JUDGMENT : 1. The petitioner is in the business of manufacture and sale of “veneer” and, for this purpose, holds a licence both for manufacture as well as for sale. The petitioner’s factory is situate within the market yard of Village Chakarpur. The raw material used for the manufacture of Veneer is ‘wood’, which is an agricultural produce as specified under Head ‘H’ of the notification issued under Section 6 of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred to as the Act). For the purpose of manufacture of veneer, the petitioner is importing logs of a tree known as “keruing”, which is grown in Malaya. 2. According to the petitioner, veneer is not an agricultural produce as defined in Section 2(a) of the Act. Consequently, no mandi fee could be imposed upon the petitioner for the sale of veneer. The Secretary, Mandi Samiti, however, by an order dated 29.01.1995, directed the petitioner to deposit Rs.9,27,930.44 towards mandi fee on the sale of veneer for various period. The petitioner, being aggrieved, filed a revision under Section 32 of the Act, which was dismissed. The Director held that veneer is an agricultural produce and, consequently, the petitioner was exigible to mandi fee on the sale of veneer. The petitioner, being aggrieved, has filed the writ petition praying for the quashing of the order of Director dated 17.06.1996 and has further prayed that veneer manufactured by the petitioner is not exigible to mandi fee under Section 17(iii)(b) of the Act. 3. Heard Ms. Menaka Tripathi, the learned counsel for the petitioner and Mr. J. C. Belwal, the learned counsel for the respondents. 4. The core issue which arises for consideration in the present petition is whether “veneer” manufacture from logs remains a wood and consequently an agricultural produce or not? 5. Before dealing with the issue, it would be appropriate to consider a few provisions of the Act. 6. Section 2(a) of the Act defines agricultural produce. For facility, the said provision is extracted hereunder:- “2. Definitions. 5. Before dealing with the issue, it would be appropriate to consider a few provisions of the Act. 6. Section 2(a) of the Act defines agricultural produce. For facility, the said provision is extracted hereunder:- “2. Definitions. In this Act, unless there is anything repugnant in the subject or context, - (a) “agricultural produce” means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry, or forest as are specified in the Schedule, and includes admixture of two or more such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and juggery.” 7. Section 2(t) defines specified agricultural produce as under:- “2(t) “specified agricultural produce” means agricultural produce specified in the notification under Section 6 or as modified under Section 8.” 8. Items of agricultural has been specified in the Schedule. Under Heading ‘H’ - Forest Produce, Wood has been specified as an agricultural produce. 9. According to the petitioner, veneer is manufactured from wood. After a physical and chemical process, a new product emerges which has a distinct name, character and use and, consequently is, no longer a wood. On the other hand, the contention of the respondents is, that the wood or log after processing into a veneer, does not lose the basic characteristic of wood and consequently veneer still remains a wood and consequently an agricultural produce. 10. In order to find out whether wood after processing and/or manufacturing into a veneer, becomes a new product which has a distinct name, character or use, it would be essential to consider the process by which wood is converted into a veneer. The process has been explained by the petitioner in the writ petition as well as before the revisional authority. 11. According to the petitioner, veneer is manufactured from a log. Trees felled in the forest are cut into pieces and tops are removed from these logs and are taken to the factory where the logs are peeled by some machines with the help of power. First the logs are cut into section according to the required size of veneer. Barks of the logs are removed. Naked section of the logs are fitted in the peeling machines. With the help of power, the logs are moved in circular motion and, with the help of a knife fitted in the machines, thin layers of timber comes out. First the logs are cut into section according to the required size of veneer. Barks of the logs are removed. Naked section of the logs are fitted in the peeling machines. With the help of power, the logs are moved in circular motion and, with the help of a knife fitted in the machines, thin layers of timber comes out. Such thin layers are thereafter cut into different sizes and after undergoing several physical and chemical processes, an entirely different product from wood comes