TMI Blog2000 (5) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 years in their factory. Prior to Notification No. 230/86, dated 3-4-1986 they were availing the benefit of exemption in terms of Notification No. 179/77-C.E., dated 18-6-1977, which exempted products falling under Erstwhile Tariff Item 68, in case no power had been used in the manufacture of the said product. Explaining the case he submits that thinners are manufactured out of solvents. Such solvents are purchased by the appellants in fully manufactured condition and are used in their factory for manufacture of not only thinners but the other products also. He submits that more than 90% of the solvents brought in their factory are used in the manufacture of paints, varnishes and other allied material and it is only a small percentage of less than 10% of solvents which are used in the manufacture of thinners. He submits that the thinners in their factory are manufactured at two places, the Cellulose section and Varnish section according to the required quantities. He submits that nearly 75% of their total production of thinner is made in the Cellulose section and there is no other head tank in the said section and the materials are brought there in barrels/drums manually and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that right from the stage of raw materials, i.e. the solvents being taken to the place of manufacture in barrels till the finished final stages when the fully manufactured thinners are ready for despatch, no powers are used in any stage in any of the processes undertaken for the manufacture of thinners. 4.At this stage ld. Adv., very fairly, draws our attention to the Tribunal's decision in the case of Premier Credits Ltd. v. CCE 1999 (114) E.L.T. 271 (T) = 1998 (29) RLT 880, wherein use of power in pumping raw materials from storage tank to mixing vessels for mixing that industrial solvents has been held to be use of power in the manufacture of thinners and the benefit of exemption Notification No. 230/86-C.E., dated 3-4-1986 has been denied. However, he submits that the ratio of the above decision will not apply to their case inasmuch as the facts of that case and the facts of the instant case are miles apart. In that case the power was being used for pumping of the solvents from the storage tanks to the mixing vessels, whereas no such power has been used in the instant case inasmuch as admittedly the solvents are being carried out manually to the manufacturing section after b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icates use of power in the said section. He submits that such sockets were normally electric fittings and were fitted in other different sections of the factory. No adverse inference can be drawn from this fact. Such socket was not found in the Cellulose section but was outside the said section because in the said section highly inflammable material is there and open electrical socket can be hazardous. Similarly he submits that reliance by the adjudicating authority on the statement of one Mr. Mondal who was one Jr. electrical mistry and had come to the said section in the presence of the Central Excise officers for the purpose of carrying out some electrical connections is irrelevant inasmuch as Mr. Mondal is not connected with the production at all and has nowhere clearly stated that the power was ever used in the manufacture of thinners. He submits that Shri B. Sarkar who was the authorised representative of the company had denied having ever used the small pump fitted on the trolly for the purpose of pumping of raw material to the thinner manufacturing vessel. As such he submits that the findings of the adjudicating authority which neither justified nor warranted, based upon ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance on the Constitutional Bench of the Hon'ble Supreme Court in the case of Cotspun-1999 (113) E.L.T. 353 (S.C.) = 1999 (34) RLT 709 (S.C.). 8.In view of the foregoing he prays for setting aside the demand of duty and penalty imposed upon the appellants. 9.Countering the arguments Shri R.K. Roy, ld. JDR appears for the Revenue and reiterates the reasoning of the authorities below. He submits that the Commissioner has rightly relied upon the presence of electrical socket in the varnish section of the appellants' factory which indicates that they have been using power for transferring the raw materials into the mixing vessel. Further more reliance on statement of Shri Mondal who is appellants' own employee, is proper for arriving at a finding of use of power in the appellants' factory. As regards limitation, Shri Roy submits that the adjudicating authority has given a detailed reasoning for invoking the larger period of limitation inasmuch as the appellants have been suppressing the fact of use of power in the manufacturing operation of thinners. 10.We have considered the submissions of both the sides. We find that latest decision of the Tribunal in the case of Premier Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch transfer (transfer from tanks to mixing vessel) was held to be integrally connected with the process of manufacture. As such it can be safely concluded that the manufacturing process of thinners starts from taking of the solvents from the overhead tanks which process is done by filling barrels by gravitational force and not by use of any powers. As such it cannot be said that use of power for simply storage of a raw material, which the appellants have stored in their factory premises for future use of the same in the manufacture of thinners as also in the manufacture of other products is use of power in the manufacture of thinners. 11.The Commissioner has also observed that use of power even for the limited purpose of storage of raw materials will put the manufacturing process of thinners well outside the purview of the expression "made without the aid of power". However, he has failed to appreciate that such use of power was not for drawing of solvents from the storage tanks up to the mixing vessel, but was primarily and necessarily used for emptying the lorries into the tanks and then transferring it to the overhead tanks, which process by no stretch of imagination can be h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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