Manufacture without power test governs exemption where ancillary power use does not defeat eligibility.

For exemption clauses requiring manufacture without the aid of power, the decisive test is whether the goods are produced without power; incidental power use in ancillary operations does not disqualify the product if the manufacturing process itself remains non-power driven. The note applies this principle to ferro alloys made by the alumino thermic or thermit process, indicating that use of power in preparatory or handling stages does not defeat exemption where the process of manufacture is otherwise without power. It follows the earlier Tribunal view on the same notification and process.

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Issues: Whether ferro alloys manufactured by the alumino thermic or thermit process were entitled to exemption under Notification No. 209/83-C.E. when some power was used in ancillary stages of manufacture.

Analysis: The exemption applied to ferro alloys manufactured without the aid of power by the specified process. The controlling consideration was whether the goods themselves were produced without the aid of power. Use of power in preparatory or ancillary operations, such as mixing or handling equipment, did not by itself remove the product from the exemption where the manufacturing process of the ferro alloys remained non-power driven. The earlier Tribunal view on the same notification and process was followed.

Conclusion: The exemption was available and the denial of benefit was not sustainable.

Final Conclusion: The appeal succeeded and the assessee was held entitled to the exemption benefit on the footing that incidental or ancillary use of power did not defeat manufacture without the aid of power.

Ratio Decidendi: For exemption clauses turning on manufacture without the aid of power, the decisive test is whether the goods are themselves manufactured without power, and incidental use of power in ancillary operations does not disqualify the goods from the exemption.

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