activity involved. 1 9 . Hon ble Supreme Court inLucky Minmat scase (supra) was considering claim of manufacturing of assessee for purpose of deduction under s. 80HH of Act based on undisputed facts that said assessee had business of mining of marble blocks and limestones and thereafter cutting and sizing same before being sold in market. Hon ble Supreme Court distinguished facts ofBest Chem & Lime Stone Industries (P) Ltd.(supra) with case decided by High Court inCIT vs. Lucky Mineral (P) Ltd. (1996) 134 CTR (Raj) 541 : (1997) 226 ITR 245 (Raj)and held that conversion into lime and lime dust or concrete by stone crushers could legitimately be considered to be manufacturing process while mere mining of limestone and marble and cutting same before it was sold in market could not be so considered. So, Hon ble Supreme Court confirmed view expressed by Hon ble Rajasthan High Court in case where commodity retains substantial identity throughout processing stage. It cannot be stated that it had been manufactured. 20. But facts of these assessees are that marble is found in shape of bulky rocks and such rocks cannot be sold in that form and shape. Such rocks have to be cut and sized for transportation and marketing purposes. Such primary cutting and sizing of marble by mine owner does not convert either original identity, character or use of commodity. So, such activity cannot tantamount to manufacture. 2 1 . appellant-company acquires or purchases marble blocks primarily cut and sized for transportation and marketing by mine owners. Thereafter, company converts same through comprehensive manufacture and production process into marble slabs and tiles as has been detailed above. So, case of this assessee cannot be equated with case ofLucky Minmat(supra). following decisions of Hon ble Rajasthan High Court can be applied to facts of this case : 1.CIT vs. Best Chem & Lime Stone Industries (P) Ltd.(supra) 2.CTO vs. Bhonri Lal Jain(supra) 3.Asstt. CTO vs. Girota Silica Udyog(supra) 4.Union of India vs. Delhi Cloth & General Mills(supra) 5.CTO vs. Prakash Udyog (2002) 126 STC 372 (Raj) 22. whole controversy in this case hinges around definition of words "manufacture" or "production". IT Act, has not defined either manufacture or production , and rightly so, because these cannot be defined either by giving inclusive and exclusive definition. There cannot be straight-jacket formula, in which activity of manufacture/production can fit in. 23. issue as to what constitutes manufacture is perennial problem, because concessions meant for manufacturing units as new industrial undertakings or by way of development rebate, investment allowance, etc. are sought to be whittled down by adverse interpretations. 24. In interesting decision of Karnataka High Court inCIT vs. Gogte Minerals (1996) 136 CTR (Kar) 499 : (1997) 225 ITR 60 (Kar), mining for excavating iron ore were accepted as manufacturing process with result that new machinery and plant used in mining operations, was held to be eligible for investment allowance. In coming to conclusion, it took view that there is production of article or thing in such operations of extracting iron ore embedded in earth. It distinguished its earlier decision against assessee inHind Nippon Rural Industries (P) Ltd. vs. CIT (1993) 201 ITR 581 (Kar)by pointing out that in this case assessee inHind Nippon scase (supra) is subject-matter of special leave granted to assessee by Supreme Court as reported in(1992) 197 ITR (St) 2. definition of manufacture in case ofChowgule & Co. (P) Ltd. vs. Union of India (1981) 47 STC 124 (SC), and decision of Gujarat High Court inCIT vs. Kutch Oil & Allied Industries (P) Ltd. (1986) 50 CTR (Guj) 37 : (1987) 163 ITR 237 (Guj), which accepted pulverization of bentonite as industrial activity gave wider scope to pulverization of bentonite as industrial activity gave wider scope to concept of manufacture where there is relocation resulting in substantial value addition. 25. So, on every type of activities, there are divergent views expressed by different High Courts and/or by same High Court even. Even Hon ble Supreme Court has taken different views on same subject. But, these are specifically based on facts of each and every case. Courts have specifically mentioned in all such decisions that decision is taken on particular facts of that particular case. So, fact remains, again, that there cannot be any straight-jacket formula to define manufacture/production, it will depend on facts and circumstances of given case. 2 6 . Before we deal with case laws relied by learned Authorised Representative we would like to revert back to decision of Rajasthan High Court in case ofCIT vs. Lucky Minerals (P) Ltd.(supra) which is heavily relied by learned Departmental Representative. 27. facts ofLucky Mineral(supra) were stated at p. 247 as under : "The assessee had business of mining of limestones and marbles blocks and thereafter cutting and sizing same before being sold in market. assessee claimed itself to be industrial undertaking for purpose of s. 80HH of IT Act. ITO did not accept same, as according to him, assessee was not engaged in manufacture or production of goods. CIT(A), however, accepted claim of assessee and allowed appeal. T h e Tribunal, on appeal by Revenue, sustained order of CIT(A) following earlier decision of Bench in case of assessee itself for asst. yr. 1978-79 in ITA Nos. 1492 and 1493 dt. 25th July, 1980." 28. Again Hon ble Judges clarified facts at pp. 251, 252(A) pertain to be more specific on facts as under : "We have statedin extensothe facts found by Tribunal. Those facts are that activities of assessee-company consist of excavating limestone and marble boulders and after cutting boulders into slabs." 29. In above decision, it has been observed by Hon ble High Court as thus : "The Supreme Court had spoken almost in same words in case ofUnion of India vs. Delhi Cloth & General Mills (1977) ELT 199(SC)where it was observed that manufacture implies change, but every change in raw material is not manufacture although every change of article is result of treatment, labour or manipulation. In order to make change amount to manufacture something more is necessary and that something more is such transformation of production as brings into existence new and different article having distinct name, character or use. same view was expressed in case ofSouth Bihar Sugar Mills vs. Union of India (1978) ELT (J) 3, where it was observed that if new substance known to market emerges, this will amount to manufacture. In case ofEmpire Industries Ltd. vs. Union of India (1986) 162 ITR 846 (SC), it was observed by Supreme Court that to constitute manufacture, it is not necessary that one should absolutely make out new thing because it is well-settled that one cannot absolutely make thing by hand in sense that nobody can create matter by hand. It is transformation of one matter into something else which would amount to manufacture. It is question of degree that something else is different commercial commodity having its distinct character, use and name and commercially known as such. In other words, if by application of labour and skill commodity is transformed to extent that it is commercially known differently, it will suffice to say that manufacture has taken place. moment there is transformation into new commodity having its own character, use and name whether as result of one process or several processes, manufacture takes place." 30. Hon ble Court has heavily borrowed language fromDy. CST vs. Pio Food Packer(supra) to arrive at decision, as has been mentioned by Hon ble Judges themselves in order. 31. To sum up, in manufacturing activity, raw material transforms into new commodity having its own character, use and name whether as result of one process or several processes. 32. Every change in raw material is not manufacture, although every change of article is result of treatment or manipulation. This change should bring into existence new and different article having distinct name, character or use. 33. Now let us test activity of this assessee in light of above decision of Hon ble Rajasthan High Court inLucky Minerals(supra). 34. First of all we have to see as to whether facts of this case are identical to theLucky Mineral scase (supra), since above decision has been rendered on basis of particular fact that "the assessee had business of mining of limestones and marbles blocks and thereafter cutting and sizing same". 35. facts of this case are that assessee is producing tiles and slabs after purchasing marble from mine owners. What is sold in market inLucky Minerals case (supra) is raw material of present assessee, who purchases such slabs/blocks which are excavated from mines and cut to size. 36. So, clearly facts of case ofLucky Minerals(supra) are entirely different from facts of assessee. Where process of assessee inLucky Mineralsends, process of this assessee starts. When facts of two cases are entirely different, ratio ofLucky Minerals cannot apply to this case. But decision ofLucky Mineralshas laid down certain tests to come to conclusion as to whether activity can be said to be manufacturing/ production activity or not. In order to test this case on above touchstone, we will have to see, as to whether, new thing or article which has its own character, use and name has been manufactured by this assessee or not ? 37. steps which are taken by assessee after purchasing blocks from mines to produce end product of tiles/slabs are mentioned in our earlier part of order. Department has not at all contested these processes. end result is tile of different size, shape and name, there is no doubt about same. price is altogether different and market is altogether different. This product is known by different name. So, only test remains that if new and distinct thing or article is produced in process which is different from raw material used by this assessee. 38. Our answer is, yes, new and distinct thing has been produced. distinct and new thing does not mean that there should be physical or chemical change and then and only then it would be new and distinct thing or article. Hon ble Court inLucky Mineral scase (supra) relied on decision of Madras High Court in case ofCIT vs. M.R. Gopal (1965) 58 ITR 598 (Mad), facts of case were that assessee converted boulders into small stones, i.e., chips of various sizes, with aid of machinery. This activity was held to be manufacturing activity. Hon ble Rajasthan High Court has not disputed or dissented from ratio of above decision of Madras High Court. It has only stated (that) facts of case ofLucky Minerals(supra) were entirely different. Meaning thereby, when boulder is converted into small stones of various sizes, it is manufacture. Thus, it does not mean that constituent of raw material should also change altogether. There should not be chemical change. In way Hon ble High Court has accepted ratio of Madras High Court. What happens in this case, big blocks are converted into tiles/slabs of different sizes by various treatments. It is not simple case of conversion into small stones, rather various treatments including filling and chemical treatments in addition to polishing, etc. are undertaken and thereafter different commodity having distinct name and character, use, value and different market are emerged. So, definitely new thing or article is produced by assessee. 