Power - Use of power in manufacture of components - Effect - Footwear manufactured without the use of power but out of parts manufactured with the aid of power eligible to exemption under Notification No. 49/86-C.E. - Central Excise - 1/93-CX.4

Power - Use of power in manufacture of components - Effect - Footwear manufactured without the use of power but out of parts manufactured with the aid of power eligible to exemption under Notification No. 49/86-C.E. Circular No. 1/93-CX.4 Dated 2-12-1993 Government of India Central Board of Excise Customs New Delhi Subject : Power - Use of power in manufacture of components - Effect - Footwear manufactured without the use of power but out of parts manufactured with the aid of power eligible to exemption under Notification No. 49/86-C.E. The matter has been examined and it is found that the instructions of June, 1969 (F. No. 8/19/67-CX.2, dated 27-6-1969) mentioned at Para 4 of your letter were issued with reference to the then existing Notification No. 94/67- C.E., of May, 1967 and had to be read with reference to Tariff heading existing then. This Notification was for a factory where both footwear and parts thereof were manufactured and thereafter parts were used in the manufacture of footwear in the same factory. The reliance of CCE, Delhi, on the instructions issued in 1960 and 1969 for footwear are not really relevant as the present Tariff is different from the earlier Tariff. In the present case parts are manufactured by a manufacturer with the aid of power. Such parts manufactured with the aid of power are purchased by another manufacturer of footwear who used such parts for manufacture of footwear without the aid of power. So long, the second manufacturer does not use any power, in or in relation to manufacture of footwear either in his factory or in the factory of his job workers, it cannot be construed that power has been used in manufacture of footwear only because the raw materials bought and used by him had been manufactured with the aid of power. This case is squarely governed by Circular No. 4/87-C.E., dated 19-6-1987 (F. No. 13/1/87-CX.1). In view of the above, footwear falling under Chapter heading 6401.19 will be entitled to exemption from duty under Notification No. 49/86-C.E., if they are made out of parts which have been manufactured with the aid of power.