Malwa Vanaspati and Chemical Co. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. in this appeal filed by m/s. malwa vanaspati & chemical co. ltd., the issue involved is whether the soap is manufactured by them with the aid of power.2. shri b.b. khare, learned advocate, submitted that the appellants manufacture vegetable oil/vegetable product vanaspati and soap; that till july, 1993 they were manufacturing soap with the aid of power; that w.e.f. 23-8-93 they changed their manufacturing process and started manufacturing soap without the aid of power and claimed exemption under notification no. 28/64, dated 1-3-64 as amended; that in reply to the show cause notice issued to them for denying the benefit of notification they had mentioned that they were manufacturing soap with the base raw material as acid oil, soap scrap, sodium silicate, and raw non-edible oil and that heating was being done by fire wood and other refuse; that the soap section had been isolated and there was no steamline in the said section; that in the soap section at no stage i.e. bring the raw material to the soap section or emptying the raw materials any power is being used and all the process of manufacture was carried out on manually; that however, the asstt.commissioner under order-in-original no. 21/94, dated 1-12-94 disallowed the benefit of the notification; that the commissioner (appeals) also under the impugned order has rejected their appeal on the ground that they had not adduced any evidence to show that the transfer of soap stock was with force of gravity and that no power was used for taking the material in question to storage place from where it is flowed down by gravity and that the appellants had not indicated whether steam was no more being used by them. the learned advocate, further, submitted that the appeal could have been decided by the commissioner (appeals) after personally visiting their factory or deputing the range suptd. to find out as to the fact whether they were using any power in the manufacture of soap or not; that such a dispute cannot be decided without inspecting the premises; that they had clearly mentioned in their reply to the show cause notice that the soap plant had been totally isolated from the vegetable product plant and this fact should have been verified by the revenue by doing spot adjudication; that the decision of the tribunal in their own case as reported in 1988 (35) e.l.t. 693 (tribunal) is not applicable to the present case as at that relevant time they were using power in the manufacture of soap whereas in the present matter they have stopped using power from 23-8-1993.3. countering the arguments shri virag gupta, learned d.r., referred to the specific finding of the asstt. commissioner in the order-in-original wherein it has been mentioned that in the appellants' factory steam is used in boiling soap stock and power is used in transferring the soap stock to the soap stock tanks; that no rebuttal has been made by the appellants in this regard. he relied upon the decision of the supreme court in the case of cce, jaipur v. rajasthan state chemical works, 1991 (55) e.l.t. 444 (s.c) wherein it has been held that if operation in the course of manufacture is so integrally connected with the further operation which results in the emergence of manufactured goods and such operation is carried out on with the aid of power, the process in or in relation the manufacture must be deemed to be one carried on with the aid of power; that in the said judgment pumping of the brine into the salt pans or the lifting of coke and limestone with the aid of power was treated as using power in the manufacture of finished product.4. we have considered the submissions of both the sides. notification no. 29/69 (sic) as amended exempts goods in or in relation to the manufacture of which no process has been carried on with the aid of power or steam for heating. as emphasized by the learned d.r. there is no rebuttal by the appellants of the findings contained in the adjudication order to the effect that steam is used in boiling soap stock and power in transferring the soap stock to the soap stock pans.the appellants have only emphasized that they are mixing raw material in the soap section without using any power and heating is done by firewood and other refuse. they have nowhere controverted the finding of the adjudicating authority that steam is not used in boiling soap stock. in view of this the appellants have not succeeded in establishing the compliance with the condition specified in notification no. 28/64. the onus of proof is on the appellants that they had complied with the condition of the notification. they have not successfully discharged their onus of proof. we, therefore, reject their appeal.

Judgment:
1. In this appeal filed by M/s. Malwa Vanaspati & Chemical Co. Ltd., the issue involved is whether the soap is manufactured by them with the aid of power.

2. Shri B.B. Khare, learned Advocate, submitted that the Appellants manufacture vegetable oil/vegetable product Vanaspati and soap; that till July, 1993 they were manufacturing soap with the aid of power; that w.e.f. 23-8-93 they changed their manufacturing process and started manufacturing soap without the aid of power and claimed exemption under Notification No. 28/64, dated 1-3-64 as amended; that in reply to the show cause notice issued to them for denying the benefit of Notification they had mentioned that they were manufacturing soap with the base raw material as acid oil, soap scrap, sodium silicate, and raw non-edible oil and that heating was being done by fire wood and other refuse; that the soap section had been isolated and there was no steamline in the said section; that in the soap section at no stage i.e. bring the raw material to the soap section or emptying the raw materials any power is being used and all the process of manufacture was carried out on manually; that however, the Asstt.

Commissioner under Order-in-Original No. 21/94, dated 1-12-94 disallowed the benefit of the Notification; that the Commissioner (Appeals) also under the impugned Order has rejected their appeal on the ground that they had not adduced any evidence to show that the transfer of soap stock was with force of gravity and that no power was used for taking the material in question to storage place from where it is flowed down by gravity and that the Appellants had not indicated whether steam was no more being used by them. The learned Advocate, further, submitted that the appeal could have been decided by the Commissioner (Appeals) after personally visiting their factory or deputing the Range Suptd. to find out as to the fact whether they were using any power in the manufacture of soap or not; that such a dispute cannot be decided without inspecting the premises; that they had clearly mentioned in their reply to the show cause notice that the soap plant had been totally isolated from the vegetable product plant and this fact should have been verified by the Revenue by doing spot adjudication; that the decision of the Tribunal in their own case as reported in 1988 (35) E.L.T. 693 (Tribunal) is not applicable to the present case as at that relevant time they were using power in the manufacture of soap whereas in the present matter they have stopped using power from 23-8-1993.

3. Countering the arguments Shri Virag Gupta, learned D.R., referred to the specific finding of the Asstt. Commissioner in the Order-in-original wherein it has been mentioned that in the Appellants' factory steam is used in boiling soap stock and power is used in transferring the soap stock to the soap stock tanks; that no rebuttal has been made by the Appellants in this regard. He relied upon the decision of the Supreme Court in the case of CCE, Jaipur v. Rajasthan State Chemical Works, 1991 (55) E.L.T. 444 (S.C) wherein it has been held that if operation in the course of manufacture is so integrally connected with the further operation which results in the emergence of manufactured goods and such operation is carried out on with the aid of power, the process in or in relation the manufacture must be deemed to be one carried on with the aid of power; that in the said judgment pumping of the brine into the salt pans or the lifting of coke and limestone with the aid of power was treated as using power in the manufacture of finished product.

4. We have considered the submissions of both the sides. Notification No. 29/69 (sic) as amended exempts goods in or in relation to the manufacture of which no process has been carried on with the aid of power or steam for heating. As emphasized by the learned D.R. there is no rebuttal by the Appellants of the findings contained in the Adjudication Order to the effect that steam is used in boiling soap stock and power in transferring the soap stock to the soap stock pans.

The Appellants have only emphasized that they are mixing raw material in the soap section without using any power and heating is done by firewood and other refuse. They have nowhere controverted the finding of the Adjudicating Authority that steam is not used in boiling soap stock. In view of this the Appellants have not succeeded in establishing the compliance with the condition specified in Notification No. 28/64. The onus of proof is on the Appellants that they had complied with the condition of the Notification. They have not successfully discharged their onus of proof. We, therefore, reject their appeal.