39. decision ofLucky Mineral(supra) is thus not applicable to this case as facts are entirely different. ratio of case is (sic) applicable to facts of this case which supports claim of assessee. Since new, distinct article or thing, having different character, name and use is produced in process undertaken by present assessee. 40. other decision relied by Hon ble High Court,inter alia, inLucky Minerals(supra) is of theCIT vs. S.L. Agarwal & Co.(supra). In that case activity of breaking up of huge iron ingots into small pieces was held to be manufacturing activity. We also draw support from this decision. As in this case, big pieces are transformed into tiles, etc. 4 1 . Now, we would revert to case of theDy. CST vs. Pio Food Packers(supra), on which Hon ble Rajasthan High Court has heavily relied and even borrowed language and learned Departmental Representative has also relied on that decision. copy of this decision is placed on pages Nos. 95-97 of paper book of assessee. 4 2 . Hon ble Supreme Court, was dealing with case where preparation of pineapple slices was questioned as manufacturing activity within meaning of s. 5A(1)(a) of Kerala General Sales-tax Act, 1963. In that case assessee used to purchase pineapples fruit and consumed after washing and removing inedible portion, end crown, skin, inner core and thereafter sliced fruit and sold in market after filling into cans. 43. Hon ble Supreme Court held as under : "Sec. 5A(1)(a) of Kerala General Sales-tax Act envisages consumption of commodity in manufacture of another commodity. goods purchased should be consumed, consumption should be in process of manufacture, and result must be manufacture of other goods. There are several criteria for determining whether commodity is consumed in manufacture of another. Generally prevalent practice whether article produced is regarded in this trade by those who deal in it as distinct in identity from commodity involved in its manufacture. Commonly, manufacture is end result of one or more processes through which original commodity is made to pass. nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps different kind of processing at each stage. With each process suffered from original commodity experiences change. But it is only when change, or series of changes, take commodity to point where commercially it can no longer be regarded as original commodity but instead is recognized as new and distinct article that manufacture can be said to take place. Where there is no essential difference in identity between original commodity and processed article it is not possible to say that one commodity has been consumed in manufacture of another. Although it has undergone degree of processing, it must be regarded as still retaining its original identity." 44. facts ofLucky Minerals(supra) and of this case are entirely different but ratio of this decision can be applied to present assessee s case for same reasons, as we have mentioned while discussingLucky Mineral scase (supra) in above paras. tests laid down by this decision are fulfilled by this assessee. 45. decision relied by learned Authorised Representative, which are referred to in early part of this order along with held portion are clearly applicable to facts of this case. These cases are : 1. CIT vs. Best Chem & Lime Stone Industries (P) Ltd. (supra), 2. CTO vs. Bhonri Lal Jain (supra), 3. CTO vs. Girota Silica Udyog (supra), 4. Union of India vs. Delhi Cloth & General Mills (supra), 5.CTO vs. Prakash Udyog(supra). There is no need to repeat held portion again. 46. So, in light of above discussion we can safely conclude that treatment given to raw material by this assessee by various steps which are given below, produce new article or thing. steps are : Step (i) marble blocks excavated/extracted by mine owners being in raw uneven shapes have to be properly sorted out and marked; Step (ii) such blocks are then processed on single blade/wire saw machines using advanced technology to square them by separating waste material; Step (iii) squared up blocks are sawed for making slabs by using gang- saw machine or single/multi-block cutter machine; Step (iv) sawn slabs are further reinforced by way of filling cracks by epoxy resins and fiber netting; Step (v) slabs are polished on polishing machine; slabs are further edge cut into required dimensions/tiles as per market requirement in perfect angles by edge cutting machine and multi-disc cutter machines; Step (vi) Polished slabs and tiles are buffed by shiner. 47. new article or thing is produced by name of marble tiles and marble slabs which are different and entirely distinct in terms of name, character, use, and market value and appearance. So, activity of assessee is manufacture/production activity. We heavily draw support fromMysore Mineral Ltd.(supra) decision of Hon ble Karnataka High Court as well as Hon ble Supreme Court, which is later decision and which we have discussed in earlier part of our order. We also draw support from fact that appellant-company is being consistently regarded as manufacturer/producer by various Government Departments and agencies. evidences are placed on record, in this regard, which we have discussed each and every such evidence, in earlier part of our order along with page numbers. These facts have not been controverted by Department. So, facts of this case and theLucky Minerals(supra) and others relied by Department are entirely different. But ratio of these decisions, when applied, it speaks in favour of this assessee. 48. We agree with learned Authorised Representative that case of Karnataka High Court inDy. CIT vs. Mysore Minerals Ltd.(supra) wherein it has been held that process of extracting granite and cutting it into slabs of various sizes and polishing them was one of manufacturing and production and accordingly investment allowance under s. 32A was admissible on plant and machinery installed for said purpose. SLP against same was dismissed by Hon ble Supreme Court. Their Lordships of Hon ble Supreme Court dismissed petition filed by Revenue dt. 7th Dec., 2000 of (against) Hon ble Karnataka High Court(2001) 167 CTR (Kar) 11 : (2001) 250 ITR 730 (Kar)(supra) whereby High Court had dismissed Department s appeal holding that assessee was entitled to investment allowance under s. 32A of Act on machinery, such as earth-moving equipment, crane oil engines, pumps and machinery foundations for gang-saws employed in manufacture or production of article or thing and decision of Hon ble Supreme Court in case ofCIT vs. N.C. Budharaja & Co. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC)had not overruled decision of High Court inMysore Minerals Ltd.(supra). decision reported in(2002) 254 ITR (St) 274is obviously later judgment of Hon ble Supreme Court than theLucky Minmat s case(supra) and since facts of theLucky Minmat scase are not identical to facts of this case. 49. InN.C. Budharaja scase (supra) it was held at p. 415 as under : "Commonly, manufacture is end result of one or more processes through which original commodity is made to pass. nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps different kind of processing at each stage. With each process suffered, original commodity experiences change. But it is only when change, or series of changes, take commodity to point where commercially it can no longer be regarded as original commodity but instead is recognised as new and distinct article that manufacture can be said to take place. word production or produce when used in juxtaposition with word manufacture takes in bringing into existence new goods by process which may or may not amount to manufacture. It also takes in all by- products, intermediate products and residual products which emerge in course of manufacture of goods. next word to be considered is articles , occurring in said clause. What does it mean ? word is not defined in Act or Rules. It must, therefore, be understood in its normal connotation sense in which it is understood in commercial world. It is equally well to keep in mind context since word takes its colour from context. word articles is preceded by words it has begun or begins to manufacture or produce. Can we say that word articles in said clause comprehends and takes within its ambit dam, bridge, building, road, canal and so on ? We find it difficult to say so. Would any person who has constructed dam say that he has manufactured article or that he has produced article ? Obviously not. If dam is article, so would be bridge, road, underground canal and multi-storied building. To say that all of them fall within meaning of word articles is to overstrain language beyond its normal and ordinary meaning. It is equally difficult to say that process of constructing dam is process of manufacture or process of production. It is true that dam is composed of several articles; it is composed of stones, concrete, cement, steel and other manufactured articles like gates, sluices, etc. But to say that end product, dam, is article is to be unfaithful to normal connotation of word. dam is constructed; it is not manufactured or produced. expressions manufacture and produce are normally associated with movables articles and goods, big and small but they are never employed to denote construction activity of nature involved in construction of dam or for that matter bridge, road or building. decisions of Bombay High Court inCIT vs. N.U.C. (P) Ltd. (1980) 126 ITR 377 (Bom)and inCIT vs. Shah Construction Co. Ltd. (1982) 30 CTR (Bom) 245 : (1983) 142 ITR 696 (Bom), relied upon by Sri Murthy, are no doubt not decisions rendered under s. 80HH or under s. 84 they arose under relevant Finance Acts, question being whether assessees were industrial companies but they do contain observations which tend to support stand of Revenue." 