into existence which loses all the original properties of the Keruing tree. Such new product is called “veneer”. The thickness of the layer is restricted to less than 6mm. Consequently, according to the petitioner, veneer does not come within the ambit of the definition of agricultural produce, as defined under Section 2(a) of the Act. 12. According to the petitioner, since the veneer produced by the petitioner is a finished product, excise duty is levied on the veneer produced by the petitioner. The petitioner contends that veneer produced from the logs after physical and a chemical process emerges as a different product having a distinct name, character and use. Veneer is a distinct product than wood, which can be borne out from the various literatures on veneer. According to the petitioner, veneer produced by the petitioner is a raw material for the manufacture of plywood and is also used in toys, containers of various kinds and other products, ranging from beds to coffins. 13. To support its stand, the petitioner has placed reliance on North Cacher Timbers Products Vs. State of Assam 1993 (2) GLR 86, Brakes India Ltd. Vs. Superintendent of Central Excise & others 1997 (10) SCC 717 , Kores India Ltd. Chennai Vs. Commissioner of Central Excise, Chennai 2005 (1) SCC 385 , O.K. Play (India) Ltd. Vs. Commissioner of Excise-II, New Delhi 2005 (2) SCC 555 , Empire Industries Ltd. Vs. Union of India 1985 (3) SCC 314 , Ganesh Trading Co., Karnal Vs. State of Haryana & another 1974 (3) SCC 620 and Novopan India Ltd. Hyderabad Vs. Collector of Central Excise & Customs, Hyderabad 1994 Supp.(3) SCC 606. 14. In North Cachar’s case (supra), the Guahati High Court was considering as to whether a transit pass was required under Rule 2 of the Transit Rules framed under Section 40 of the Assam Forest Regulation, 1891 for the transportation of veneer. Collector of Central Excise & Customs, Hyderabad 1994 Supp.(3) SCC 606. 14. In North Cachar’s case (supra), the Guahati High Court was considering as to whether a transit pass was required under Rule 2 of the Transit Rules framed under Section 40 of the Assam Forest Regulation, 1891 for the transportation of veneer. The learned Single Judge held that the veneer was not a forest produce and consequently no transit pass was required to be issued. The Court held “12. From what is ascribed to ‘Veneer’ and ‘timber’ by the aforesaid authorities it is difficult to hold that ‘Veneer’ can be termed as timber in the broader sense: rather veneer appears to be a product of distinct name, character and use. Undisputedly, veneer in the ordinary commercial parlance is known as a distinct finished product and is brought and sold in the market as ‘veneer’ and that excise duties are being charged in advance on ‘veneer’ before it is brought out of the mill for marketing. It is well settled by the decisions of the Hon’ble Supreme Court in the case of South Bihar Sugar Mills Ltd. (supra) and Collector of Central Excise, Madras (supra) that excise duty becomes chargeable only when a new and different article emerges having a distinct name, character and use. Admittedly excise duty is not charged on log/timber from which veneer is produced. Veneer being a article of finished product having distinct name, character and use, excise duty is charged on veneer. As such, there is escape from holding that although ‘veneer’ is produced of log/timber, after the treatment, labour and manipulation in the veneer mill log/timber is transformed and loses its identity and emerge as a finished product with distinct name ‘veneer’ with distinct character and use.” 15. In Brakes India Ltd. (supra), the Supreme Court was considering the question as to whether brake lining blanks when put to the process of drilling, trimming and chamfering would amount to manufacturing within the meaning of Section 2(f) of the Central Excise and Salt Act, 1944. The Supreme Court affirmed the decision of the High Court, which held that by a process, a change was effected in the product and when a particular process was adopted, a transformation took place which made the product have a character and use of its own and consequently such process amounted to a manufacture. 16. The Supreme Court affirmed the decision of the High Court, which held that by a process, a change was effected in the product and when a particular process was adopted, a transformation took place which made the product have a character and use of its own and consequently such process amounted to a manufacture. 