LexRAJASTHAN STATE ELECTRICITY BOARD versus ASSOCIATED STONE INDUSTRIES AND ANR.
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)Y RAJASTHAN STATE ELECTRICITY BOARD Al v. ASSOCIATED STONE INDUSTRIES AND ANR. MAY8, 2000 [SYED SHAH MOHAMMED QUADRI AND SHIVARAJ V. PATIL, JJ.] B Rajasthan Electricity (Duty) Act, 1962-Section 3(3)-1962 Notifica- tion exempted energy consumed in any industry in manufacture, production, processing or repair of goods including mining activity-Notifications issued in 1963 and 1965 withdrew exemption given to mines-Respondents consumed c electricity for pumping water out of mines to facilitate mining activity-Notice issued for payment of electricity duty after withdrawal of exemption-Trial Court dismissed injunction suit filed by respondent which was later allowed by District Judge-High Court con.finned order of injunction-On appeal Held, Mining activity is distinguished from a manufacturing activity and the D exemption was consciously removed by the legislature-Excavation of stores from a mine and then cutting and polishing them into slabs does not amount to manufacture of goods-When no new product comes into existence there is no process of manufacture-Energy consumed for pumping out water cannot be accepted as energy consumed in an industry in the manufacture, process- ing, or repair of goods so as to claim exemption or reduced duty under the E 1963 and 1965 Notifications. Words and Phrases-"Manufacture" -Meaning of. A Notification was issued in 1962 exempting from duty the energy consumed in any industry in the manufacture, production, processing or F repair of goods, which also included mining activities. However, the two subsequent Notifications issued in 1963 and 1965 withdrew the exemption given to mines by the earlier notification. The respondents excavate stones and convert them into slabs by cutting and polishing. Electricity was being consumed for pumping out G }fl.. water from the mines in order to facilitate the mining activities. Electricity duty was levied under Section 3(3) of the Rajasthan Electricity (Duty) Act, 1962 as the exemption given to mines was withdrawn. Trial Court dis- missed the injunction suit filed by the respondents but was later on allowed by the District Judge. High Court confirmed the said order. Hence this H 1179 A B 1180 appeal. SUPREME COURT REPORTS [2000] 3 S.C.R. Appellant contended that consumption of energy for pumping out water from the mine cannot be construed as energy consumed for manu- facture, production, processing or repair of goods, that excavating stones and then cutting and polishing them into slabs did not amount to manu- facture; and that the last two notifications had clearly withdrawn the exemption in respect of mines. Respondents contended that excavation of stones and then cutting and polishing them into slabs amounted to manufacture. C Allowing the appeal, the Court D E F G HELD : 1. In the 1962 Notification tax was expressly exempted for the energy consumed by or in respect of mines which was subsequently omitted by the Notifications issued in 1963 and 1965. Electrical energy was being consumed for pumping out water from mines for making them ready for mining activity namely, excavating stones and thereafter cut- ting and polishing them into slabs. Mining activity is distinguished from a manufacturing activity and removal of this exemption in respect of mines was done consciously so as to bring the mining activity within the purview of Section 3 of the Rajasthan Electricity (Duty) Act. (1185-B-E] 2.1. The exemption given by the 1962 Notification was specifically taken away. It was never pleaded that electricity was being used for pumping out water from the mines which formed part of manufacturing process. Excavation of stones from a mine and thereafter cutting them and polishing them into slabs does not amount to manufacture of goods. The word "manufacture" generally and in the ordinary parlance in the absence of its definition in the Act should be understood to mean bringing into existence a new and different article having distinctive name, charac- ter or use after undergoing some transformation. When no new product as such comes into existence, there is no process of manufacture. The cutting and polishing of stones into slabs is not a process for manufacture for obvious and simple reason that no new and distinct commercial product came into existence as the end product still remained stone and thus its original identity continued. (1186-C-F] 2.2. The word "manufacture" is not
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