50. Again, ratio of this decision, as we have mentioned above, is not of any help to Department, rather, it helps assessee s case. production as well as manufacturing activities are so intermingled and intermixed that difference between two is very subtle and very delicate, difference is of nuances. So, sometimes, it is very difficult to differentiate manufacture and production. In any case, if activities are not exactly taken to be manufacturing activity, then activities of assessee are definitely activities of production. For that matter, learned Authorised Representative has relied on decision of Third Member in case ofKirloskar Electricals vs. Dy. CIT (2003) 80 TTJ (Pune)(TM) 436 : (2003) 87 ITD 264 (Pune)(TM)but as we have held that activities of assessee are manufacturing activities, so production and manufacturing can be taken as substitute for these two activities in assessee s case because every manufacturing activity involves production. 5 1 . To sum up our findings we are satisfied that judgment of Hon ble Supreme Court in case ofLucky Minmat(supra) does not apply to facts of present case inasmuch as, finding of facts recorded in that case by Tribunal as reproduced by Hon ble Supreme Court, which we have also reproduced in our earlier part of order, clearly reveals that in Hon ble Supreme Court s case, it was dealing with case of mine owner who was doing cutting work mainly for purpose of taking same to market for selling same. case of mine owner cannot be equated with case of factory owner, who is involved in comprehensive/production process. present case is not that of mine owner, but of factory owner who is engaged in activity of manufacturing which undergoes several stages through different technical procedures with help of set up exhaustive plant and machinery in factory. raw material of assessee is marble blocks purchased from mine owners and assessee transforms this raw material into entirely different finished goods in form of marble slabs/marble tiles. raw material and finished goods of this assessee are entirely different and distinct in terms of their names, characteristics, uses, identity, form, appearance, value as well as market in which they are been dealt with. In our opinion ratio ofLucky Minmat scase (supra) is of no help to Revenue, but in way, helps case of assessee which we have mentioned above. Further, decision of Hon ble Karnataka High Court in case ofCIT vs. Mysore Minerals Ltd.(supra) helps assessee and Revenue s SLP stands dismissed by Hon ble Supreme Court vide its order dt. 18th Jan., 2002 reported at(2002) 254 ITR (St) 278. Thus, we have no hesitation in holding that production process employed by assessee involves manufacturing activity. Accordingly, it is entitled to deduction under s. 80-IA of Act as per law. We are also satisfied that word produced even wider in meaning and, therefore, even on that count, assessee s claim under s. 80-IA deserves to be allowed. AO is accordingly directed to allow claim of assessee under s. 80-IA of Act in both years under consideration. In result, appeals of assessee are allowed. 24th Nov., 2004 joginder pall, a.m. : I have gone through proposed order of my learned Brother (JM). I have not been able to persuade myself to agree with view taken by my learned Brother, I, therefore, proceed to write my own order. 2. facts of case and submissions of both parties have been discussed in detail by my learned Brother in proposed order. Therefore, I do not consider it necessary to again repeat same in this order. However, for sake of brevity, it may be mentioned that assessee has claimed deduction under s. 80-IA on ground that it is industrial undertaking engaged in business of sawing of marble blocks into slabs and tiles. According to assessee, various operations carried on by it amount to manufacturing activity. various processes involved in sawing of marble blocks into slabs and tiles as explained by assessee are as under : (i) Marble blocks purchased from mine owners being in raw uneven shapes have to be properly sorted out and marked; (ii) Such blocks are then processed on single blade/wire saw machines using advanced technology to square them by separating waste material. (iii) Squared up blocks are sawed for making slabs by using gang-saw machine or single/multi-block cutter machine. (iv) sawn slabs are further reinforced by way of filling cracks by epoxy resins and fiber netting; (v) slabs are polished on polishing machine; slabs are further edge cut into required dimensions/tiles as per market requirement in perfect angles by edge cutting machine and multi-disc cutter machines; (vi) Polished slabs and tiles are buffed by shiner. Now, main question that requires to be decided is whether above activities/processes undertaken by assessee for converting marble activities/processes undertaken by assessee for converting marble blocks into marble slabs and tiles amount to manufacturing of goods and articles. There is no dispute about fact that assessee would be entitled to deduction under s. 80-IA only if it is found to be engaged in manufacturing or production of article. expression "manufacturing of articles" has not been defined in Act. Therefore, one has to necessarily draw assistance from ratio of various decisions as to what amounts to manufacturing activity. This issue came to be considered by Hon ble Supreme Court in case ofCIT vs. N.C. Budharaja & Co. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC)where Hon ble Supreme Court has considered issue as to whether process of constructing dam is process of manufacture or process of production. Their Lordships of Hon ble Supreme Court have observed as under at pp. 415 of 204 ITR (headnotes) : "The word production has wider connotation than word manufacture . While every manufacture can be characterized as production, every production need not amount to manufacture. word production or produce , when used in juxtaposition with word manufacture , takes in bringing into existence new goods by process which may or may not amount to manufacture. It also takes in all by-products, intermediate products and residual products which emerge in course of manufacture of goods (see pp. 423D, H, 424A). expressions manufacture and produce are normally associated with movable articles and goods, big and small, but they are never employed to denote construction activity of nature involved in construction of dam or building (see p. 424E, F). word article is not defined in IT Act or Rules. It must, therefore, be understood in its normal connotation sense in which it is understood in commercial world. It is equally well to keep in mind context, since word takes its colour from context. word article in s. 80HH(2)(i) cannot comprehend or take within its ambit dam, bridge, building, canal and so on (see p. 424-A-C). It is difficult to say that process of constructing dam is process of manufacture or process of production. dam is constructed, it is not manufactured or produced (see p. 424D, E). principle of adopting liberal interpretation which advances purpose and object of beneficent provisions cannot be carried to extent of doing violence to plain and simple language used in enactment. It would not be reasonable or permissible for Court to rewrite section or substitute words of its own for actual words employed by legislature in name of giving effect to supposed underlying object. After all, underlying object of any provision has to be gathered on reasonable interpretation of language employed by legislature (see p. 426A-C)." 2A. issue as to what constitutes manufacturing activity also came to be considered in case ofDy. CST vs. Pio Food Packers 46 STC 63, where apex Court held that generally prevalent test is whether article produced is regarded in trade, by those who deal in it, as distinct in identity from commodity involved in its manufacture. No doubt such commodity undergoes several processes from initial stage to final stage and undergoes change, but it is only when change or series of changes, take commodity to point where commercially it can no longer be regarded as original commodity but instead is recognized as new and distinct article that manufacture can be said to take place. Where there is no difference in identity between original commodity and processed article, it is not possible to say that one commodity has been consumed in manufacture of another. It would still be regarded retaining its original identity. 2B. This issue was again considered by Hon ble Supreme Court in case ofUnion of India vs. Delhi Cloth & General Mills (1977) ELT (J) 199where it was observed that manufacture implies change, but every change in raw material is not manufacture although every change of article is result of treatment, labour or manipulation. In order to make change amount to "manufacture" something more is necessary and that something more is such transformation as it brings into existence new and different article having distinct name. 3 . Now case of assessee requires to be decided in light (of) tests laid down by Hon ble Supreme Court in above cases. In this case, Revenue has relied on judgment of Hon ble Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT (2000) 162 CTR (SC) 404 : (2000) 245 ITR 830 (SC)where Hon ble Supreme Court upheld judgment of Hon ble Rajasthan High Court in case ofCIT vs. Lucky Mineral (P) Ltd. (1996) 134 CTR (Raj) 541 : (1997) 226 ITR 245 (Raj). It would, therefore, be in fitness of things to first refer to judgment of Hon ble Rajasthan High Court in above-mentioned case. facts of case before Hon ble High Court were that assessee was mine owner. assessee extracted limestones and marble boulders and cut them into marble slabs. issue raised before Hon ble High Court was whether business activity of assessee amounted to manufacture or production for purpose of deduction under s. 80HH. Their Lordships of Hon ble Rajasthan High Court considered various judgments including its own judgments in writ petitions and took view that conversion of agglomerated marble blocks into marble slabs and tiles did not amount to manufacture or production of articles. In this regard, Hon ble Rajasthan High Court referred to its own judgments in cases ofPolar Marmo Agglomerates Ltd. vs. Union of India 1994 (73) ELT 536 (Raj), Amrutsheele vs. Union of India (Civil Writ Petn. No. 1654 of 1982, decided on 22nd July, 1987), Jain Marbles vs. Union of India (Civil Writ Petn. No. 869 of 1992, decided on 26th May, 1988), Kasat Enterprises vs. Union of India (Civil Writ Petn. No. 133 of 1983, decided on 7th Nov., 1990)andJ.S. Marbles vs. Union of India (Civil Writ Petn. No. 479 of 1985, decided on 19th July, 1990). Besides, Hon ble High Court has also referred to several judgments relating to Central Excise where same view was taken and it was held that conversion of marble blocks into marble slabs and tiles did not amount to manufacture or production of things. It would be relevant to reproduce herebelow relevant extracts from above judgment at pp. 250 to 252 of 226 ITR : "The above discussion leads us to hold that manufacture implies change, but as cautioned by Supreme Court, every change is not manufacture although every change in article is result of treatment, manufacture although every change in article is result of treatment, labour and manipulation. To bring about change qualifying as manufacture something more is necessary and that something is transformation i.e. new and different article, having distinct name, character or use, must emerge. This view of ours, we think, is in conformity with views expressed by Court in case ofPolar Marmo Agglomerates Ltd. 1994 (73) ELT 536 (Raj). In that case question involved was whether conversion of agglomerated marble block into agglomerated marble slabs/tiles amounted to "manufacture" or not. Court considered question in great detail and finally, making reference to number of decisions of this Court in different cases, held as under in para 16 of decision : 16. It has been held in following decisions of Court that conversion of marble blocks into marble slabs/tiles by sawing does not involve manufacturing process : 1.Amrutsheele vs. Union of India,Civil Writ Petn. No. 1654 of 1982, decided on 22nd July, 1987, 2.Jain Marbles vs. Union of India,Civil Writ Petn. No. 869 of 1992, decided on 26th May, 1988, 3.Kasat Enterprises vs. Union of India,Civil Writ Petn. No. 133 of 1983, decided on 7th Nov., 1990, and 4.J.S. Marbles vs. Union of India,Civil Writ Petn. No. 479 of 1985, decided on 19th July, 1990. Similar view has been taken inCCE vs. Fine Marbles & Minerals (P) Ltd. 1985 (22) ELT 128, Sangmermer India (P) Ltd. vs. CCE 1989 (42) ELT 725 (Trib)andAssociated Stone Industries (Kota) Ltd. vs. CCE 1992 (60) ELT 639. It is mentioned inAssociated Stone Industries (Kota) Ltd. vs. CCE(supra), para 3, that Revenue filed appeal against order given inCCE vs. Fine Marbles(supra) and Supreme Court dismissed it. Similar will be position for conversion of agglomerated marble blocks into agglomerated marble slabs/tiles." Following and borrowing language fromDy. CST vs. Pio Food Packers(supra), we conclude that although at some point processing and manufacturing will merge, but where commodity retains continuing substantial identity through processing stage we cannot say that it has been manufactured. We find same position in instant case. We have statedin extensothe facts found by Tribunal.Those facts are that activities of assessee-company consist of excavating limestone and marble boulders and after cutting boulders into slabs, selling them. After cutting boulders into slabs, may be with aid of machinery, original commodity retains continuing substantial identity through processing stage, carried out by assessee-company.It has not been found by Tribunal, as was successfully tried by Mr. Garg to assert, that assessee-company converts boulders into powder, chips or any other articles commercially known by another name and used as different article. On such facts, as are stated by Tribunal to us, we opine that activities carried on by assessee-company did not amount to manufacture and, therefore, it was not entitled to benefit of s. 80HH of IT Act." (emphasis, italicised in print, is mine) Thus, from above discussion, it is very clear that while deciding this matter, Hon ble High Court has taken into account various judgments of same Court and Hon ble Supreme Court where view taken was that conversion of marble blocks into marble slabs/tiles does not amount to manufacture or production of articles. According to learned counsel for assessee, facts of present case are distinguishable from facts of case ofCIT vs. Lucky Mineral (P) Ltd.(supra). learned counsel has contended that facts in case ofLucky Minmat (P) Ltd.were that assessee was mine owner and extracted marble boulders and cut them into slabs. But in this case, assessee is not mine owner. assessee purchased marble blocks from mine owners and then converted them into marble slabs/tiles. Thus, according to assessee, various processes carried on by assessee for converting them into marble slabs/tiles amounted to manufacture and production of goods. However, I do not agree with this view for reason that even if facts of case before High Court related to for reason that even if facts of case before High Court related to extraction of marble boulders and cutting them into marble slabs, yet cases relied on by Hon ble High Court and as discussed above also related to subsequent process of cutting marble blocks into marble slabs/tiles. Here also activities of assessee are same. assessee is buying marble blocks and converting them into marble slabs/tiles through sawing operations including polishing of same. These operations are essentially cutting operations. These are not crushing operations. Therefore, original commodity i.e. marble blocks retain same identity but known as marble slabs/tiles. Thus, in my opinion above judgment of Rajasthan High Court is squarely applicable to facts of present case. 4 . This judgment was subject-matter of appeal before Hon ble Supreme Court where question raised before Hon ble Supreme Court was as under : "Whether, on facts and in circumstances of case, Tribunal was justified in holding that business activity of assessee is clearly in nature of manufacturing or production and, therefore, it is entitled for relief under s. 80HH of IT Act, 1961 ?" During course of hearing before Hon ble Supreme Court, assessee relied on judgment of Hon ble Rajasthan High Court in case ofCIT vs. Best Chem & Limestone Industries (P) Ltd. (1993) 113 CTR (Raj) 298 : (1994) 2 10 ITR 883 (Raj). Hon ble Supreme Court found that facts of present case were distinguishable from facts of case ofBest Chem & Limestone Industries (P) Ltd.(supra) because in that case activities included converting limestone and lime dust by stone crusher. It was noticed that crushing of stone is different from that of cutting activities because crushing activity results in loss of identity of original article and brings into existence new, different and distinct article. These were not facts of case where assessee was engaged in converting marble blocks into marble slabs/tiles because activities were only cutting activities. Therefore, Hon ble Supreme Court upheld order of Hon ble Rajasthan High Court where it was held that extraction of limestone and marble boulders and cutting them into blocks does not amount to manufacture or production of articles. Hon ble Supreme Court has given detailed reasons for upholding Hon ble Rajasthan High Court s orders and is, therefore, speaking order. same is binding on all authorities in country. As mentioned earlier, judgment of Hon ble Rajasthan High Court which was upheld by Hon ble Supreme Court also covered cases where activities undertaken by assessee were same as that of assessee. Therefore, in my view judgment of Hon ble Rajasthan High Court and Hon ble Supreme Court in aforesaid cases are fully applicable to facts of present case. Now nature of activities undertaken by assessee does not result into new item which could be categorized different from original commodity. item made by assessee is known as marble tiles or marble slabs. Mere suffixing of blocks and slabs does not change identity, character and nature of article. Still end product is known as marble. Therefore, same cannot be considered as new item different from original commodity. Hence, activities carried on by assessee cannot be regarded as manufacture or production. 5 . expression "manufacture" was also considered by Tribunal, Calcutta Bench in case ofJai Mica Supply Co. (P) Ltd. vs. Asstt. CIT (2003) 79 TTJ (Kol)(TM) 953 : (2003) 86 ITD 93 (Kol)(TM). In that case assessee had claimed deduction under s. 80HHC in respect of export of fabricated mica products. question was whether items manufactured by assessee continued to retain character of minerals i.e. items prohibited under IT Act for allowing deduction or it was altogether new and distinct item. case of assessee was that various activities undertaken by assessee resulted into bringing into existence commodity which was commercially different and distinct. Therefore, it was contended that assessee was entitled to deduction under s. 80HHC. Tribunal observed that mica blocks were processed and out of same, items like fabricated mica, silvered mica, plates were made. However, Tribunal held that such items continued to retain character of minerals and were not items distinct and different from original commodity. Tribunal also illustrated point with example of pure gold. It noted that pure gold could be converted into gold biscuits, gold coins, gold bars, gold sheets, gold threads and gold dust, etc. Though all these items were made of gold and were having different commercial name, yet most of these items are recognised as nothing but pure gold in commercial world. Therefore, it could still be regarded as pure gold. However, when such pure gold is converted into gold ornaments after mixing copper, diamonds, etc., same becomes separate item distinct in character and commercial use. Thus, it was held that mere commercial name by itself is not determinative factor for ascertaining as to whether fabricated mica, silvered mica plate, etc. are recognized something other than minerals in commercial world merely because some words have been prefixed and suffixed to word mica . When we apply ratio of aforesaid decision, we find that items finally produced by assessee i.e. marble slabs/tiles from marble blocks still retain same identity, character as of marble blocks. Mere suffixing name with marble slabs/tiles would not alter identity, character of original commodity i.e. marble blocks. Therefore, it could not be said that assessee is engaged in business of manufacture or production of articles or things. 6. learned counsel for assessee has strongly relied on decision of Karnataka High Court in case ofDy. CIT vs. Mysore Minerals Ltd. (2001) 167 CTR (Kar) 11 : (2001) 250 ITR 730 (Kar)where Hon ble High Court has held that assessee engaged in business of extracting granite from quarry, converting it into slabs, cutting and polishing them amount to manufacturing activity. claim of assessee is that this judgment is applicable to facts of present case. I am unable to subscribe to such view. reasons for same are as under : (i) In case ofMysore Minerals Ltd.