Electricity consumption alone cannot prove manufacture with power when documentary evidence supports exemption entitlement.

Electricity consumption figures alone were treated as insufficient to prove use of power in manufacturing tin containers when there was no reliable evidence of actual operation of electric motors or monthly motor-wise consumption data. Documentary invoices showing sale of the motors in May 2001 and repurchase in December 2002 were not controverted by examining the relevant parties, so the allegation of manufacture with the aid of power was not established and the exemption benefit was maintained; the demand, interest and penalties were stated not to survive.

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Issues: Whether the Revenue could deny exemption and sustain demand by relying only on electricity consumption figures to allege use of power in manufacture of tin containers, and whether the assessee had established manufacture without the aid of power.

Analysis: The demand was founded on comparison of electricity consumption during different periods, without any reliable material showing actual use of electric motors in production or any monthly motor-wise consumption data. Electricity usage, by itself, was held incapable of proving use of power in the factory, particularly when other electrical appliances could also account for consumption. The assessee, on the other hand, produced invoices evidencing sale of the motors in May 2001 and re-purchase in December 2002, and the Revenue did not controvert those documents by examining the concerned parties.

Conclusion: The allegation of manufacture with the aid of power was not proved and the assessee remained entitled to the exemption benefit. The Revenue's appeal was rejected.

Final Conclusion: The order of the Commissioner (Appeals) was sustained and the demand, interest, and penalties did not survive.

Ratio Decidendi: Electricity consumption figures, without independent corroboration of actual use of power-driven machinery, are insufficient to displace documentary evidence showing manufacture without the aid of power and entitlement to exemption.

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