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TMI Blog1996 (9) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Rs. 1,00,000/- on M/s. Walker (India) Ltd., Mumbai. I also impose a personal penalty of Rs. 10,000/- on Shri Karim B. Jiwani, the Director of the company." 2. The facts of the case are that the Preventive Officers of Central Excise visited the factory of M/s. Walker (India) Ltd., one of the appellants in this case on 23-12-1993 and found the unit manufacturing shoes falling under Chapter 64 and clearing the goods without observing any Central Excise formalities on the ground that the said footwear were being manufactured without the aid of power and were sold at a price below Rs. 60/- per pair. The appellants also availed the benefit of Notification No. 49/86, dated 10-2-1986 as amended. On taking a round in the factory, the officers found machines which are power operated. Preliminary investigations revealed that M/s. Walker (India) Ltd. was using power and these machines in the manufacture of footwear. The officers therefore, seized the goods. The investigations revealed that M/s. Walker (India) Ltd. cleared goods worth of Rs. 13,29,546.40 during the year 1989-90 and goods worth of Rs. 40,79,926/- during the period 2-4-1990 to 23-12-1990 without payment of duty and av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellants had filed declaration in the year 1989-90 describing their process of manufacture; that the officers of the Department had visited the factory and satisfied themselves on the question of admissibility of concession of Notification No. 49/86 and Notification No. 175/86; that show cause notice dated 29-4-1992 was time barred; that power operated machines were not being used in respect of hand-made shoes and therefore, the appellants were entitled to the benefit of exemption that the ld. Collector wrongly held that hand-made shoes were made out of parts which in turn are made with the aid of power-operated machines for a period of about one week; that the Collector had wrongly held that it follows that appellants had made parts in respect of hand-made shoes with the aid of power-operated machine during the period 2-4-1990 to 23-12-1990; that the appellants' Director Mr. Karim B. Jiwani, in his statement dated 24-12-1990 has very categorically stated that they have been using power for cutting leather for all types of shoes including hand-made shoes very recently so as to increase the production; that this statement is to be read in the light of the fact that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted that Mr. Akbar Jiwani, Director of the appellants' company, in his statement, recorded on 24-12-1990 stated that the appellants were using power for cutting leather for all types of shoes to increase the production; that Shri Karim B. Jiwani, the other Director of the firm confirmed that they were using power for cutting leather for all types of shoes; that no doubt, in reply to the show cause notice, the appellants had contended that power was used for a week or so just to complete the festival orders. He submitted that this contention cannot be accepted as no concrete evidence has been brought on record to show that it was only for a short period to meet the festival rush of orders; that power was being used in respect of hand-made shoes for embossing the trade mark. He submitted that the contention of the appellants that manufacture of hand-made footwear was complete even without the embossing of the trade mark is not tenable inasmuch as all the shoes were being embossed before clearance. He submitted that since every bit of the hand-made footwear is being embossed with trade mark, therefore, embossing was an integral part of the completion of the process of manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 since 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 materials, 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 the facts and circumstances of the case, we make no order as to costs." We also observe that the Apex Court in the same judgment in Para 17 held that what does "manufacture " mean? For this purpose, Para 17 of the order is reproduced below : "17. The transfer of raw material to the reacting vessel is a preliminary operation but it is part 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 power is used for such operations, it cannot be denied that an activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he treatment of paper is a process for the manufacture of goods in question. Since those processes were carried on with the aid of power though requirement of the Notification would not be answered so as to entitle the appellants to exemption from duty. It is not necessary to refer to any authority inasmuch as on the analysis indicated above the claim for refund appears to have been rightly rejected." Following the judgment of the Supreme Court in the cases cited above, we hold that cutting of leather and embossing of the footwear with the brand name is manufacture for the purpose of levy of duty. We also hold that the power operated machines in cutting the leather and embossing the trade mark on footwear is used in the manufacture of hand-made footwear. In this view of the matter we hold that the benefit of Notification No. 49/86 as amended by Notification No. 175/86 for non-use of power shall not be admissible to the appellants. 7. On the question of deduction of freight and transport charges, we agree with the findings of the ld. Collector, Central Excise holding that in the absence of any documentary evidence in this regard, the deduction cannot be allowed. 8. Inso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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