Unassembled supply of wet cells was not treated as manufacture of complete goods; exemption also failed because power was used in components.

Supply of A.D. wet cells in unassembled or knocked-down form was not treated as manufacture of complete cells where the record showed that only carbon and zinc elements were made in-house and the remaining parts were bought out and dispatched without assembly. On those facts, the view that an unassembled supply amounted to manufacture of the finished article was rejected, so duty on the alleged complete cells could not stand. Exemption under Notification No. 179/77 was also denied because power was used in manufacturing essential components of the cells, meaning the goods could not qualify as products not ordinarily produced with the aid of power.

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Issues: Whether supply of A.D. wet cells in unassembled or completely knocked-down condition amounted to manufacture of complete cells exigible to duty under the relevant tariff item, and whether the exemption for goods not ordinarily produced with the aid of power was available.

Analysis: The decisive question was whether the appellant itself manufactured complete cells or merely manufactured carbon and zinc elements and supplied the remaining bought-out components in unassembled form. The record showed that the appellant manufactured only the carbon and zinc elements, procured the remaining parts from the market, and dispatched the goods to the Railways without assembling the complete cells in its factory or at the buyer's premises. The view that an unassembled supply was equivalent to manufacture of the complete article was rejected on the facts. The claim for exemption under Notification No. 179/77 also failed because power was used in the manufacture of essential components forming part of the cell, so it could not be said that no process was ordinarily carried on with the aid of power in relation to the manufacture of the cells.

Conclusion: The appellant did not manufacture complete A.D. wet cells, and the demand of duty on the unassembled cells could not stand.

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