1996 (9) TMI 405 - AT - Central Excise

Summary

Issues:
Benefit of Notification 46/89 in respect of use of minor oils in the manufacture of soap.

Analysis:
The issue in the appeal pertains to the benefit of Notification 46/89 concerning the use of minor oils in soap manufacturing. The notification provides certain conditions for eligibility, and the lower authority held that condition No. 2 of the notification was not fulfilled by the appellants. The advocate for the appellants argued that their goods were classified as soap under Tariff Heading 3401.10, making them eligible for the notification. He emphasized that the goods were assessed and cleared as soap, and any further processing by job workers should not affect their eligibility for the notification. The advocate contended that as long as the soap was manufactured in the factory and met the criteria of being classified as soap, the benefit of the notification should apply.

The Department's representative argued that since the soap was further processed outside the factory by buyers into smaller sizes for marketing, all processes required for the benefit of the notification were not completed within the appellants' factory. They claimed that the soap in its marketable form was essentially manufactured by job workers, not solely within the appellants' factory. However, the Tribunal noted that the appellants had manufactured bars and noodles of soap, which were cleared from the factory after duty payment under Tariff Heading 3401. It was acknowledged that the authorities had approved the goods as soap when cleared from the factory. Therefore, the Tribunal found merit in the appellants' argument, supported by relevant case law, that the products emerging from their factory were indeed soap. As long as the processes leading to the soap's production were carried out in the factory, the appellants were entitled to the notification's benefit. Consequently, the Tribunal allowed the appeal of the appellants, ruling in their favor.