16. In Kores India (supra), a question arose as to whether cutting of typewriter ribbons from a jumbo pack to standard lengths of 10 meters and 5 meters and subsequently wounding it on metal spools amounted to processing or manufacture. The Supreme Court held that the products so processed by the appellant was a distinct, identifiable article having a distinct name, function and use and that the resultant product was commercially distinct as understood in common parlance and had a separate market. The Supreme Court held that the processing amounted to manufacture. 17. In O. K. Play (supra), the assessee procured low density polyethylene (LDPE) and high density polyethylene (HDPE) in a granular form and subjected them to pulverization process to produce moulding powder. According to the assessee, the conversion from granular form to a powdered form did not amount to manufacture. The Supreme Court held that in view of the definition of manufacture under Section 2(f) of the Central Excise and Salt Act, the process adopted by the assessee amounted to a manufacture since the moulding powder was a marketable commodity. 18. In Empire Industries (supra), the question was whether cotton fabrics subjected to the process of bleaching, mercerizing, dyeing, printing, etc., on cotton fabrics amounted to manufacture or not. According to the petitioner, he was only doing the job work of dyeing, beaching, etc. on the said fabric. The petitioner was receiving manmade fabric and after process the petitioner was delivering manmade fabric and thus no manufacturing process was involved. The Supreme Court held that the process carried out by the petitioner amounted to manufacture since it brought about, in existence, a different and distinct goods, which was commercially known and therefore excise duty was leviable. 19. In Ganesh Trading Co. (supra), the Supreme Court held that rice and paddy are not identical goods and that paddy after dehusking brings into existence a new product. 20. In Novopan India Ltd. (supra) the question was whether melamine faced particle boards could be called unveneered particle boards and therefore exempted from duty. 19. In Ganesh Trading Co. (supra), the Supreme Court held that rice and paddy are not identical goods and that paddy after dehusking brings into existence a new product. 20. In Novopan India Ltd. (supra) the question was whether melamine faced particle boards could be called unveneered particle boards and therefore exempted from duty. The Supreme Court found that both are different products and the process of manufacturing was also different. The Supreme Court consequently held that melamine faced particle boards was liable to duty. 21. In addition to the aforesaid, the learned counsel for the petitioner also laid stress on the following judgments :- Edward Keventer Pvt. Ltd. Vs. Bihar State Agricultural Marketing Board & Others 2000 (6) SCC 264 , Commissioner of Central Excise, Chennai II Commissionerate Vs. Tarpaulin International & other connected cases 2010 (9) SCC 103 and Income Tax Officer, Udaipur Vs. Arihant Tiles & Marbles (P) Ltd. 2010 (249) E.L.T. 161 (SC). 22. In Edward Keventer’s case (supra), the Supreme Court found that after the manufacturing process, the fruit is processed into a fruit drink and that the fruit loses its identity as a fruit. The Supreme Court found that “Frooti” and “Appy” manufactured and marketed by the company are not agricultural produce since it was not covered by “mango” and “apple” and consequently no market fee was payable. 23. In Tarpaulin International (supra), the Supreme Court held that cutting, stitching and fixing eyelets in tarpaulin cloth does not amount to manufacture since tarpaulin after stitching and eyeleting continued to remain a cotton fabric and that the process did not bring into existence a new and district product with total transformation in original commodity. 24. In Arihant Tiles (supra), the Supreme Court was considering whether conversion of marble blocks by sawing into slabs and titles and polishing amounts to manufacture or production of an article or thing for the purpose of deduction under Section 80-1A of the Income Tax Act. The Supreme Court held that on the facts of the case, the activity was a manufacture. 25. On the other hand, the learned counsel for the respondents contended that the entire process of manufacturing veneer indicates that veneer retains all the quality of wood both physically and chemically. The Supreme Court held that on the facts of the case, the activity was a manufacture. 25. On the other hand, the learned counsel for the respondents contended that the entire process of manufacturing veneer indicates that veneer retains all the quality of wood both physically and chemically. The learned counsel for the respondents submitted that even after the process of wood into veneer, it does not lose the basic characteristic of a wood and remains wood for the purpose of an agricultural produce as defined in Section 2(a) of the Act. The learned counsel for the respondents contended that the veneer so produced is not an end product or a final product, but in fact, is a raw material for making plywood. Even though veneer is chargeable to excise duty under the Central Excise and Salt Act, nonetheless, it remains an agricultural produce since veneer does not by itself become a distinct commodity in the commercial world. 