Limited use of power for cooling does not make manufacture power-driven, preserving exemption for rosin and turpentine oil

Limited use of power for pumping water to an overhead tank in an ancillary cooling arrangement did not make the manufacture of rosin and turpentine oil one carried on with the aid of power, because the manufacturing process itself used no direct power. A departmental clarification on the same product treated such water pumping as insufficient to attract the power-based restriction, and that beneficial circular bound the Revenue. The assessee was therefore entitled to the exemption, and the contrary classification and denial of nil rate of duty were set aside.

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Issues: Whether the manufacture of rosin and turpentine oil could be treated as manufacture with the aid of power merely because water was pumped to an overhead tank by electric motor, and whether the assessee was entitled to the exemption claimed.

Analysis: The process of manufacture showed that the raw material was heated and the products were separated without direct use of power in the manufacturing operations themselves. The only power-assisted activity was pumping water to an overhead tank for cooling in the condenser. The departmental TRU clarification on the same product and notification stated that such limited use of power for drawing water into the cooling arrangement would not make manufacture one carried on with the aid of power. That clarification was treated as binding on the Department and was applied in favour of the assessee.

Conclusion: The use of power for pumping water did not amount to manufacture with the aid of power. The assessee was entitled to the exemption, and the contrary classification and denial of nil rate of duty were set aside.

Ratio Decidendi: Limited use of power for an ancillary cooling operation does not constitute manufacture with the aid of power where the manufacturing process itself is otherwise carried on without such aid, and a beneficial departmental circular on the same issue binds the Revenue.

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