1998 (11) TMI 256

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....he plant, the officers found that a 3 hp. electric motor was connected with mercerising machine with arrangements to activate the motor. On the assumption that textiles were made with the aid of power, the officers seized the finished textiles. In his statement the Director of Company stated that they were using power only for lifting water from the well to the tank; that they were manufacturing textiles without the aid of power and the mercerising machine was Connected with the motor because it had jammed and power was being used to free it. It was, further, claimed that the machine was very light and could not be operated with power at all. The statement of an employee, namely, M.A. Misra was also recorded in which he denied that the mach....

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....r and the contractor have all maintained that all times the process was manual and that the motor was attached only to attempt to free the machine which had jammed. The department has attempted to show that the machine was run by the electricity by stating the chain, which was meant for manual operation, was rusted whereas the chain meant to connect the machine with the motor was in the oiled state. We do not think of this piece or corroboration very highly. If the machine is attached to the motor for a specific purpose, it is to be expected that the chain would be well oiled. We find the claim that the ambient pollution made the chain rusty during the 5 Diwali holidays to be a little farfetched but hold that it is not conclusive or even co....

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....capable of running the machine. Such sweeping conclusions cannot stand logical scrutiny. 7. We have been the Supreme Court judgment cited by the Collector in his order which deals with Section 123 of the Customs Act and does not even remotely relate to the case on hand. Shri Willingdon Christian, ld. Advocate relied upon the Supreme Court judgment in the case of Containers Corporation reported in 1986 (24) E.L.T. 173 (S.C.) = 1987 (13) ECC 57 (S.C.). In this case the court was dealing with an identical situation where a motor was attached to a machine which was in jammed condition for the purpose of de-jamming it. In that case, the evidence advanced by the department was in the form of utilisation of power. The Supreme Court observe....