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TMI Blog1993 (11) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... mpt from payment of CED under the provisions of Notification No. 179/77, dated 18-6-77, as in the manufacture of goods covered thereunder, no power was used. The said list A contained the following items : List A item No. 1 Thermit Portion It was stated by assessee that Thermit Portion was manufactured by manually mixing the items (i) Aluminium Granules (ii) Mill scale (iii) Ferro Manganese (iv) Nail Chippings in a hand operated mixing tower. As such they claimed the benefit in terms of the Notification No. 179/77, dated 18-6-77. However, they had stated that the ingredients of Thermit Portion viz. Aluminium Granules Mill Scale and Ferro Manganese were manufactured in their own factory with the use of power. Nail chippings were said to be purchased from the market. The process of manufacture of the ingredients (i) to (iii) furnished by assessee is given below : (i) Aluminium granules : This is manufactured by melting the Aluminium ingots in an oil fired furnance and thereafter transferring the same to a shaking machine which is electronically operated. As a result molten aluminium becomes powder and which is known as Aluminium Gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that evidence on record indicates that while two of the raw materials Aluminium powder and Roasted Sieved Mill Scale are manufactured in the factory in different processes and they are commercially distinctly identifiable commercial products, while two other i.e.. Nail Chippings and Ferro Manganese are obtained from market i.e. they are bought out items. He has further held that - Mixing of these items for the manufacture is admittedly done in a hand operated tower without the aid of power. As such the Asstt. Collector was not correct in arriving at the conclusion that the process of manufacture of the raw-materials become a link in a chain of process ending in the manufacture of thermit portion or that the manufacture of the raw-materials came under the category of process incidental or ancillary to the completion of the manufacture. The manufacture of the raw materials are distinct processes and they are also admittedly different commercial commodities and they are not the same as the process of manufacture of thermit portion and Ferro Alloys. The appellant is justified in holding the view that Section 2(f) of the Central Excises Salt Act, 1944 does not contemplate the prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and refined with the aid of power. Thereafter, these two items are mixed manually and packed up. Therefore, for the purpose of manufacture of Thermit Portion , the processes are continuous and carried on from the stage of manufacture of Aluminium Granules or from Aluminium and Roasting and refining of Mill Scale. They contend that the process of converting Aluminium into Aluminium Granules and roasting and refining is a process only incidental or ancillary to the completion of Thermit portion which reaches the stage of completion only when these two raw-materials are processed and mixed up with the other two raw materials viz. Nail Chippings and Ferro Manganese. Hence the item is not entitled to the benefit of the Notification No. 179/77, dated 18-6-77. In the case of item Ferro Alloys, it is stated that the items are manufactured by an admixture of Aluminium powder and other raw-materials purchased from the market. Aluminium powder is manufactured in the factory with the aid of power and hence the benefit would not be available. As regards Togo Tenex, power is used in its manufacture as started above. Shri S.K. Sharma reiterating these grounds relied on the rulings rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The question would have been quite different, had any of the ingredients not suffered duty and was not in a marketable condition. The admitted position is that these ingredients are independently marketed and removed from the factory by suffering duty. In view of this admitted position of each ingredient having come into existence as a separate independent duty paid goods, and also that all the ingredients are merely mixed manually without the aid of power, the benefit of the Notification No. 179/77-C.E., dated 18-6-77 cannot be denied to the goods Thermit Portion Ferro Alloys . As regards, the item Togo Tenex , there is no serious contest from the assessee side that the electric blower is used for the purpose of quick burning of oil. The use of electric blower facilitates Oxydation and quick burning and it is a process which is incidental and ancillary to the completion of the process of manufacture, therefore, this item is clearly not entitled to the benefit of the notification. The Hon ble Supreme Court in the case of Rajasthan State Chemical Works has clearly interpreted the use of power in the concluding paras 20 to 22 which are reproduced herein below : 20. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat manufacture of fire works requires cutting of steel wires and the treatment of papers and, therefore, it is process for manufacture of goods in question. The Notification purports to allow exemption from duty only when in relation to the manufacture of goods no process is ordinarily carried on with the aid of power. It was observed that cutting of steel wires or the treatment of the papers is a process for the manufacture of goods in question. 22. We are, therefore, of the view that if any operation in the course of manufacture is so integrally connected with the further operations which result in the emergence of manufactured goods and such operation is carried on with the aid of power, the process in or in relation to the manufacture must be deemed to be one carried on with the aid of power. In this view of the matter, we are unable to accept the contention that once the pumping of the brine into the salt pans or the lifting of coke and limestone with the aid of power does not bring about any change in the raw-material, the case is not taken out of the Notification. The exemption under the Notification is not available in these cases. Accordingly, we allow these appeals. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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