IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  31.08.2009 
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 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. 
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 +ITA No. 596/2009 
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 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 
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 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.? 
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 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. 
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 B.       Take The Material To Rewinding/Trimming Machine. 
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 C.       Take the Material to Slitting Machine For Slitting To The 
 Required Sizes.? 
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 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. 
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 A.K.SIKRI, J 
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 VALMIKI J.MEHTA, J 
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 August 31, 2009 
 ib 
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 #40 
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