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TMI Blog1987 (12) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... . It appears side cuttings etc. arose in the course of the cuttings of the blocks into soap in requisite sizes. 3. The learned advocate for the appellants pleaded that the soap manufactured by them was household laundry soap and the scrap and waste which arose in the process of manufacture and cuttings of the soap blocks were made into chips in another premises with the aid of power. He pleaded that the Tariff Item 15 covered household laundry soap under sub-item 1 and 'Other Sorts' under sub-item 2. He pleaded that the soap manufactured by them was without the aid of power and the scraps etc., which were converted into chips, did not bring into existence any new variety of soap and what was produced was again household laundry soap. He pleaded that the chips are to be for the same purpose as the other forms of soap manufactured by them and making of the soap into chips did not bring into existence any new commodity in their content also. He pleaded that the lower authorities had erroneously held that the making of the soap into chips brought into existence a new article. He referred to the findings of the Collector in para 3 of his order. The same for convenience of reference is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Notification No. 28/64-C.E., dated 1.8.1964. - Delhi Trade Notice No. 107/76, dated 24.8.1976." The learned advocate also pleaded that the appellants had filed a declaration for the manufacture of soap and a demand could be raised only under Rule 10 as applicable then read with 173J and duty could not be demanded beyond a period of six months. He pleaded that Rule 10-A could not be invoked in their case. He stated that Rule 9 could also not be invoked in their case in view of the declaration filed by them. He pleaded that even the departmental authorities had clarified to the soap industry that cuttings of soap chura with the aid of electric machines would not require any Central Excise licence in case the soap was manufactured without the aid of power; He cited the letter of the Superintendent of Central Excise addressed to one of the units in this regard which is reproduced as under : "Please refer to your letter dated 18.1.1965 addressed to this office on the above subject. The cutting of soap chura with the aid of electric machine will not require any Central Excise Licence and it will not render the products so produced as dutiable inasmuch as the process of heating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the soap chips manufactured by the appellants were in the same premises but in a different room and that it was not correct to say that the chips had been manufactured in a separate premises altogether. 5. It is not disputed that what is manufactured by the appellants is household and laundry soap and the chips manufactured by them also answer to same description. The question that arises for our consideration is as to when the manufacture of household and laundry soap can be taken to have been, completed for the purpose of benefit of Notification No. 28/64. It appears from the fact of the case on record that right upto the stage when the soap blocks are produced, no power is used nor is there any use of power in the cuttings of these soap blocks. The manufacture of soap involves various steps which includes the mixing of the various ingredients heating of mixture, setting of the mixture and formation of the same into blocks. After these blocks of soap have been formed these are cut to desired sizes. These processes, it appears from the record, are carried on without the aid of power. In this context therefore the only point to be examined is whether cutting of soap into ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id of power or of steam for heating and falling under this Item is exempt from whole of the duty of excise leviable thereon." It is seen that the notification extends benefit to soap in or in relation to the manufacture of which no process has been carried on with the aid of power or steam. It would thus be seen that soap can be taken to have been manufactured without the aid of power unless it can be said that the cutting of soap is a process related to the manufacture of soap. Now the soap as such emerges in the form of blocks and upto that stage of manufacture no power is used in the appellants unit. The blocks as such as is clear from the departmental trade notice referred to supra can be cleared from the factory for further making them into chips. The soap blocks are recognised as soap in marketable form. As held by the Larger Bench of the Tribunal in the case referred to supra, in this case also the process of manufacture of soap has to be held to be complete when it emerges in the blocks form and it makes no difference for the purpose of the Notification No. 28/64 if chips are manufactured with the aid of power. We therefore hold that in case of manufacture of soap by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of the exemption cannot be denied." In the case before us also once the soap blocks have emerged any process carried out cannot be taken to be a process in the manufacture of soap. The Department has rellied on the judgment of the Larger Bench in the case of Guardian Plasticote Ltd. [1986 (24) E.L.T. 542]. Facts of this case are distinguishable from the judgment in that case inasmuch as here no new product emerges as was the case in the judgment cited as what is cut into smaller sizes is soap and after cutting what is produced is also soap. 6. We observe that the departmental authorities also had earlier held that the making of the soap manufactured without the aid of power into chips with the aid of power would not render the soap chips liable to duty on account of use of power in the manufacture of chips. In the Trade Notice cited before us, the departmental authorities have taken the view that soap manufactured without the aid of power in a factory and cutting of the same into chips with the aid of power in another factory, would not constitute manufacture within the meaning of Section 2(f) of Central Excises & Salt Act. They have, however, stated in the same Trade No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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