14 October 2011
Whether Blending of tea amounts to manufacture or not?
This issue has been addressed by the Supreme Court in the case of CIT v. Tara Agencies 2007 (214) ELT 491 (SC). The Supreme Court has held that blending of different qualities of tea to smoothen its marketability is not manufacture but processing. The production of tea happens in the tea gardens. Manufacture happens when tea leaves are plucked from the tea bushes and by mechanical process, converted to tea. Blending of different qualities of tea is its processing. The Apex Court explained that the word ‘production’ when used in juxtaposition with the word ‘manufacture’ covers bringing into existence new goods by a process which may or may not amount to manufacture. It covers all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods. Processing is only an intermediate stage of production and/or manufacture. The Supreme Court elaborated that no hard and fast rule can be applied for determining as to whether a process amounts to manufacture in every case and thus each case must be decided on its own facts.
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