(supra), activity involved is extracting of granite stone from quarry and then further converting it into slabs, cutting and polishing them. Thus original commodity found in mines was different i.e. stones from final end product. All these operations were carried on by assessee itself. But in this case, assessee is not extracting marble from mines. assessee is purchasing only marble block from mine owners. Moreover, operations involved in converting granite into granite slabs are far more sophisticated as compared to converting marble blocks into marble slabs/tiles. These processes have been explained by Hon ble Madras High Court in case ofCIT vs. Pooshya Exports (P) Ltd. (2003) 179 CTR High Court in case ofCIT vs. Pooshya Exports (P) Ltd. (2003) 179 CTR (Mad) 557 : (2003) 127 Taxman 369 (Mad)which are as under : "2. assessee is company doing business of mining and quarrying of granite stones and exporting them as finished goods to various countries. Before exporting these granites stonesas per specification of customers, stones undergoes various types of manual and machinery processes, such as, removal of overburden of quarry by manual process, location and drilling of boulders, eschewing of waste, drilling of holes, lifting these granite logs either manually or with help of cranes, dressing, shaping, sizing, colouring and giving uniform grains to these stones, etc. and process also involved removing of certain natural flaws such as air-pores, veins, crakes, etc. in order to ensure quality of product. Certain chemical impurities are also required to be removed in special manufacturing process which requires special machines/ equipments, etc. like jet burners, block cutters, vertical and horizontal drilling machines, etc." (emphasis, italicised in print, is mine) It may be seen therefrom that such processes involve,inter alia, removal of chemical impurities through special manufacturing processes which require specialized machines/equipments, etc. like jet burners, block cutters, vertical and horizontal drilling machines, etc. Thus, granite stones i.e. original commodity is converted into granite slabs/tiles through sophisticated and complex processes. Therefore, those activities were held to be manufacture and production. These are not processes involved in present case. (ii) It is observed that Revenue had filed SLP against decision of Hon ble Karnataka High Court and as reported in(2002) 254 ITR (St) 254such SLP was dismissed without passing speaking order. However, Hon ble Supreme Court has not given any detailed reasons for same. But in case ofLucky Minmat (P) Ltd. vs. CIT(supra), Hon ble Supreme Court has dismissed SLP with reasons for upholding judgment of Hon ble Rajasthan High Court. Once Hon ble Supreme Court has given judgment with its own reasoning, such judgment is binding on all authorities in country. However, in case where Hon ble Supreme Court has only dismissed SLP without reasons, it could only mean that judgment of Hon ble High Court has been upheld. same would be binding on all authorities in particular State where matter was decided by Hon ble High Court. It would not be binding on authorities outside jurisdiction of Hon ble High Court. (iii) Further, judgment of Hon ble Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT(supra) was not brought to notice of Hon ble Supreme Court in case ofMysore Minerals Ltd.(supra). judgment of Rajasthan High Court which was also upheld by Hon ble Supreme Court was also not quoted before Hon ble Karnataka High Court. counsel has not drawn our attention to any judgment of Hon ble Supreme Court overruling judgment of Hon ble Rajasthan High Court. (iv) Moreover, judgment of Hon ble Karnataka High Court is with reference to deduction under s. 32A whereas judgment in case ofLucky Minmat (P) Ltd.is with reference to deduction under s. 80HH i.e. where conditions are same as involved in present case. (v) While deciding case ofCIT vs. Lucky Mineral (P) Ltd.(supra), Hon ble High Court has considered various judgments on issue whether conversion of marble blocks into marble slabs/tiles amounts to manufacture or production of articles. However, Hon ble High Court decided issue against assessee and in favour of Revenue. This judgment has been upheld by Hon ble Supreme Court. Therefore, facts of present case are identical to facts of case relied upon by Hon ble Rajasthan High Court in aforesaid cases and are directly applicable to this case. Therefore, judgment of Hon ble Rajasthan High Court is binding on all authorities including Tribunal covered in its jurisdiction. 7. Thus, in light of these facts and circumstances of case, I am of considered opinion that activities undertaken by assessee for converting marble blocks into marble slabs and tiles do not amount to manufacture or production in view of judgment of Hon ble Rajasthan High Court in case ofCIT vs. Lucky Mineral (P) Ltd.(supra) and of Hon ble Supreme Court in case ofLucky Minmat (P) Ltd.(supra). Therefore, assessee is not entitled to deduction under s. 80-IA. Accordingly, order of CIT(A) does not merit any interference and all grounds of appeal of assessee for both assessment years are rejected. 8. In result, appeals of assessee are dismissed. m.a. bakshi, vice president (as third 31st May, member): 2006 captioned two appeals of assessee had come up for consideration before Jodhpur Bench of Tribunal. Since there was difference of opinion between learned Members constituting Division Bench in regard t o entitlement of assessee to deduction under s. 80-IA, Hon ble President has nominated me as Third Member in regard to point of difference which is as under : "Whether activities undertaken by assessee tantamount to manufacture/production which entitles it relief under s. 80-IA or not ?" 2. I have heard both parties and perused record including separate orders of learned Members of Division Bench. 3 . assessee is dealing in marble slabs and tiles. company purchases marble blocks from miners. said blocks are sawn into slabs and tiles by mechanical process. slabs and tiles are polished and sold in market. company had set up various units from time to time for doing above business. In earlier years, deduction was claimed under s. 80HH as industrial undertaking engaged in production and manufacture of marble slabs, tiles, etc. and same was allowed to assessee in respect of unit No. 1 and unit No. 2. assessee had set up 3rd and 4th units subsequently. Deduction in respect of 3rd unit was also allowed to assessee in earlier years. So, however, deduction was denied to assessee for asst. yrs. 2000-01 and 2001-02 on ground that it was not engaged in business of production or manufacture of any article or thing. CIT(A) has confirmed disallowance of deduction. On appeal, whereas learned JM held that assessee was entitled to deduction under s. 80-IA, learned AM relying upon decision of Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT (2000) 162 CTR (SC) 404 : (2000) 245 ITR 830 (SC), held that assessee was not entitled to such deduction. 4 . Before me, learned counsel for assessee contended that assessee was engaged in production or manufacture of article or thing within meaning of s. 80-IA. It was pointed out that whereas mine owner excavates marble blocks from mines after necessary cuttings, sells same to various manufacturers for varied uses, assessee purchases marble blocks from miners and by mechanized process cuts blocks into slabs and tiles and after buffing and polishing sells same in market. According to learned counsel, marble blocks are transformed into marble slabs and tiles and therefore, different commodity emerges after process of cutting, buffing and polishing. learned counsel further pointed out that assessee is registered as small-scale unit with Department of Industries. Government of Rajasthan has also found it eligible for incentive which is granted for encouraging industrial development in State. excise duty is also paid on products manufactured by assessee. Sales-tax incentive is also granted to assessee for purpose of encouraging industrial development in State. Learned counsel further pointed out that in respect of unit No. 3, deduction was allowed to assessee in earlier years. So, however, in 2000-01, deduction has been denied by taking different view without change in facts or circumstances of case. It was further contended that decisions cited on behalf of Department before Bench are distinguishable on facts. It was pointed out that in case ofLucky Minmat (P) Ltd. vs. CIT(supra), assessee was mine owner extracting marble blocks from quarries. cutting of blocks into smaller blocks was held not to involve process of manufacture or production of article or thing. According to learned counsel, assessee is engaged in business of converting marble blocks into marble slabs and tiles by mechanical process. decision of Hon ble Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT(supra) is accordingly claimed to be not applicable to this case. It was further pointed out that issue is covered in favour of assessee by decision of Karnataka High Court in case ofDy. CIT vs. Mysore Minerals Ltd. (2001) 167 CTR (Kar) 11 : (2001) 250 ITR 730 (Kar). Karnataka High Court, according to learned counsel, has held that extraction of granite, cutting same into slabs and tiles and selling same after buffing and polishing amounts to production and manufacture of article or thing and, therefore, assessee was entitled to deduction under s. 80-IA. It was pointed out that Hon ble Supreme Court in case ofCIT vs. Sesa Goa Ltd. (2004) 192 CTR (SC) 577 : (2004) 271 ITR 331 (SC), has confirmed decision of Karnataka High Court in case ofDy. CIT vs. Mysore Minerals Ltd.(supra) and accordingly said decision is applicable in respect of marble as well. It was pointed out that Hon ble Supreme Court has held process of extracting, cutting and polishing amount to production of article or thing. 5. Reliance was also placed on decision of Calcutta High Court in case ofAndaman & Nicobar Islands Forest & Plantation Development Corporation Ltd. vs. CIT (2005) 198 CTR (Cal) 76 : (2006) 280 ITR 118 (Cal)in support of contention that sawing of timber into planks, etc. amounts to production of article or thing. Reliance was also placed on decision of Allahabad High Court in case ofCIT vs. Shiv Oil & Dall Mill (2006) 281 ITR 221 (All), wherein oil refining has been held to amount to manufacture. Reliance was also placed on decision of Supreme Court in case ofKores India Ltd. 2004 (174) ELT 7 (SC), wherein cutting of ribbon from big rolls into small rolls and selling same after winding on pullies has been held to amount to production of article or thing. According to learned counsel, learned JM has rightly held activities carried on by assessee amount to at least production of article or thing. learned AM has not dealt with this issue at all, contended learned counsel for assessee. Since assessee would be entitled to deduction even if it is engaged in production of article or thing, which may not amount to manufacture, deduction is permissible to assessee, it was pleaded before me. 6 . learned standing counsel for Department, on other hand, heavily relied upon decision of Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT(supra). Reliance was also placed on decision of Rajasthan High Court in case ofCIT vs. Lucky Mineral (P) Ltd. (1996) 134 CTR (Raj) High Court in case ofCIT vs. Lucky Mineral (P) Ltd. (1996) 134 CTR (Raj) 541 : (1997) 226 ITR 245 (Raj), to support contention that assessee is not engaged in production or manufacture of article or thing. learned standing counsel has also relied upon written submissions and according to him, decision of Supreme Court in case ofCIT vs. Sesa Goa Ltd.