Manufacturing Process

1. Manufacturing Process
Bhavik Modi
Roll No.13
The Factories
Act, 1948.
FACULTY OF LAW

2. Manufacturing Process
Itmeansanyprocessfor
making,altering,repairing,ornamenting,finishing,packing,oiling,washing,
cleaning,breakingup,demolishing,orotherwise,treatingoradoptingany
articleorsubstancewithaviewtoitsuse,sale,transport,deliveryor
disposal;or
pumpingoil,waterorsewageoranyothersubstance;or
generating,transforming,transmittingpower;or
composing typesforprinting,printingbyletter-press,lithography,
photogravureorothersimilarprocess,orbook-binding;or
constructing,reconstructing,repairing,refitting,finishingorbreakingup
shipsorvessels;or
preservingorstoringanyarticleincoldstorage.[Section2(k)]
Thedefinitionisquiteimportantandithasbeenthesubjectofjudicial
interpretationinlargenumberofcases:
The Factories
Act, 1948.

3. What is manufacturing process??
Thedefinitionofmanufacturingprocessisexhaustive.Underthepresent
definitioneventransporting,washing,cleaning,oilingandpackingwhichdo
notinvolveanytransformationassuchwhichisnecessarytoconstitute
manufacturingprocessinitsgenericsense,arenonethelesstreatedas
manufacturingprocess.Thedefinitionisartificiallyprojectedbeyondthescope
ofnaturalmeaningofwhatthewordsmightconveythuscoveringveryvide
rangeofactivities.MadrasHighCourtinthecaseofInre.SeshadrinathaSarma,
1966(2)LLJ235,heldthattoconstituteamanufacturethereshouldnotbe
essentiallysomekindoftransformationofsubstanceandthearticleneednot
becomecommerciallyasanotheranddifferentarticlefromthatatwhichit
beginsitsexistencesolongastherehasbeenanindisputabletransformationof
substancebytheuseofmachineryandtransformedsubstanceiscommercially
marketable.
DivisionBenchofA.P.HighCourtheldthattodeterminewherecertainpremises
isfactory,itisnecessarythatitshouldcarryonmanufacturingprocessandit
doesnotrequirethattheprocessshouldendinasubstancebeing
manufactured(AlkaliMetals(P)Ltd.v.ESICorpn.,1976Lab.I.C.186).Inanother
caseitwasobservedthatmanufacturingprocessmerelyreferstoparticular
businesscarriedonanddoesnotnecessarilyrefertotheproductionofsome
article.Theworksoflaundryandcarpetbeatingwereheldtoinvolve
manufacturingprocess.Aprocessemployedforpurposeofpumpingwateris
manufacturingprocess.Eachofthewordsinthedefinitionhasgotindependent
meaningwhichitselfconstitutesmanufacturingprocess.
The Factories
Act, 1948.

4. Following processes have been held to be
manufacturing processes:
Sun-curedtobaccoleavessubjectedtoprocessesofmoistening,stripping,
breakingup,adaption,packing,withaviewtotransporttocompanysmain
factoryfortheiruseinmanufacturingcigarette(V.P.GopalaRaov.Public
Prosecutor,AIR1970S.C.66).
Theoperationofpeeling,washingetc.,ofprawnsforputtingthemincold
storageisaprocesswithaviewtothesaleoruseordisposaloftheprawns
(R.E.DSouzav.KrishnanNair,1968F.J.R.469).
Stitchingoldgunnybagsandmakingthemfitforuse.
Inpaperfactory,bankasgrasspackedintobundlesmanuallyand
despatchedtothefactory.
Workofgarblingofpepperorcuringginger.
Processcarriedoutinsaltworksinconvertingseawaterintosalt.
Conversionoflatexintosheetrubber.
Aprocessemployedforthepurposeofpumpingwater.
Theworkdoneonthebanglesofcuttinggroovesinthemwhichlaterwould
befilledwithcolouring,isclearlyastageinornamentationofthebangle
withviewtoitssubsequentuseforsale.
Preparationofsoapinsoapworks.
The Factories
Act, 1948.

5. Cont..
ThemakingofBidies.
Therawfilmusedinthepreparationofmoviesisanarticleorasubstance
andwhenbytheprocessoftracingoradapting,afterthesoundare
absorbedandthephotosimprinted,itisrenderedfittobescreenedina
cinematheatre,thensuchachangewouldcomewithinthemeaningof
thetermtreatingoradaptinganyarticleorsubstancewithaviewtoitsuse.
Composingisanecessarypartofprintingprocessandhenceitisa
manufacturingprocess.Itcannotbesaidthatthedefinitionshouldbe
confinedtotheprocessbywhichimpressioniscreatedonthepaperandto
nootherprocessprecedingorsucceedingthemarkingoftheimpressionon
thepapertobeprinted.Everythingthatisnecessarybeforeorafter
completeprocess,wouldbeincludedwithinthedefinitionoftheword
‘manufacturingprocess’.Thedefinitiontakesinallactswhichbringinnot
onlysomechangeinthearticleorsubstancebutalsotheactdoneforthe
protectionandmaintenanceofsucharticlebypacking,oiling,washing,
cleaning,etc.(P.Natrajanv.E.S.I.Corporation(1973)26FLR19).
Preparationoffoodandbeveragesanditssaletomembersofaclub(CCI
v.ESIC,1992LABIC2029Bom.).
Receivingproductsinbulk,inpackingandpackingasperclients
requirements(LLJI1998Mad.406).
Constructionofrailway-useofrawmaterialslikesleepers,bolts,looserails
etc.toadaptationoftheiruseforultimatelyforlayingdownrailwayline(LAB
IC1999SC407;LalMohmd.v.IndianRailwayConstructionCo.Ltd.).
The Factories
Act, 1948.

6. Nodefiniteorprecisetestcanbeprescribedfordeterminingthequestion
whetheraparticularprocessisamanufacturingprocess.Eachcasemustbe
judgedonitsownfactsregardbeinghadtothenatureoftheprocess
employed,theeventualresultachievedandtheprevailingbusinessand
commercialnotionsofthepeople.Indecidingwhetheraparticularbusinessisa
manufacturingprocessornot,regardmustbehadtothecircumstancesof
eachparticularcase.Toconstituteamanufacturingprocess,theremustbe
sometransformation.
i.e.articlemustbecomecommerciallyknownassomethingdifferentfrom
whichitacquireditsexistence.
What is not a manufacturing process??The Factories
Act, 1948.

7. Following processes are not manufacturing
processes:
Exhibitionoffilmsprocess.
IndustrialschoolorInstituteimpartingtraining,producingcloth,notwith
aviewtoitssale.
Receivingofnewsfromvarioussourcesonareelinataleprinterofa
newspaperoffice,isnotamanufacturingprocessinasmuchasnewsis
notthearticleorsubstancetowhichSection2(k)(i)hasreferred.
Anypreliminarypackingofrawmaterialfordeliveringittothefactory
(AIR1969Mad.155).
Finishedgoodsandpackingthereof:F.Harev.StateAIR1955,2710.
The Factories
Act, 1948.