Manual manufacture exemption for footwear cannot be denied merely because power-operated machinery is installed, absent proof of use.

Footwear claimed as hand-made remained eligible for exemption where the assessee produced supporting certificates showing manual manufacture and the Department failed to rebut them with positive evidence that power was used in production. The mere presence of power-operated machinery in the premises was insufficient, without proof that it was actually employed in making the footwear. On the evidence, the goods were accepted as manufactured without the aid of power, so the duty demand was not sustained.

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Issues: Whether the footwear manufactured by the assessee was manufactured with the aid of power and was, therefore, ineligible for exemption under Notification No. 49/86 dated 10-2-1986.

Analysis: The record showed that the assessee produced certificates from the buyer and from the Central Footwear Training Centre stating that the footwear was manually prepared and could be made only manually. The Department did not adduce material to rebut these certificates or to show that the machines found in the premises were being used in the manufacture of the footwear. The officers also did not find the footwear being manufactured with the aid of power during the visit. On the evidence, the finding that the goods were hand-made was accepted.

Conclusion: The footwear was held to have been manufactured without the aid of power, and the demand of duty was not sustained; the appeal was rejected against the assessee.

Ratio Decidendi: Where the assessee's evidence shows manual manufacture and the Department fails to rebut it with positive evidence of use of power, exemption conditioned on absence of power cannot be denied merely because power-operated machinery was found installed.

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