(supra), is inapplicable to facts of this case insofar as assessee in that case was engaged in extraction of ore which was considered to amount to production of article or thing. Relying upon decision of Supreme Court in case ofCIT vs. N.C. Budharaja & Co. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC), it was contended that assessee does not fall within category of manufacturers under IT Act, 1961. mere fact that it has been recognized as industrial undertaking under different statutes is not enough for grant of deduction to assessee. 7 . My attention was invited to written submissions and decisions cited therein to support contention that cutting, polishing, sizing marble does not amount to production or manufacture of article or thing. It was further contended that deduction allowed to assessee in earlier years was not bar for tax authorities to consider correctness of claim in year under appeal in accordance with law. 8. In counter-reply, learned counsel for assessee pointed out that decision of Supreme Court in case ofCIT vs. Sesa Goa Ltd.(supra), has not been read carefully by learned standing counsel insofar as in last para of judgment, decision of Karnataka High Court in case ofDy. CIT vs. Mysore Minerals Ltd.(supra), has been affirmed by Supreme Court. It was pointed out that in case ofMysore Minerals Ltd.(supra), Karnataka High Court has held that cutting of granite blocks into slabs and tiles and selling same after polishing amounts to production and manufacture of article and thing. It was accordingly pleaded that view taken by learned JM may be adopted in preference to view expressed by learned AM and assessee be held to be entitled to deduction under s. 80-IA. 9. I have given my careful consideration to rival contentions. issue involved in this appeal, as pointed out earlier, is as to whether assessee is engaged in business of manufacture or production of article or thing. assessee purchases marble blocks from mine owners. deduction claimed by assessee is under s. 80-IA falling under Chapter VI-A. said section as applicable for relevant assessment year provided for deduction out of gross total income to extent of 25 per cent of profits derived from industrial undertaking engaged in manufacture or production of article or thing. Whether conversion of marble blocks by sawing into slabs, tiles and polishing amounts to manufacture of article or thing is, in my view, covered against assessee by decision of Hon ble Supreme Court in case ofAman Marble Industries (P) Ltd. vs. CCE 2003 (157) ELT 393 (SC). In said case, their Lordships of Supreme Court held that cutting of marble blocks into slabs and polishing does not amount to manufacture of article or thing. Their Lordships of Rajasthan High Court, which in this case is jurisdictional High Court, in case ofCIT vs. Lucky Mineral (P) Ltd.(supra), had also occasion to consider issue as to whether assessee who was in business of mining of limestones and marble blocks and thereafter cutting and sizing same before being sold in market was entitled to deduction under s. 80HH of IT Act. In that case, it was held that assessee was not entitled to deduction under s. 80HH as cutting and sizing of marble blocks into marble slabs and polishing did not amount to manufacture and production of article or thing. As pointed out earlier, learned counsel for assessee has vehemently argued that said decision of Rajasthan High Court, which has been affirmed by Hon ble Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT(supra), is inapplicable in present case insofar as that was case of miner extracting marble blocks and selling same after cutting into smaller blocks to facilitate transportation. 10 . There appears to be some weight in said contention advanced on behalf of assessee insofar as assessee in case ofCIT vs. Lucky Minerals (P) Ltd.(supra) before Rajasthan High Court, assessee was miner. So, however, Hon ble Rajasthan High Court in case ofCIT vs. Lucky Minerals (P) Ltd.(supra), at p. 251 of judgment, has referred to its own decision in case ofPolar Marmo Agglomerates Ltd. vs. Union of India 1994 (73) ELT 536 (Raj). question involved in case ofPolar Marmo Agglomerates Ltd.(supra) was as to whether conversion of agglomerated marble slabs/tiles amounted to manufacture or not. Hon ble Court after making reference to following decisions held that conversion of marble blocks into marble slabs/tiles by sawing does not involve manufacturing process : 1.Amrutsheele vs. Union of India,Civil Writ Petn. No. 1654 of 1982, decided on 22nd July, 1987. 2.Jain Marbles vs. Union of India,Civil Writ Petn. No. 869 of 1992, decided on 26th May, 1988. 3.Kasat Enterprises vs. Union of India, Civil Writ Petn. No. 133 of 1983, decided on 7th Nov., 1990, and 4.J.S. Marbles vs. Union of India, Civil Writ Petn. No. 479 of 1985, decided on 19th July, 1990. In above cases also it was held by Rajasthan High Court that conversion of marble blocks into marble slabs/tiles by sawing does not involve manufacturing process. Thus, mere fact that decision in case ofLucky Minmat (P) Ltd.(supra), is in respect of mine owner does not help assessee in regard to ratio laid down by Hon ble High Court that cutting of marble blocks into marble slabs/tiles does not amount to manufacture. As pointed out earlier, even otherwise, Hon ble Supreme Court in case ofAman Marble Industries (P) Ltd.(supra) has also laid down principle of law that cutting of marble blocks into slabs and tiles and polishing does not amount to manufacture and, therefore, there is no escape from same. Even in case ofLucky Minmat(supra), their Lordships of Supreme Court held, "Conversion into lime and lime dust or concrete by stone crushers could legitimately be considered to be manufacturing process while mere mining of limestone and marble and cutting same before being sold in market does not amount to manufacturing of any article or thing". 1 1 . learned counsel for assessee has heavily relied upon decision of Supreme Court in case ofCIT vs. Sesa Goa Ltd.(supra), where extracting and processing of ore has been held to fall within ambit of word production . It has also been pointed out that Hon ble Supreme Court in said case has also affirmed decision of Karnataka High Court in case ofDy. CIT vs. Mysore Minerals Ltd.(supra). According to learned counsel, Karnataka High Court in case ofMysore Minerals Ltd.held that extracting granites from quarry, converting same into slabs/tiles, polishing and cutting before effecting sale of same amounts to production of article or thing. Further, said decision of Karnataka High Court having been affirmed by Hon ble Supreme Court squarely covers issue involved in present case, it was contended before me. 12. In case before me, assessee has purchased marble blocks and same have been cut to various sizes, part of which has been exported and part sold in India. It is also pertinent to mention that assessee is also engaged in doing job work of cutting marble blocks into marble slabs on payment of job charges. assessee also makes marble tiles by cutting marble slabs and polishing and buffing same. issue to be determined is as to whether decision of Hon ble Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT(supra), is applicable to facts of present case or decision of Hon ble Supreme Court in case ofCIT vs. Sesa Goa Ltd.(supra), or none is applicable. In case ofLucky Minmat (P) Ltd.,the assessee was mine owner, marble blocks had been cut into marble blocks and as such distinction in facts has got to appreciated insofar as what was excavated from mines was sold after cutting same into smaller blocks product remaining same. In case ofSesa Goa Ltd.(supra), their Lordships of Supreme Court held that mining activity for purpose of production of mineral ores would come within ambit of word production . Their Lordships referred to its decision in case ofCIT vs. N.C. Budharaja & Co.(supra), to hold that word production is much wider than word manufacture . following passage from judgment in case ofN.C. Budharaja & Co.was reproduced : "The word production has wider connotation than word manufacture . While every manufacture can be characterized as production, every production need not amount to manufacture.. word production or produce when used in juxtaposition with word manufacture takes in bringing into existence new goods by process which may or may not amount to manufacture. It also takes in all by- products, intermediate products and residual products which emerge in course of manufacture of goods." At p. 235, their Lordships of Supreme Court held as under : "We are, therefore, of opinion that extraction and processing of iron ore amounts to production within meaning of word in s. 32A(2)(b)(iii) of Act and, consequently, assessee is entitled to benefit of s. 32A(1) of Act. question whether High Court was correct in holding that activity did not amount to manufacture is left open." Affirming decision of Karnataka High Court in case ofCIT vs. Mysore Minerals Ltd.(supra), their Lordships of Supreme Court held as under : "The provision required to be construed in this appeal is s. 80-I of IT Act, 1961, relevant extract of which are substantially identical to provisions of s. 32A(2)(b)(iii) of IT Act, 1961, which have been construed by us in order delivered by us today inCIT vs. Sesa Goa Ltd.(Civil Appeal No. 7456 of 2004). Following decision inSesa Goa Ltd.(supra), civil appeal is dismissed." facts in case ofMysore Minerals Ltd.(supra) are that assessee was mine owner extracting granite from quarry, cutting and polishing same. Hon ble Karnataka High Court held that extracting granite from quarry and cutting it to various sizes and polishing was manufacturing or production of any article or thing and assessee was entitled to deduction under s. 80-I. Hon ble Supreme Court has affirmed decision of Hon ble Karnataka High Court to extent that activities of extraction of granite and selling same after cutting, buffing and polishing amounts to production. 