Use of power in bleaching and dyeing must be proved on remand; unverified allegations cannot defeat exemption.

Where a remand specifically requires verification of whether bleaching and dyeing were done with the aid of power or steam, the department must complete that factual inquiry and cannot rely on unverified assertions or shift the burden to the assessee. The Tribunal noted that electricity records were not checked, the directed investigation was not completed, and contemporaneous evidence such as the hand-driven machine invoice, factory layout, fuel purchases, and affidavit material was not properly considered. On the material accepted, the processes were not shown to have used power in the alleged manner, so denial of exemption and the consequential duty and penalty could not stand; the prolonged, deficient adjudication also justified setting aside the order.

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Issues: (i) Whether the bleaching and dyeing processes were carried out with the aid of power or steam so as to deny the assessees the benefit of the exemption notifications and sustain the duty demand and penalty; (ii) Whether the adjudicating authority had complied with the remand directions and whether the prolonged adjudication, together with the evidence on record, justified interference with the impugned order.

Issue (i): Whether the bleaching and dyeing processes were carried out with the aid of power or steam so as to deny the assessees the benefit of the exemption notifications and sustain the duty demand and penalty.

Analysis: The remand required specific verification on the use of the boiler and the alleged use of power. The record showed that the department did not carry out the directed investigation, nor did it verify the electricity records although that was the obvious means to test the allegation. The assessee's evidence, including the invoice showing a hand-driven washing machine, the factory layout, fuel purchase documents, and supporting affidavit evidence, was not properly considered. On the material accepted by the Tribunal, the processes were not shown to have been carried out with the aid of power in the manner alleged by the department.

Conclusion: The finding of use of power or steam was not sustained, and the exemption denial and consequential duty and penalty could not stand.

Issue (ii): Whether the adjudicating authority had complied with the remand directions and whether the prolonged adjudication, together with the evidence on record, justified interference with the impugned order.

Analysis: The matter had already been remanded for specific factual verification, yet the directions were not complied with in substance. The adjudication was delayed for years, and the authority shifted the burden to the assessee instead of completing the directed inquiry. This failure to carry out the remand, coupled with the unexplained delay, weakened the basis of the impugned order and supported acceptance of the assessees' version.

Conclusion: The remand was not properly carried out, and the prolonged, deficient adjudication warranted setting aside the order.

Final Conclusion: The duty demand, confiscation-related appropriation, and penalty were set aside, and the appeal succeeded.

Ratio Decidendi: Where a remand directs specific factual verification on the use of power, the department must complete that inquiry and cannot rely on unverified assertions or shift the burden to the assessee; if the contemporaneous evidence supports non-use of power, exemption and consequential demands cannot be sustained.

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