Use of power for raw material transfer into storage does not defeat soap classification under the power-free manufacturing heading.

Use of power only to pump caustic soda lye from tanker lorries into storage, before the manufacturing process commenced, did not amount to use of power in or in relation to the manufacture of toilet soap. The manufacturing stages that converted the raw materials into soap were carried on without power or steam, so the product remained classifiable under Heading 3401.12 rather than Heading 3401.19. The ruling distinguished cases where power was used in an integral manufacturing stage, and held that a preliminary transfer of raw material into storage does not defeat the claimed classification benefit.

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Issues: Whether the appellant's toilet soap was classifiable under Heading 3401.12 as soap manufactured without the aid of power or steam, or under Heading 3401.19 on the footing that power was used in relation to its manufacture.

Analysis: The decisive question was whether the use of a diesel generating set to pump caustic soda lye from tanker lorries into the assessee's storage tank amounted to use of power in, or in relation to, the manufacture of soap. The transportation of the raw material up to the storage tank was treated as a preliminary supply activity undertaken by the raw material supplier and not as part of the actual conversion of raw materials into soap. The subsequent manufacturing stages were admittedly carried on without power or steam. The reasoning in the cited decisions was distinguished: where power was used to move raw material into a manufacturing stage that was integral to the process, exemption was denied, but that principle did not apply where power was used only for transferring raw material into storage before manufacture commenced.

Conclusion: The product was held classifiable under Heading 3401.12, and the use of power for pumping raw material into storage did not disqualify the assessee from the benefit claimed.

Ratio Decidendi: Use of power only for transferring raw material into storage, before the manufacturing process begins, does not amount to use of power in, or in relation to, the manufacture of the finished product.

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