Power used only for transferring raw materials is not manufacture use, so the exemption under the notification was upheld.

Use of power only for pumping raw materials or water from the motor tank to the storage tank does not amount to use of power in the manufacture of goods or in a process integral to manufacture for exemption under Notification No. 179/77-CE, as amended. The tribunal treated such transfer as a non-manufacturing activity and held that mere power-assisted movement of materials, without use in the manufacturing process itself, does not disqualify the assessee from the exemption. On that basis, the assessee remained eligible for the notification benefit and the revenue's appeal failed.

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Issues: Whether use of power only for pumping water and raw materials to the storage tank disqualifies the assessee from exemption under Notification No. 179/77-CE dated 18-6-1977 as amended by Notification No. 174/83-CE dated 1-3-1983.

Analysis: The exemption turned on whether power was used in the manufacture of the goods or in a process integral to manufacture. The tribunal followed the view that mere use of power for transferring raw materials from the motor tank to the storage tank does not amount to use of power in the process of manufacture, because such transfer is not itself a manufacturing process. Since the assessee was denied the exemption solely on that basis, the condition for disqualification was not satisfied.

Conclusion: The assessee was entitled to the exemption and the revenue's appeal failed.

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