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<h1>Exemption Notification: No Duty on Soap Chips Made Without Power</h1> The SC upheld respondent's argument that duty cannot be claimed on soap chips made without power, as per Exemption Notification. No evidence of power use ... Exemption from excise duty for manufacture without aid of power or steam for heating - manufacture with the aid of power - scope and interpretation of Exemption Notification No. 28 of 1964 - incidence of excise duty on subsequent processing (soap chips) in the same factoryExemption from excise duty for manufacture without aid of power or steam for heating - manufacture with the aid of power - incidence of excise duty on subsequent processing (soap chips) in the same factory - Whether excise duty could be levied on soap chips manufactured after completion of nonpower soap manufacture where the chips were produced using a powerdriven machine but there was no use of power or steam for heating. - HELD THAT: - The Court examined Exemption Notification No. 28 of 1964 and held that the exemption applies unless a process in the manufacture is carried on with the aid of power or of steam for heating. Even if the production of soap chips is treated as a manufacture of soap, duty can attach only if the manufacturing process employed the aid of power or steam for heating. In the present case there was no evidence that power or steam was used for heating in the production of soap chips; the mere use of a powerdriven machine for converting trimmings into chips did not satisfy the statutory condition for attracting duty under the notification. Consequently the demand for duty on the chips could not be sustained. [Paras 2, 3]Demand for excise duty on soap chips dismissed for lack of evidence that power or steam was used for heating; exemption notification applies.Final Conclusion: Appeal dismissed; the excise demand in respect of soap chips could not be sustained because the exemption in Notification No. 28 of 1964 applies where no process involving the aid of power or steam for heating is shown to have been used. The Supreme Court upheld the respondent's contention that no duty can be claimed on soap chips made without the use of power. The Exemption Notification exempts soap manufacture without power from duty. The Court found no evidence of power use in making soap chips, thus dismissing the appeal with no costs.
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