ORDER
[CASE NUMBER]
1. Heard learned counsel for the parties.
2. Delay condoned.
3. Leave granted.
4. The following question raised at the instance of the Revenue in an appeal before the Bombay High Court was answered in favour of the assessee :
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee is entitled to deduction of investment allowance under [SECTION] of the [ACT], in respect of machinery used in mining activity ignoring the fact that the assessee is engaged in extraction and processing of iron ore, not amounting to manufacture or production of any article or thing ?"
5. The High Court, while dismissing the appeal preferred by the Revenue, held that extraction and processing of iron ore did not amount to "manufacture". However, it came to the conclusion that extraction of iron ore and the various processes would involve "production" within the meaning of [SECTION] of the [ACT] (for short, "the Act"), entitling the assessee to investment allowance under the said provision.
6. According to the Revenue, which is in appeal before us, the High Court erred in its conclusion as it failed to consider that extraction and processing of iron ore did not produce any new product. The definition of the word "ore" in [ENTITY]'s Judicial Dictionary, Vol. 3, Fifth Edn., has been relied upon in this context. Reliance has also been placed upon the decision of this Court in [PRECEDENT] , and on [SECTION] of the [ACT].
7. Learned counsel for the assessee, on the other hand, has contended that the High Court had correctly relied upon earlier decisions of this Court in arriving at the conclusion it did. We have also been referred to the other provisions of the Act, which are substantially phrased in the same manner as [SECTION] of the Act, wherefrom, according to the assessee, it will be abundantly clear that Parliament had intended to include the mining of ores within the meaning of the word "production".
8. At the outset, it may be noted that [SECTION] makes it clear that investment allowance is deductible in respect of, inter alia, a plant owned by the assessee which is wholly used for the purposes of the assessee's business under [SECTION] if the plant is installed after 31st March, 1976, in an industrial undertaking for the purposes of the business of construction or manufacture or production of any article or thing, except those articles or things mentioned in the [SECTION] to the Act. There is no dispute that the plant in respect of which the assessee claimed deduction was owned by it and was installed after 31st March, 1976, in the assessee's industrial undertaking for excavating, mining and processing mineral ore. Mineral ore is not excluded by the [SECTION]. The only question is whether such business is one of manufacture or production of ore. The issue had arisen before different High Courts over a period of time. The High Courts have held that the activity amounted to "production" and answered the issue in question in favour of the assessee. The High Court of Andhra Pradesh did so in [PRECEDENT] , the Calcutta High Court in [PRECEDENT] and [PRECEDENT] and the Delhi High Court in [PRECEDENT]. The Revenue has not questioned any of these decisions, at least not successfully, and the position of law, therefore, was taken as settled.
9. The reasoning given by the High Court, in the decisions noted by us earlier, is, in our opinion, unimpeachable. This Court had, as early as in 1961, in [PRECEDENT], defined the word "production", albeit; in connection with the [ACT]. The definition was adopted from the meaning ascribed to the word in the Oxford English Dictionary as meaning "amongst other things that which is produced; a thing that results from any action, process or effort, a product; a product of human activity or effort". From the wide definition of the word "production", it has to follow that mining activity for the purpose of production of mineral ores would come within the ambit of the word "production" since ore is "a thing", which is the result of human activity or effort. It has also been held by this Court in [PRECEDENT] that the word "production" is much wider than the word "manufacture". It was said :
"The word 'production' has a wider connotation than the word 'manufacture'. While every manufacture can be characterised as production, every production need not amount to manufacture
The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods."
It is, therefore, not necessary, as has been sought to be contended by learned counsel for the Revenue, that the mined ore must be a commercially new product. The decisions and other authorities on the definition of the word "ore", as cited by the appellant, are irrelevant.
10. Learned counsel appearing on behalf of the assessee, correctly submitted that the other provisions of the Act, particularly [SECTION]/[SECTION] to the Act, would show that mining of ore is treated as "production". [SECTION] also speaks of production in the context of mining activity. The language of these sections is similar to the language of [SECTION]. There is no reason for us to assume that the word "production" was used in a different sense in [SECTION]
We are, therefore, of the opinion that extraction and processing of iron ore amounts to "production" within the meaning of the word in [SECTION] of the Act and, consequently, the assessee is entitled to the benefit of [SECTION] of the Act. The question whether the High Court was correct in holding that the activity did not amount to "manufacture" is left open.
11. The civil appeal is, accordingly, dismissed but without any order as to costs.
[CASE NUMBER], [CASE NUMBER], [CASE NUMBER], [CASE NUMBER] and [CASE NUMBER] :
12. Following the decision given by us today in [PRECEDENT], the special leave petitions are dismissed:
[CASE NUMBER] :
13. The provision required to be construed in this appeal is [SECTION] of the [ACT], the relevant extracts of which are substantially identical to the provisions of [SECTION] of the [ACT], which have been construed by us in the order delivered by us today in [PRECEDENT]. Following the decision in [PRECEDENT] (supra), the civil appeal is dismissed. No costs.