TMI Blog2013 (1) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... the final product - Held that:- The respondent is a Proprietary concern. No oral evidence of its proprietor was taken by the Department. In these circumstances, Ground which is to the effect that the assessee admitted that the quality control equipments and machinery were operated with the use of power has no substance. The appellant (revenue) has not been able to come anywhere near proving the use of power by the respondent in the manufacture of MEDIMIX soap during the material period. - That electrically operated equipments were used for testing raw materials and the final product is a far cry or a ipse dixit. - Decided in favor of assessee. - E/189/2005 - 940/2012 - Dated:- 6-12-2012 - Shri P.G. Chacko And Shri Mathew John, JJ. Shri K.S.V.V. Prasad, Jt. Commissioner (AR), for the Appellants Shri C. Saravanan, Advocate for the Respondent Per P.G. Chacko In this appeal filed by the Department, the short question is whether the Ayurvedic soap manufactured by the respondent (assessee) and cleared under the brand name MEDIMIX during the period from August 1999 to April 2001 was classifiable under sub-heading 3401.12 of the First Schedule to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions of the learned Joint Commissioner (AR) are summarized below:- (a) The respondent used electrically operated equipments in the factory to test palm oil and coconut oil (raw materials) for determining their saconification values as also test caustic soda lye (raw material) for its concentration (percentage of Sodium Hydroxide) and specific gravity, as also to test the final product (soap) for its PH value, free fatty acid content and total fatty acid content. These laboratory tests were integrally connected with the process of manufacture of the soap. Moreover, power was also used to unload caustic soda lye from tankers. For these reasons the final product was appropriately classifiable under sub-heading 3401.19 of the CETA Schedule and chargeable to duty of excise. (b) Officers of the Department who searched the factory premises in November 2000 noticed that power was being used for the aforesaid purposes and therefore the learned Commissioner ought to have confirmed demand of duty for the period from August 1999 to November 2000 atleast. (c) That the quality control equipments were operated with the aid of power was admitted by Shri T. Karthikeyan, Chemist, in his sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw materials and the final product in the present case also should be held to be integrally connected with the process of manufacture of the final product (soap). 4. The learned counsel for the respondents made the following submissions:- (a) Though the equipments / apparatus mentioned in the mahazar were available in the factory at the time of the visit of the officers of the Department, there is no evidence of such equipment / apparatus having been actually used in the process of manufacture of soap by the respondent during the material period. No statement of the proprietor was recorded by the officers. The statement given by Smt. P. Ponnammal, Assistant Manager (Office Administration) does not contain anything to indicate that any electrically operated equipment / apparatus was employed for testing raw materials or the final product. The statement given by Shri T. Karthikeyan is not reliable as he was only a trainee who was not fully trained in analysis of oils and soaps. Even his statement does not prove, beyond the pale of doubt that electrically operated equipments / apparatus were actually used for testing raw materials or finished goods in the factory during the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had no connection with the process of manufacture of the final product and accordingly exemption under Notification No. 230/86-CE dated 3.4.1986 (based on manufacture without the aid of power) was denied to the assessee. It is nobody s claim that Final Order No. 1483/2007 ibid was not accepted by the Department. In this scenarios, we are inclined to accept the submission of the respondent that their product cannot be classified under sub-heading 3401.19 by reason of the fact that power was used to bring one of the raw materials to the factory. 7. As regards testing of raw materials and the final product, we find that the appellant is yet to prove that electrically operated equipments were used for such testing in the respondent s factory during the period of dispute. Some equipments were found in the factory by the investigating officers of the Department in November 2000. The respondent has claimed that these equipments were removed from the factory soon thereafter under intimation to the Department. This claim has not been contested in the appeal. The question, therefore, to be considered now is whether these equipments were electrically operated and used for testing raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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