26. In support of his contention, the learned counsel for the respondents placed reliance upon a decision of the State of Assam Vs. Tumba Saw and Veneer Mills, Tumpa, Arunachal Pradesh AIR 2002 Gauhati 97, Bihar Plywood Manufacturers Association & others Vs. State of Bihar & others AIR 2004 Patna 17, Paharpur Cooling Tower Ltd. Vs. Krishi Utpadan Mandi Samiti, Ghaziabad AIR 1992 Allahabad 225 and Park Leather Industry (P) Ltd. & another Vs. State of U.P. & others 2001 (3) SCC 135 . 27. In the State of Assam (supra), a division bench of the Gauhati High Court after considering the process of conversion of the raw material i.e. timber into veneer held that the entire process of manufacturing veneer only shows that veneer retains all the quality of a timber both physically as well as chemically. The Gauhati High Court held that mere putting the logs into a mechanical process to make veneer for manufacturing plywood, does not cease its basic characteristic of a timber. The Division Bench held that :- “11. ‘Veneer’ is raw materials converted from green logs for manufacturing plywood. Initially trees, being the forest produce, are cut into pieces and tops are removed to be known as ‘Timber’. These pieces of such ‘Timber’ called as logs, are taken to the factory to be peeled out by some mechanical means. The Division Bench held that :- “11. ‘Veneer’ is raw materials converted from green logs for manufacturing plywood. Initially trees, being the forest produce, are cut into pieces and tops are removed to be known as ‘Timber’. These pieces of such ‘Timber’ called as logs, are taken to the factory to be peeled out by some mechanical means. The logs, firstly, are cut into sections according to the required sizes of ‘Veneer’, barks of the logs are removed and the nacked sections logs are fitted within the peeling machine by using mechanical process where logs are moved in a circular motion. Thereafter the thin layers of ‘Timber’ being sliced, come out. These thin layers are thereafter cut into different sizes which make the ‘Veneer’. 12. The entire process of manufacturing ‘Veneer’ goes to show that the ‘Veneer’ retains all the quality of ‘Timber’ both physical as well as chemical even as mechanical process is required for making ‘Veneer’. Candidly the factual position is that originally trees are cut into pieces to make logs which are later on put into mechanical process to produce ‘Veneer’. The argument that since Veneer is a finished product and is the outcome of manufacturing process, the same cannot be termed to be a ‘Forest produce’, cannot be countenanced. Because one should not forget that ‘Veneer’ is originally manufactured from logs. Mere putting it in the mechanical process to make ‘Veneer” for manufacturing the plywood, the logs does not cease its basic character of ‘Timber’. 28. In Bihar Plywood Manufacturers Association (supra), a Division Bench of Patna High Court found that veneer is a fashioned wood and therefore a timber and a forest product which comes within the meaning of the Indian Forest Act and that veneer does not loses its identity as a timber. The Division Bench of Patna High court held :- “17. Veneer, as contended on behalf of the petitioner, is certainly not a part of the tree in its natural form. It is the result of a mechanical process and human labour. It is also true that it is a distinct commodity in commercial world. But it is not correct to say that it is the end product or final product. It is in fact a raw material for making plywood. This, however, is not the true test. The true test, in my opinion, is whether it is a forest produce. It is also true that it is a distinct commodity in commercial world. But it is not correct to say that it is the end product or final product. It is in fact a raw material for making plywood. This, however, is not the true test. The true test, in my opinion, is whether it is a forest produce. In terms of Section 2(6) of the Forest Act all wood - whether fashioned or hollowed out for any purpose or not - are timber and therefore, forest produce under Section 2(4). Merely because layers are extracted by mechanical process or as a result of human labour it does not mean that it loses its identity as timber. In these premises I do not think the decision in Woodman Industries' case requires reconsideration. It has therefore to be held that dispute or issue raised in the case is covered by the decision in that case.” 29. In Paharpur Cooling Tower Ltd. (supra), the