1 3 . On perusal of two decisions of Hon ble Supreme Court, discussed above, it appears that mere extraction or excavation of marble blocks and cutting same into smaller blocks does not amount to manufacture or production of article or thing. Mere cutting of marble blocks into slabs may also not amount to manufacture or production of any article or thing. So, however, integrated activity of extracting granite, cutting same into slabs/tiles, polishing and selling end product in market would amount to production of article and thing (whether it amounts to manufacture has been left open by Supreme Court). In case of present assessee, activities carried on by them are not mining of marble slabs. assessee purchases marble blocks. said blocks are cut into various sizes to make marble slabs/tiles. So, however, marble tiles are sold after polishing as these are used mainly on floors/walls, etc. as finished product. In case ofCIT vs. Gogte Minerals (1996) 136 CTR (Kar) 499 : (1997) 225 ITR 60 (Kar), Hon ble Karnataka High Court held that mining operation carried on for excavating iron ore and sequestering same from other materials involved very big process and there was complete transformation of material from one form to another and that this amounted to manufacturing activity and consequently, assessee would be entitled to investment allowance on screening plant and electrical installations used in mining. In case ofHind Nippon Rural Industries vs. CIT (1993) 201 ITR 588 (Kar), Hon ble Karnataka High Court held that assessee purchasing granite blocks made on specifications stated by assessee and no quarrying was done by assessee, assessee mainly engaged in export of stones was not engaged in manufacturing process of goods. In case ofDy. CST vs. Pio Foods Packers 46 STC 63 (SC), their Lordships of Supreme Court held as under : "When pineapple fruit is processed into pineapple slices for purpose of being sold in sealed cans, there is no consumption of original pineapple fruit for purpose of manufacture and case does not fall within s. 5A(1)(a) of Kerala General Sales-tax Act, 1963. Although degree of processing is involved in preparing pineapple slices from original fruit, commodity continues to possess its original identity notwithstanding removal of inedible portions, slicing and thereafter canning it or adding sugar to preserve it." Their Lordships further held, "It is change or series of change taking commodity to point where commercially it can no longer be regarded as commodity to point where commercially it can no longer be regarded as original commodity but instead it is recognized as new and distinct article, then manufacturing can be said to take place". 14. In case ofUnion of India vs. Delhi Cloth & General Mills Ltd. 1977 (ELT) 199 (SC), it was held that manufacture implies change but every change in raw material is not manufacture although every change of article is result of treatment, labour and manipulation. In order to make change, manufacture something more is necessary and that something more is such transformation of production in bringing into (existence) new and different article having different name, character or use. 15. In case ofPolar Marmo Agglomerates Ltd. vs. Union of India(supra), it was held that agglomerated marble slabs/tiles made from crushed lumps/chips of naturally excavated marble and pigments and binding agents and agglomerated block sawn into required sizes was not different and distinct commodity from excavated marble blocks and, therefore, no manufacturing activity was involved in making product and hence same was not liable to duty under Central Excise and Salt Act. In case ofCIT vs. Pooshya Exports (P) Ltd. (2003) 179 CTR (Mad) 557 : (2003) 127 Taxman 369 (Mad), assessee-company was doing business of mining and quarrying of granite stones and exporting them as finished goods to various countries. AO disallowed assessee s claim for investment allowance on ground that no production or manufacturing activity was involved in process of mining and exporting granite blocks. Hon ble Madras High Court held that assessee was not entitled to investment allowance. 1 6 . On analysis of above decisions, it appears that where assessee is involved in integrated activity of mining of marble blocks and cutting marble blocks into slabs and selling slabs/tiles after polishing, product sold in market is different from ore extracted from mines and accordingly production can be said to be involved in process of mining. Mere cutting of marble blocks into slabs will not amount to any manufacture or production of article or thing. On other hand, extraction of marble blocks, cutting same into slabs/tiles and selling same after polishing would amount to production of article or thing (integrated activities). It will be pertinent to mention that mere cutting of granite blocks and selling same would not amount to production of article or thing insofar as no new article emerges on cutting of granite blocks. reasoning given by Bombay High Court in case ofCIT vs. Sesa Goa Ltd. (2004) 188 CTR (Bom) 120 : (2004) 266 ITR 126 (Bom), and later affirmed by Hon ble Supreme Court inCIT vs. Sesa Goa Ltd.(supra) would be relevant to appreciate distinction as under : "The ore has to be extracted or raised from earth in which it is embedded and has to be brought to surface, as article or thing. If that be t h e case, winning or extracting of ore would fall within expression production . Once it falls within expression production , assessee would be entitled to benefit under s. 32A of said Act. That being case, it would not be possible to interfere with view taken by Tribunal in all three appeals." While affirming decision of Bombay High Court, their Lordships of Hon ble Supreme Court also pointed out thatwhat is embedded in earth is something different than what is sold by assessee. (emphasis, italicised in print supplied) 17. At this stage, it may be relevant to point out that there is distinction between mineral and ore. term mineral though frequently applied to substances containing metals, in its proper sense includes all fossil bodies or matters dug out of mines. In its enlarged sense it comprises all substances which formed or have formed solid body of earth. There is difference in common and scientific parlance between mineral and ore, ore being compound of metal and some other substance. Ore is compound of metal and some other substance as oxygen, sulphur or arsenic called its mineralizer by which its properties are disguised or lost. As perOxford Dictionarya mineral is natural body destitute of organization or life. word is evidently derived from mine as being that which is usually obtained from mine but mineral bodies occur in three physical conditions of solid, liquid and gas and although term is more frequently applied to substances containing metals, in its proper sense it includes all fossil bodies or matters dug out of mines and is not confined to metals only, but primarily means all substances other than agricultural surface of ground which may be got for manufacturing or mercantile purposes, such as stone or clay, whether got from mine as word would seem to imply or by open working, and whether containing metallic substances or substances entirely non-metallic. decision of Supreme Court in case ofSesa Goa Ltd.(supra) has to be understood in light of above distinction. 1 8 . While explaining meaning of word production within meaning of s. 80J, Jammu & Kashmir High Court in case ofCIT vs. Abdul Ahad Najar (2001) 169 CTR (J&K) 273 : (2001) 248 ITR 744 (J&K)explained that conversion of standing trees into logs and planks amounts to production of article or thing. It has been explained that standing trees are different than logs and planks as these are not known as trees. Similar view has been taken by Calcutta High Court in case ofAndaman & Nicobar Islands Forest & Plantation Development Corporation Ltd.(supra). From these decisions also it clearly emerges that mere sawing of logs and planks by itself would not amount to production. So, however, process of cutting of trees and then converting same into logs and planks either manually or mechanically would amount to production of article or thing insofar as standing trees are different than logs and planks. On other hand, mere cutting and polishing does not amount to production or manufacture of article or thing, as in case ofCIT vs. Gem India Manufacturing Co. (2002) 172 CTR (SC) 615 : (2001) 249 ITR 307 (SC). In said case, their Lordships of Supreme Court held that cutting and polishing of uncut diamonds does not amount to production or manufacture of article or thing. 1 9 . On analysis of above decisions, it would be necessary to consider as to whether sawing of marble blocks into marble slabs and tiles with or without polishing amounts to production of article or thing. I have earlier pointed out that aforesaid activities do not amount to manufacture of article or thing. reference has been made by me to decision of Hon ble Supreme Court in case ofAman Marble Industries (P) Ltd. vs. CCE(supra), in which decision of Central Excise Tribunal was reversed by Hon ble Supreme Court. When matter came up before Tribunal in case Supreme Court. When matter came up before Tribunal in case ofAman Marble Industries (P) Ltd.(supra), one of Members had relied upon earlier decisions to hold that cutting of blocks and slabs into tiles was not process of manufacture or production of article or thing. However, contrary view was taken by one of Members of Tribunal and after reference to Third Member, matter was remanded back to Central Excise authorities for fresh examination in light of majority decision. On appeal to Hon ble Supreme Court, view expressed by learned JM of CEGAT was upheld. Hon ble Supreme Court held that it was not possible to accept that excavation of stones and thereafter cutting and polishing them into slabs resulted in any manufacture of goods. contention advanced on behalf of assessee that decisions to effect that activities carried on by assessee do not amount to manufacture of article or thing would not come in way of assessee insofar as even production of article or thing not amounting to manufacture also enables assessee to get deduction under s. 80-IA is also bereft of substance. In case ofCCE vs. Fine Marble & Minerals (P) Ltd. 1985 (22) ELT 128, CEGAT has specifically pointed out that cutting of marble blocks into marble slabs does not amount to manufacture or production of article or thing. relevant portion of order being paras 6 to 10 are reproduced hereunder : "6. Sec. 3 of Central Excise and Salt Act, 1944, is charging section . Duty is leviable on all excisable goods which are produced and manufactured in India as and at rates set forth in First Schedule. Sec. 2(d) defines excisable goods as goods specified in First Schedule. goods in question viz. cut marble slabs are not one of items specifically enumerated in First Schedule. So, we have to find out whether residuary Item 68 would be applicable. This Tariff item refers to all other goods not elsewhere specified . Reading s. 3 and Tariff Item 68 together, it follows that Tariff Item No. 68 would not be applicable unless they are goods produced or manufactured in India. term manufacture itself as defined in s. 2(f) is inclusive definition. Excise duty is imposed when manufacture of goods occurs. concept of "manufacture" has been considered in several cases cited on both sides. principles that evolve out of these decisions are that (i) mere change is insufficient and new product should emerge. In assessee decision in case ofUnion of India vs. Delhi Cloth Mills, Supreme Court has observed, relying on passage from American judgment, word manufacture implies change, but every change is not manufacture and yet every change of article is result of treatment, labour and manipulation. But something more is necessary and there must be transformation, new and different article must emerge having distinctive name, character or use". (ii) new substance known to market must emerge. (iii) there should be loss of original identity. fact that product has undergone degree of processing would be irrelevant if original commodity continues to possess its original identity. 