Court Opinion

ID: 9757545
Source: CourtListenerOpinion
Date Created: 2023-08-28 22:45:29.241923+00
Date Added: 2024-06-11T07:28:40.700507
License: Public Domain

Dissenting Opinion by
Mb. Justice O’Beien :
I respectfully dissent from the conclusion reached by the majority. In my view, appellant is engaged in a manufacturing operation, and I would resolve the anomaly created by the existence of Commonwealth v. Sitkin’s Junk Co., 412 Pa. 132, 194 A. 2d 199 (1963), by following the rationale of that case.
While manufacturing may not occur when reinforcing rods are bent to meet shapes specified by a customer, that example is a far cry from the procedures followed by appellant in preparing scrap materials for the market. A worn out automobile is nothing more than a worn out automobile prior to appellant’s preparation of it for recycling. There is much more involved than simply compressing the automobile into a bale which will fit the opening of an open hearth or electric furnace. For example, the engine, transmission, rear end, and other drive line components must be removed. The frame must be cut away from the body. All nonferrous materials, glass and upholstery must be removed. What remains is the automobile body, which is hydraulically *102compressed. The other components are also treated and cut up into various sizes for various purposes. The engine block itself does not become cast iron scrap suitable for foundry use until the pistons and connecting rods are removed, etc.
I believe it is a gross oversimplification to characterize appellant’s operation as mere processing and not manufacturing. The example given above is only one of the highly complex operations which occur in the scrap business, and I do not believe that the General Assembly’s failure to define manufacturing in the Capital Stock Tax Act should operate to impose that tax on one who is clearly engaged in manufacturing, where the act contains an exemption for manufacturing.
The majority indicates that appellant is not a manufacturer because, among other reasons, “it adds nothing to the mass . . . , but rather subtracts by cleaning away unwanted elements.” Surely a producer of newel posts, who purchases properly shaped and sized pieces of lumber and turns them on lathes to produce the finished product, adds nothing to the mass, but rather subtracts by removing unwanted wood. I have no doubt that such an operation would be considered manufacturing under the Capital Stock Tax or any other act.
The majority opinion concludes that the Legislature has illogically denied scrap dealers an exemption as “manufacturers” under the Capital Stock Tax while granting them the same exemption under the Sales and Use Tax. A much more reasonable conclusion would be that when the Legislature defined “manufacturing” in the Sales and Use Tax Act, it intended that definition to control for all legislative purposes. After all, the definition in the Sales and Use Tax: “(c) ‘Manufacture.’ The performance of manufacturing, fabricating, compounding, processing or other operations, engaged in as a business, which place any personal prop*103erty in a, form, composition or character different from that in which it is acquired whether for sale or use by the manufacturer. . . .” (Emphasis supplied.) is very similar to the judicial definition in Norris Brothers v. The Commonwealth, 27 Pa. 494, 496 (1856), cited by the majority: “But what is manufacturing? It is making. To make in the mechanical sense does not signify to create out of nothing; for that surpasses all human power. It does not often mean the production of a new article out of materials entirely raw. It generally consists in giving new shapes, new qualities, or new combinations to matter which has already gone through some other artificial process(Emphasis supplied)
The activities of appellant clearly convert useless metal products into a very useful raw material. As such, the appellant should be considered a manufacturer and entitled to the exemption.