Excise exemption turned on power use in manufacture, and processes done with power outside the factory defeated refund eligibility.

The exemption under Notification No. 179/77 applied only where, in relation to manufacture of the goods, no process was ordinarily carried on with the aid of power. Cutting steel wires and shredding or conditioning paper were part of the manufacture of the fireworks, and those processes were carried on with the aid of power, even though outside the factory. The reference to "manufactured in a factory" in Tariff Item 68 did not control the exemption claim, because the notification's own condition was determinative. The appellants therefore fell outside the notification and could not claim refund of excise duty.

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Issues: Whether the appellants were entitled to refund of excise duty under Notification No. 179/77 dated 18-6-1977 when certain processes in relation to manufacture, namely cutting of steel wires and shredding or conditioning of paper, were carried on with the aid of power outside the factory.

Analysis: The exemption notification granted relief only where, in relation to the manufacture of the goods, no process was ordinarily carried on with the aid of power. The relevant processes for preparing the fireworks were part of the manufacture of the goods, and it was undisputed that those processes were performed with the aid of power, though outside the appellants' factory. The presence of the words "manufactured in a factory" in Tariff Item 68 did not assist the appellants, because the controlling requirement was the condition imposed by the notification itself.

Conclusion: The appellants were not covered by the exemption notification and were not entitled to refund.

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