7. We have to analyse in light of legal principles set out above, whether respondents have manufactured product liable for duty. process of cutting marble block into marble slabs has been set out in earlier para. marble slabs that are merely sawn from marble blocks cannot be called distinct commodity. end product which would come into existence after activity is completed, would still be called marble . Thus, original identity continues despite several processes undergone. In trade circles, marble slabs or marble tiles that are manufactured after cutting edges, trimming, polishing and other processes, continue to be known as marble. Unless it is proved that by virtue of sawing process, different or distinct commodity comes into existence, process cannot be equated to manufacture. It is wrong to say that by application of one or more processes, if raw material indicates change, that change would necessarily amount to manufacture. In order to fall within ambit of excisable goods , process applied should result in "goods" which could originally come to market to be brought and sold. intermediate state, as distinguished from final product, could in most cases be question of degree, but as Justice Holmes has said, "among distinctions of law are often distinctions of degree". 8. "Marble" as noticed fromEncyclopaedia Britannicaoften occurs as metamorphic rocks. quarry of marble is very limited. Channelling machines are utilized to make cuts wide and deep. marble blocks, outlined by joints and cuts are separated by driving wedges into drill holes. It further reads "mill- sawing into slabs is done with sets of parallel iron blades that move back and forth and are fed by sand and water. marble may be machined with lathes and carborundum wheels and is then polished with increasingly finer grades of abrasive". It is, therefore, seen that only after machining and polishing and such other process are applied to cut slabs, do they become marketable commodity viz. marble tiles . In short manufacture of article known as marble could be said to be complete only after all or most of these processes are undergone to result in distinctly different commodity. 9. decision inPio Food Packers(supra) indicates that manufacture is end result of one or more processes through which original commodity is made pass. In that case question arose whether pineapple fruit converted into pineapple slices for sale in sealed cans would amount to manufacture under s . 5A(1)(a) of Kerala General Sales-tax Act. primary test is continuation of identity of commodity involved in manufacture or otherwise. Shri Laxmi Kumaran, pointed out that pineapple would continue to be pineapple whether taken in slices or as whole fruit, and Shri Ravinder Narain countered by saying that so would marble continue to be marble whether in form of block, slab or tile. Be that it may, we have to consider whether slicing of pineapple would amount to manufacture. Applying ratio of that decision, it is seen that cutting marble slabs from marble blocks would not produce commercially distinct and marketable article. 10 . From decision cited by senior Departmental Representative, w e find that in certain cases certain processes involved have been treated as manufacture . For example1982 ELT 253(Teleprinter in sub-item (ii) Tariff Item 17is distinct entry)1987 ELT 389(the product viz. circles fully specified description contained in Item 26A(2), (iii)1980 ELT 735. But those were instances where article or product was covered under specific Tariff entry. As rightly pointed out by learned counsel for respondents, product now in question, before and after said process of sawing, are not so different and distinct that it could be said that, in commercial parlance, commodity was converted into another commercially distinct and different commodity." converted into another commercially distinct and different commodity." above decision in case ofFine Marble & Minerals (P) Ltd.(supra) is referred to in order of Tribunal in case ofAman Marble Industries (P) Ltd. vs. CCE(supra), and has been relied upon by learned JM of CEGAT whose decision has ultimately been upheld by Hon ble Supreme Court. It is evident from above decision of Central Excise Tribunal that activities carried on by assessee do not also fall within ambit of production of article or thing and, therefore, assessee is not entitled to deduction under s. 80-IA. 2 0 . Before winding up, it will be necessary to consider contention advanced on behalf of assessee that excise duty is paid on activities carried on by assessee which supports claim that assessee is engaged in manufacture or production of article or thing. I have pointed out earlier that Hon ble Supreme Court in case ofAman Marble Industries (P) Ltd. vs. CCE(supra), considered activities carried on by assessee for purpose of taxation under Central Excise Act, 1944. Hon ble Supreme Court, as pointed out earlier, laid down law that activities of cutting, trimming and polishing of marble does not amount to manufacture or production of article or thing. Subsequently, levy of excise duty on marble blocks, slabs and tiles might have been authorized under Customs (Central) Excise Act. In this connection it will be relevant to point out that s. 2 of Central Excise Act, 1944 was amended to give inclusive definition of manufacture as under : (b) in s. 2, for cl. (f), following clause shall be substituted; namely : (f) "manufacture" includes any process, (i) incidental or ancillary to completion of manufactured product; and (ii) which is specified in relation to any goods in section or Chapter notes of Schedule to Central Excise Tariff Act, 1985 as amounting to manufacture, and word "manufacturer" shall be construed accordingly and shall include not only person who employs hired labour in production or manufacture of excisable goods, but also any person who engages in their production or manufacture on own account; definition of excisable goods had also been amended to mean "goods specified in Schedule to Central Excise Tariff Act, 1985 as being subject to duty of excise". Before this amendment, Hon ble Supreme Court in case ofAman Marble Industries (P) Ltd. vs. CCE(supra), had laid down law that t h e activity of cutting, trimming, polishing of marble does not amount to production or manufacture of article or thing. It is by virtue of inclusive definition of manufacture under Central Excise Act, 1944, which enables levy of excise duty in respect of marble slabs and marble tiles. It is well- settled principle of law that in interpreting statute with reference to other statutes, it is necessary to keep in mind relevant provisions of statute. Definition of particular statute may not be applicable in interpreting meaning of word under different statute. Under IT Act, word manufacture is not defined. Therefore, one will have to depend on interpretation of word manufacture as per settled precedents laid down by Hon ble Supreme Court or High Courts. decision of Supreme Court has got to be read in context in which it has been rendered. decision of Supreme Court in case ofAman Marble Industries (P) Ltd.(supra) is before amendment in Central Excise Act, 1944 and, therefore, is applicable to present case. Subsequent decision in case ofKores India Ltd.(supra) is not applicable as it has been rendered in light of amended law. 21. Similarly, assessee being registered as industrial unit does not necessarily make them as manufacturer or producer of any article or thing. learned counsel for assessee had pointed out before us that Sales-tax Department had also classified marble blocks and marble slabs separately and imposed tax at different rates. In my considered view, mere fact that Sales-tax Department has provided different rates for sale of marble in different shapes does not advance case of assessee that different commodity is transformed by cutting and polishing marble blocks to amount to production or manufacture of article or thing. 22. It may also be pertinent to mention that learned counsel had invited my attention to certain decisions of Rajasthan High Court such as in case ofCTO vs. Bhonri Lal Jain (1994) 94 STC 118 (Raj), wherein their Lordships had held that cutting of marble stones and blocks amounts to manufacture. These decisions are rendered prior to decision of Hon ble Supreme Court in case ofLucky Minmat (P) Ltd. vs. CIT(supra). decision of Hon ble Supreme Court is dt. 3rd Aug., 2000 and, therefore, any earlier decision to contrary of any High Court stands overruled and, therefore, these are no longer good law. 2 3 . Taking totality of facts and circumstances of this case into consideration, especially decision of Hon ble Supreme Court in case ofAman Marble Industries (P) Ltd.(supra) being directly on issue, I am of considered view that cutting of marble blocks into marble slabs and tiles and selling same after polishing does not amount to either production or manufacture of any article or thing. I, therefore, concur with view expressed by learned AM. 24. matter is now remitted to Division Bench for passing order in accordance with majority view. R.S. SYAL, A.M. : 30th June, 2006 In conformity of opinion of majority of Members of Tribunal who have heard these cases, for reasons cited in orders, we adjudicate issue apropos of point of difference against assessee. 2. In result, both appeals stand dismissed. *** DEPUTY COMMISSIONER OF INCOME TAX v. ELTEK SGS (P) LTD.