COMMISSIONER OF INCOME TAX DELHI VIII vs. INDERJEET KOCHHAR

IN THE HIGH COURT OF DELHI AT NEW DELHI . 31.08.2009 . Present: Ms. P.L.Bansal, Advocate for the appellant. Mr. Rajesh Mahna, Mr. Ramanand Roy, Mr. Navnit Dhillon and Mr. Rakesh Bhardwaj, Advocate for the respondent. . +ITA No. 596/2009 . . 1 The question which arises for consideration is as to whether business of coating and lamination of Alluminium Foil for use of pharmaceutical industries for purposes of packaging of medicine is a manufacturing activity or not. This has arisen in the context of the respondent/assessee claiming benefit of Section 80-IB of the Income Tax Act, which claim was rejected by the Assessing Officer. However, in appeal, the CIT(A) reversed the finding and the opinion of the CIT(A) has been upheld by the Income Tax Appellate Tribunal also. 2 We find from the orders of the CIT (A) as well as ITAT that the process of conversion of alluminium foil into pharmaceutical foil by lamination or coating has been discussed in detail and a finding of fact is arrived at to the effect that new and different product is produced with the said conversion and, therefore, it is a manufacturing process. This is a pure finding of fact. We may add here that CIT(A) described the process in the following words:- ?Now here is a case where even the aluminum foil after the specific process brought into existence new end product which was irreversible and was distinct and different in character from the original aluminum foil purchased by the appellant and it was marked also as a commodity different from plain aluminum foil, the appellant was entitled to the benefit of section 80-I of the . . Income tax Act. The facts of the case as discussed by the honorable Supreme court in the case of Johnson and Johnson vs. Collector of Central Excise, Bombay are almost the same wherein it was held that printing coating and paper packing of aluminum foils amount to manufacture of a new product with distinct name and character and use from the bare aluminum foils.? . 3 Learned counsel for the respondent has also produced before us a chart showing the process which is under gone for producing Blister Foil as well as pharmaceutical foil (VMCH Heat Seal Coated Foil) from the raw-material in the form of aluminum foil. This process is described as under:- ?A. 1. Raw Material Roll Jumbo Alum Foil Roll. 2. Shellac Wash to Remove Oil From The Surface Of Oil. 3. VMCH Coating Station (Heat Seal Lacquer) 4. While Passing Through The Hot Tunnel of 40? Length Then Immediately Pass Through Chilled Rollers. 5. Rewind The Material To Rewinding Station. . B. Take The Material To Rewinding/Trimming Machine. . C. Take the Material to Slitting Machine For Slitting To The Required Sizes.? . 4 The process is undertaken with the use of machines. It becomes necessary because of the specific requirement of the pharmaceutical industry for packaging of the medicines. The aluminum foil simplicitor, in its original form is of no use and unless it under goes the aforesaid process and is produced in a different form, there cannot be packaging of medicines by the pharmaceuticals industries. Mr. Mahna also states that it is treated as separate product under the excise laws as well. 5. For these reasons, we are of the opinion that the view taken by the authorities below is perfectly justified and no question of law arises. 6 Dismissed. . A.K.SIKRI, J . . . . VALMIKI J.MEHTA, J . August 31, 2009 ib . #40 .