Is the process of Grinding amounts to manufacture u/s 2(f) of the Central Excise Tariff Act,1985?
8 Replies
Rakshit
(practising)
(338 Points)
Replied 26 January 2013
No. There are lot of judgments on it.
Raksh*t Verma Advocate
09810525780.
CA ANKUSH AGGARWAL
(CHARTERED ACCOUNTANT)
(2782 Points)
Replied 30 January 2013
Sir
I wud be grateful to you if quote one or two judgments on the same ....
Prabhat Kumar
(Advocate & Consultant)
(1912 Points)
Replied 30 January 2013
In order to attract any activity under definition of manufacturer,a new distinct commodity must emerge after the process.Now the the process of grinding is manufacture or not will be depend on what emerges after grinding,if the same thhing emerges after grinding then it isnot manufacture otherwise it may be termed as manufacture.For example grinding of wheat in order to obtain Atta or Dalia is manufacture.But grinding of sl*g was not as manufacture as even after grinding sl*g remain asl*g[2005 (188)ELT 179].
Subhasish Goenka
(-----)
(78 Points)
Replied 18 February 2013
@ Prabhatji - In my case the clients are manufacturing Pneumatic Jack Hammers & spares parts used in mining industry.
Grinding is used as a process to polish the steel made component such as to smoothen its marketability.
Without grinding the product may be sold but the product wont be complete in itself.
Buyer may exist but it wont get the desired result & the selling price may vary by around 50%.
Plz suggest it it amounts to manufacture u/s 2(f)???
CA Hardik Bunha
(self)
(2121 Points)
Replied 19 February 2013
your client coverd by u/s 2(F). as definition of manufacture also includes INTERMEDIATE GOODS.
hence this activity covers by manufacture.
refer defination of manufacture as well as notification no. 67/95
Prabhat Kumar
(Advocate & Consultant)
(1912 Points)
Replied 21 February 2013
The golden test is whether after the process a new unique product emerges or not,if the process brings a new distinct product then it may fall within sec.2(f),otherwise not.In your case it appears that grinding is only part of the whole manufacturing activity.Simply grinding is not manufcturing as a hammer remains a hammer even after grinding.The fact that you may get abetter price after grinding has no relevence for defining manufacturing
Subhasish Goenka
(-----)
(78 Points)
Replied 22 February 2013
@ Prabhatji: Thank You for replying.
Is'nt it an incidental process for the completion of the finished product.
Plz help.
Prabhat Kumar
(Advocate & Consultant)
(1912 Points)
Replied 22 February 2013
If grinding has some nexus with the marketability of the goods then we can count it as incidental or ancillary process.Then we have to show that without the process undertaken the product is not complete and the same is not marketable .
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