2004 (3) TMI 452 - AT - Central Excise

Summary

Issues:
- Whether the soap is manufactured with the aid of power.

Analysis:
The appeal in this case revolves around the issue of whether the soap is manufactured with the aid of power. The Appellants, a manufacturing company, argued that they had transitioned to manufacturing soap without the aid of power from a certain date and claimed exemption under a specific notification. They contended that their soap manufacturing process involved manual labor and did not utilize power. However, the Asstt. Commissioner, in the Order-in-Original, disallowed the benefit of the Notification, stating that power was indeed used in certain aspects of soap production. The Commissioner (Appeals) upheld this decision, emphasizing the lack of evidence proving the absence of power usage. The Appellants suggested that a personal visit to their factory or verification by the Revenue was necessary to ascertain the absence of power usage. They also differentiated their current process from a previous Tribunal decision where power was used.

In response, the learned D.R. referred to the findings of the Asstt. Commissioner, highlighting the use of steam in boiling soap stock and power in transferring the soap stock to tanks. The D.R. relied on a Supreme Court judgment stating that if an operation integral to the manufacturing process involves power usage, the entire process is deemed to be with the aid of power. The D.R. argued that the Appellants had not rebutted the findings regarding power usage, as indicated in the Adjudication Order.

Upon considering the arguments from both sides, the Tribunal analyzed the Notification exempting goods manufactured without the aid of power or steam for heating. The Tribunal noted the lack of rebuttal by the Appellants regarding the use of steam and power in specific stages of soap production. Despite the Appellants' emphasis on manual mixing and firewood heating, they failed to dispute the Adjudicating Authority's findings on power usage. Consequently, the Tribunal held that the Appellants did not meet the conditions of the Notification and had not proven compliance. As the burden of proof lay with the Appellants, their appeal was rejected based on the lack of evidence supporting the absence of power usage in soap manufacturing.