Full Judgment
2. Shri A.K. Jain, Ld. DR submits that it is an admitted fact that both top and bottom lids which are purchased from M/s. Sterling Components are manufactured by use of power. Following the ratio of the Supreme Court Judgment in the case of Standard Fire Works Industries v. CCE , the benefit of Notification is not available as the power has been used in the manufacture of both the lids.
3. Shri Gopal Prasad, Ld. Advocate, submitted that the Respondents have not used power themselves. In Standard Fire Works Industries, the steel wire was sent by the manufacturer for cutting into small pieces by the job workers who were using the power and as such it was held by the Supreme Court that the power was used. He relied upon the decision of the Delhi High Court in the case of fain Soap Mills v. UOI 979 ELT (J147) in which it was held that while interpreting such notification one must confine to the activities of the manufacturer in whose hand the product was subjected to duty and as the appellants did not use the power in the manufacture of goods the benefit of the Notification to the product was extended as use of power was in respect of soap stock purchased from others.
4. We have considered the submissions of both the sides. Notification No. 181/88 provides exemption from payment of duty if the goods have been manufactured without the aid of power. The Department has not adduced any evidence to prove that the Respondents have used the power themselves or had sent certain components to other for being manufactured with the aid of power. They have purchased the top and bottom lids on payment of duty from another manufacturer namely M/s.
Sterling Components; the fact whether the Sterling Components was using power or not will not make the use of power by the Respondents. The facts here are different from the facts in the case of Standard Fire Works (supra). The Collector (Appeals) has relied upon the decision in the case of G.S. Industries v. CCE Tribunal relying upon the Delhi High Court decision in the case of Jain Soap Mills (Supra) held that close reading of the Notification No.89/79 shows that it applies to a manufacturer who manufactures goods in which no process is ordinarily carried on with the aid of power and as he had purchased merely the components from the 3rd parties on a principal-to-principal basis and had no financial interest in the other manufacturer, the benefit of notification cannot be denied to them. The Ld. DR mentioned that they were getting these components made from Sterling Components as per their specifications and as such it amounts to use of power. We do not find any substance in this argument, first of all because the Respondents before the Collector (Appeals) had clearly submitted that these lids were not made according to their specifications but as per the ISI specifications and no evidence has been brought on record to substantiate the claim of the department that these were made according to the specification of the appellants.
Secondly, as observed by the Tribunal in the case of G.S. Industries case, (supra), the department has not shown that the purchase of the lids was not on principal-to-principal basis and the Respondents had any interest in Sterling Components. In view of these facts we do not find any infirmity in the impugned order and we reject the appeal filed by the Revenue.