Allahabad High Court held that cutting and trimmings of a tree are wood on which mandi fee is payable. The Division Bench held :- “4. Having given the matter our careful consideration, we find it difficult to accept the petitioner’s contention. We have not the slightest doubt that the cuttings and trimmings arising from the simple process of sawing and drilling of wood are themselves nothing but wood. They retain their basic identity and characteristics as wood. The term ‘wood’ mentioned as item No.2 under the head ‘H’ of the Schedule to the Act has been used in a generic sense and is wide enough to comprehend all forms of wood within its scope from whatsoever source obtained, and, by whichever process produced. Indeed in the context of the Statute wood is the genus. The cuttings and trimmings are but the species of wood. The shape or size or form of wood is, to our mind, not material. These cannot change the basic characteristic or identity of wood." 30. In Park Leather Industry (supra), the question was whether the term “hides and skins” under Entry 11 of Part-G of the Schedule to the Krishi Utpadan Mandi Adhiniyam, 1964 covers tanned leather. According to the appellant, tanned leather was a manufactured commodity and was not derived by processing hides or skins. It was contended that tanned leather was a commodity entirely different from hides and skins. According to the appellant, tanned leather was a manufactured commodity and was not derived by processing hides or skins. It was contended that tanned leather was a commodity entirely different from hides and skins. The Supreme Court after analyzing the terms “hides and skins” has interpreted on the basis of the expression “agricultural produce” as set out in Section 2(a) of the Act. The Supreme Court held that the definition of “agricultural produce” makes it clear that an agricultural product would be a produce which is specified in the Schedule or one which is an admixture of two or more items and would also include an item in a processed form. The Supreme Court held that it would make no difference if the item concerned was a different commodity from one which was included in the Schedule and that it was possible by virtue of an admixture of two or more items and by processing it, a different commodity or item could come into existence. The Supreme Court held that the conversion of hide and skin into a tanned leather was only a process of cleaning and adding preservative and, consequently, tanned leather even though it may have changed in physical appearance and, even though, it may be a commercially different item it would still remain hide or a skin. The Supreme Court held:- “20. A perusal of Section 2(a) of the said Act makes it clear that an agricultural product would be a product which is specified in the Schedule or one which is admixture of two or more items and would also include any such item in a processed form. In our view it makes no difference, for the purposes of the said Act, that the concerned item is a different commodity from the one which is included in the Schedule. It is possible that by virtue of an admixture of two or more items or by virtue of processing a different commodity or item may come into existence. Even though a different commodity may come into existence, it would still be an 'Agricultural produce. This is best illustrated by Sugarcane which is in Schedule A, Item VIII at Serial No.14. From Sugarcane, "rab" and "gur" are manufactured. They are already different commodities or items. Yet they are all included. Even though a different commodity may come into existence, it would still be an 'Agricultural produce. This is best illustrated by Sugarcane which is in Schedule A, Item VIII at Serial No.14. From Sugarcane, "rab" and "gur" are manufactured. They are already different commodities or items. Yet they are all included. The specific inclusion of items like "gur, rab, shakkar, khandsari and jaggery" is to make it clear that merely because it becomes a different item or commodity it is not excluded.” 31. In Collector of Central Excise, Shillong Vs. Wood Craft Products Ltd. 1995 (3) SCC 454 , the Supreme Court after considering various dictionaries held that veneer is a thin layer or sheet of wood that is uniform in thickness. The Supreme Court held :- “16. The significant words are "plywood", "veneered panels" and "laminated wood" with reference to the meaning of which, the ambit of Heading No.44.08 has to be determined. In the Oxford Encyclopedic English Dictionary, the meanings given are: “Plywood a strong thin board consisting of two or more layers glued and pressed together with the direction of the grain alternating. " "Blockboard a plywood board with a core of wooden strips." "Lamination the manufacture by placing layer on