Gas heating in soap manufacture is not use of power, and extended limitation fails without suppression.

Gas used for heating in soap manufacture was treated as not amounting to use of power for excise purposes, because the departmental clarification on that expression prevailed over a contrary reading drawn from an unrelated statute. On the limitation issue, the extended period could not be invoked where the record did not show suppression of facts or contumacious conduct intended to evade duty. The demand, penalties, and connected adverse findings were therefore set aside, with consequential relief.

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Issues: (i) Whether the use of gas for heating in the manufacture of soap amounts to use of power so as to attract excise duty. (ii) Whether the extended period of limitation was invokable on the basis of suppression or contumacious conduct.

Issue (i): Whether the use of gas for heating in the manufacture of soap amounts to use of power so as to attract excise duty.

Analysis: The materials relied upon showed that the Central Board had clarified that use of gas for heating does not amount to use of power. The interpretation adopted by the adjudicating authority was found to be contrary to that clarification and was based on the definition of power in a different enactment, which was not a cognate statute for the purpose of the excise dispute. The accepted meaning of the expression, read in the relevant excise context, did not support the conclusion that gas heating was use of power.

Conclusion: The issue was answered in favour of the appellants and against the Revenue.

Issue (ii): Whether the extended period of limitation was invokable on the basis of suppression or contumacious conduct.

Analysis: On the facts, no material showed suppression of facts or any contumacious conduct intended to evade duty. In the absence of such ingredients, the preconditions for applying the extended limitation period were not satisfied.

Conclusion: The extended period of limitation was held to be unavailable to the Revenue.

Final Conclusion: The demand, penalties, and connected adverse findings were set aside and the appeals were allowed with consequential benefits in accordance with law.

Ratio Decidendi: Where the departmental circular clarifies the meaning of an expression used in excise classification or liability, and the facts do not disclose suppression, the authority must follow that clarification and cannot invoke the extended limitation period on a contrary interpretation drawn from an unrelated statute.

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