Power-assisted intermediate processing defeated exemption for tin containers manufactured from printed and lacquered sheets.

Tin containers made from printed and lacquered sheets were treated as manufactured with the aid of power because the sheets underwent an intermediate processing stage involving power before conversion into the final containers. The Court applied the settled test that processing must bring about a physical or visible change in the commodity, and found that the powered printing and lacquering stage formed part of manufacture in relation to the containers. As the exemption under Notification No. 94/70 was unavailable where no process in or in relation to manufacture was ordinarily carried on with the aid of power, the assessee could not claim the benefit and the demand and penalty were sustained.

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Issues: Whether tin containers manufactured from printed and lacquered sheets were manufactured with the aid of power so as to disentitle the assessee from exemption under Notification No. 94/70 dated May 1, 1970.

Analysis: Metal containers falling under Item 46 of the First Schedule to the Central Excises and Salt Act, 1944 were intended for packing goods and the assessee supplied containers made to the buyer's specification. The sheets used for the containers were printed and lacquered by another concern with the aid of power, and that stage formed part of the manufacture of the containers. Applying the settled test that processing requires some change in the commodity, the Court held that the sheets underwent a physical and visible change and that the use of power in that process was material. Since the notification denied exemption where no process in or in relation to manufacture was ordinarily carried on with the aid of power, the assessee could not claim the benefit.

Conclusion: The exemption was not available and the demand and penalty were sustained.

Ratio Decidendi: Where a material undergoes a change in an intermediate stage of manufacture and that stage is carried on with the aid of power, the resulting goods are treated as manufactured with the aid of power for the purpose of a power-based exemption notification.

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