layer." The New Encyclopedia Britannica, Volume 19, Macropaedia, under the heading "Forestry and Wood Production", in the section "Wood Utilization" at pages 420-21 states - "Veneer. - Veneer is a thin layer, or sheet, of wood that is uniform in thickness "Plywood and laminated constructions. Plywood and laminated constructions arc glued-wood products. Although gluing is an old art, practiced since ancient times the modem development of various products was made possible by the improvement of glues especially by the production of synthetic resin adhesives. Plywood is a panel product manufactured by gluing together one or more veneers to both sides of a veneer solid wood, or reconstituted wood core. In the case of solid-wood-core plywood and reconstituted-wood-core plywood, an additional intermediate step is the production of cores, which are made by lateral gluing of blocks or strips of wood or by gluing oriented wood chips or flakes with adhesives. "Another important glued product is laminated wood.” 32. Having heard the learned counsel for the parties at some length and having pondered over the rival contentions raised, the court finds that the case of Krishi Utpadan Mandi Samiti, Kanpur Vs. "Another important glued product is laminated wood.” 32. Having heard the learned counsel for the parties at some length and having pondered over the rival contentions raised, the court finds that the case of Krishi Utpadan Mandi Samiti, Kanpur Vs. Ganga Dal Mill & Company 1984 (4) SCC 516 clearly defines the line of path that is required to be taken in deciding the matter in the said case. The question was whether ‘dal’ or legume was an agricultural produce, and therefore, exigible to market fee or not. It was contended that the ‘dal’ was not specified in the Schedule and was a distinct commodity and, consequently, no market fee was payable. The Supreme Court in order to resolve the controversy held that one has to confine the material from the definition of the expression “agricultural produce” as set out in Section 2(a) of the Act. The Supreme Court held that no resort can be taken to decisions under entirely different statutes, such as the sales tax law, to find out whether the products were the same or two different and independent products commercially so recognized. It was further held that it was an indisputable canon of construction that where an expression was defined in the statute, unless there was anything repugnant in the subject or context, the expression had to be construed as having the same meaning assigned to it in the dictionary clause of the statute. It was held that ‘dal’ was nothing else but a whole grain split into two folds in its processed form acquired by a manufacturing process and therefore an agricultural produce. The same view was again reiterated by the Supreme Court in Park Leather Industry’s case (supra) 33. In the light of the aforesaid, the court finds from a reading of the definition of “agricultural produce” as set out in Section 2(a) of the Act that the term agricultural produce has to be given a wide meaning in as much as the definition indicates that an agricultural produce could be an admixture of two or more items specified in the Schedule as also any such item in its processed form. 34. In Krishi Utpadan Mandi Samiti Vs. Shankar Industries 1993 Suppl. 34. In Krishi Utpadan Mandi Samiti Vs. Shankar Industries 1993 Suppl. (3) SCC 361 (II), the Supreme Court held that a wide interpretation had to be given to Section 2(a) of the Act as the meaning was exhaustive and not restricted to the items in the Schedule. The Supreme Court held that the items which came into being in a processed form would be included and would be an agricultural produce and that the market fee could be levied on such items. 35. In the light of the aforesaid, the decisions cited by the learned counsel for the petitioner under the Forest Act or under the Central Excise Act and Salt Act loses its importance and the same cannot be considered when a clear interpretation of an agricultural produce can be made out from the Act itself. 36. The distinction between “manufacture” and “process” has been a subject of debate in various decisions of the Supreme Court. In Kores India Ltd. Chennai (supra), the Supreme Court analysed what is manufacture and process and held that :- “11. Manufacture implies a change but every change is not manufacture, yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is the end result of one or more processes through which the original commodities are made to pass. The nature and extent of processing may vary from one class to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered the original commodity experiences a change. Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. But it is only when the change or a series of changes takes the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to (sic that the) manufactured product emerges. Process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to (sic that the) manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. (See Collector of Central Excise, Jaipur v. Rajasthan State Chemical Works, Deedwana, Rajasthan 1991 (4) SCC 473 . 12. 'Manufacture' is a transformation of an article, which is commercially different from the one, which is converted. The essence of manufacture is the change of one object to another for the purpose of making it marketable. The essential point thus is that in manufacture something is brought into existence, which is different from that, which originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case of processing it is not necessary to produce a commercially different article. (See M/s. Saraswati Sugar Mills and others Vs. Haryana State Board and others 1992 (1) SCC 418 . 13. The prevalent and generally accepted test to ascertain that there is 'manufacture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognized as a distinct and new article that has emerged as a result of the process. There might be borderline cases where either conclusion with equal justification can be reached. Insistence on any sharp or intrinsic distinction between 'processing and manufacture', results in an oversimplification of both and tends to blur their interdependence. (See Ujagar Prints v. Union of India 1989 (3) SCC 488 . 14. To put differently, the test to determine whether a particular activity amounts to 'manufacture' or not is: Does new and different goods emerge having distinctive name, use and character. (See Ujagar Prints v. Union of India 1989 (3) SCC 488 . 14. To put differently, the test to determine whether a particular activity amounts to 'manufacture' or not is: Does new and different goods emerge having distinctive name, use and character. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes 'manufacture' takes place and liability to duty is attracted. Etymologically the word 'manufacture' properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view is a question depending upon the facts and circumstances of the case. (See Empire Industries Ltd. v. Union of India 1985 (3) SCC 314 .” 37. In the light of the aforesaid, one finds that manufacture implies a change and that every change is not a manufacture yet every change of an article is the result of a treatment, labour and manipulation. The test to determine whether a particular activity amounts to manufacture is to see whether a different or a new product emerges which has a distinctive name, use and character. 38. In the present case, the trees are cut into pieces which is known as ‘timber’. These pieces of timber are called logs. These logs are taken to the factory and are peeled by some mechanical process. The peeling of the logs in various sizes are called veneer. The entire process of manufacturing veneer indicates that veneer retains all the quality of timber both physically as well as chemically. Veneer, even though, is manufactured from logs through a mechanical process, yet it does not cease its basic characteristic of a wood and even though it becomes a distinct product under the Central Excise Act, it makes no difference in as much as under the Krishi Utpadan Adhiniyam veneer still retains the basic characteristic of wood even in its processed form and, consequently, is a agricultural produce. The court is of the opinion that by virtue of the processing even though a different commodity may come into existence, it would still be an agricultural produce. The court is of the opinion that by virtue of the processing even though a different commodity may come into existence, it would still be an agricultural produce. The process of cleaning curing and adding preservative in hides and skins which converted into a leather or tanned leather still remains hides and skins. In the same manner, a tree of which the branches are cut, such cuttings and trimmings and sawings of the wood remains a wood and an agricultural produce. The peeling of the wood in different sizes and width by a mechanical process from a logs of wood stills remains a wood. The essential characteristics of a wood is retained in veneer. Merely because layers are extracted by a mechanical process or as a result of a human labour does not make veneer loses its identity as a timber / wood. 39. In the light of the aforesaid, the court finds that the Mandi Samiti was justified in imposing mandi fee on the sale of veneer made by the petitioner since veneer is an agricultural produce. The writ petition being devoid of any merit is accordingly dismissed. In the circumstances of the case, the parties shall bear their own cost.