TMI Blog1992 (3) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... in the show cause notice dated 10-1-1986 is barred by limitation. 2. The brief facts of the case are as follows : The assessees are engaged in the manufacture of various items falling under T.I. 15AA and 68 of the Central Excise Tariff generally used in textile industry and other industries such as paper, pencils and cleaning products etc. The assessees claimed that certain products which were manufactured without the aid of power were exempt from payment of duty as per provisions of Notification No. 101/66 dated 17-6-1966 (S. No. 2). The assessees had also claimed that rest of their products were also exempt from payment of duty under various other notifications. On the surprise visit to the assessee s premises by the Assistant Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essees had argued that the sulphonator had to be packed with chunks of ice from the open cap of the jacket. The assessees had supplied the details of the ice purchased. They had argued that circulation of water in jackets was impossible. 3. The Collector in his order dated 1-5-1986 observed that the issue involved in this case is whether the acid slurry falling under Item No. 15AA manufactured by the assessees is eligible for duty free clearance under S. No. 2 of Notification No. 101/66 dated 17-6-1966. For the benefit under this Notification the goods falling thereunder have to satisfy the following conditions : in or in relation to the manufacture and packing of such surface active agents, no process is ordinarily carried on with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the top lighter layer called the acid slurry separated subsequently. In order to prevent coagulation ice/water is added to reaction mixture. In order to carry out the above manufacturing activity in Kamal Chemical the Sul-phonators are charged with Alkyi Benzene manually through buckets or hand operated pump from the barrels and with acid/acids by way of manually opening the valve of dossage tank installed at a height above the sulphonator. (Here M/s. Kamal Chemicals illustrated the machinery used by them by a diagram.). The contact of acid/acids with Alkyi Bcn/ene raises the temperature as the reaction is exothermic in nature and there is a need to control the temperature of the reaction between 55 C to 60 C for maintaining quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of raw material i.e. for transferring acid from tankers to overhead tanks after November 1984 is not denied and is instead confirmed during the course of the respondents arguments. It is also an admitted fact that in exceptional circumstances of non-availability of ice, the sulphonator jacket was filled by bucket manually and/or by pumping the water from the ground level water storage pond with the help of motor. The respondents however contend that the use of compressor for (a) transferring acid from ground level prior to November 1984 and for (b) taking delivery of acid from supplier s motor lorry to storage tank at a height of 25 feet cannot be considered either a process of manufacture nor an activity incidental to the process of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court held that the transfer of raw material to the reacting vessel is a preliminary operation but it is a pan of a continuous process but for which the manufacture would be impossible. The handling of the raw materials for the purpose of such transfer is then integrally connected with the process of manufacture. The handling for the purpose of transfer may be manual or mechanical but if the power is used for such operation, it cannot be denied that an activity has been carried out with the aid of power in the manufacturing process - The use of diesel pump sets to fill the pans with brine is an activity with the aid of power and that activity is in relation to the manufacture. It is not correct to say that the process of manufacture star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id of power; that they had filed requisite declarations along with schedules as well as exemption applications from time to time and, therefore, no suppression as to the use of power in the process of manufacture of acid slurry can be imputed to them. We find from the reply to the show cause notice dated 27-1-1986 that there was a lot of correspondence exchanged between the respondents and the Department and the respondents appeared to have filed invoices, declarations, etc. However, the Collector has merely relied upon visits of Departmental officers to the factory for a prolonged period to hold that no charge can be made for the suppression of relevant information. He does not appear to have considered the documentary evidence placed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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