Collector of Central Excise, Jaipur Vs. Rajasthan State Chemical Works, Deedwana, Rajasthan
EmailAppeal: Civil Appeals No.3593-94 of 1989.
Petitioner: Collector of Central Excise, Jaipur
Respondent: Rajasthan State Chemical Works, Deedwana, Rajasthan
Apeal: Civil Appeals No.3593-94 of 1989.
Judges: LALIT MOHAN SHARMA & P.B. SAWANT, JJ.
Date of Judgment: Dec 18, 1990
Head Note:
CENTRAL EXCISES AND SALT ACT, 1944:
Exemption
Exemption – Crude sodium sulphate produced as a residue in the manufacture of salt – Brine pumped into salt pans using electricity – Salt produced by natural evaporation of water – Sodium sulphate settling at bottom in the form of crust – Whether power can be said to have been used in relation to manufacture of sodium sulphate? – Case referred to a Bench of three Judges.
JUDGEMENT:
L.M. SHARMA, J. :
1. The respondents are engaged in manufacture of salt and crude sodium sulphate. They were served with notices demanding payment of excise duty on the clearance of crude sodium sulphate. The respondents resisted on the ground that crude sodium sulphate was the residue in the manufacture of salt and it was covered by a notification granting exemption to goods produced without the aid of power.
2. Admittedly brine is pumped from a well into salt pans by using electric power. In the salt pans salt is formed by the process of natural evaporation of water. During the course of formation of salt some quantity of sodium sulphate present in the brine also crystallises and settled at the bottom in the form of crust. After salt is removed from the pans the sodium sulphate lying at the bottom of the pans becomes available. The question is as to whether power can be said to have been used in relation to the manufacture of the chemical by reason of the fact that brine is pumped into the salt pans with the aid of electricity. By the impugned judgment the CEGAT, confirming the order of the Collector, agreed with the respondents holding that no power was used in the manufacture of crude sodium sulphate.
3. Reliance has been placed on behalf of the appellant on the decisions in the Union of India versus Delhi Cloth and General Mills: (1963) Supp. (I) SCR 586 and Standard Fireworks Industries Sivakasi and Another versus Collector of Central Excise, Madurai: 1987 (28) E.L.T. (S.C.) 56, in support of the argument that the movement of the brine from the well to the salt pans with the aid of power deprives the respondents of the benefits of the exemption notification. The learned counsel for the respondents has attempted to distinguish the cases by reference to the facts and has contended that mere use of power in transferring the raw materials cannot be said to be use of power in the process of manufacture of final product because it is not a process of manufacture. Reference has been made to the decision of the Gujarat High Court in Nirma Chemical Works and others versus Union of India and others: 1981 E.L.T. 617 (Guj).
4. After hearing the learned counsel for the parties, we are of the view that the case may be placed for hearing before a Bench of three Judges. Let the records be placed before the Hon’ble the Chief Justice for orders.
1. The respondents are engaged in manufacture of salt and crude sodium sulphate. They were served with notices demanding payment of excise duty on the clearance of crude sodium sulphate. The respondents resisted on the ground that crude sodium sulphate was the residue in the manufacture of salt and it was covered by a notification granting exemption to goods produced without the aid of power.
2. Admittedly brine is pumped from a well into salt pans by using electric power. In the salt pans salt is formed by the process of natural evaporation of water. During the course of formation of salt some quantity of sodium sulphate present in the brine also crystallises and settled at the bottom in the form of crust. After salt is removed from the pans the sodium sulphate lying at the bottom of the pans becomes available. The question is as to whether power can be said to have been used in relation to the manufacture of the chemical by reason of the fact that brine is pumped into the salt pans with the aid of electricity. By the impugned judgment the CEGAT, confirming the order of the Collector, agreed with the respondents holding that no power was used in the manufacture of crude sodium sulphate.
3. Reliance has been placed on behalf of the appellant on the decisions in the Union of India versus Delhi Cloth and General Mills: (1963) Supp. (I) SCR 586 and Standard Fireworks Industries Sivakasi and Another versus Collector of Central Excise, Madurai: 1987 (28) E.L.T. (S.C.) 56, in support of the argument that the movement of the brine from the well to the salt pans with the aid of power deprives the respondents of the benefits of the exemption notification. The learned counsel for the respondents has attempted to distinguish the cases by reference to the facts and has contended that mere use of power in transferring the raw materials cannot be said to be use of power in the process of manufacture of final product because it is not a process of manufacture. Reference has been made to the decision of the Gujarat High Court in Nirma Chemical Works and others versus Union of India and others: 1981 E.L.T. 617 (Guj).
4. After hearing the learned counsel for the parties, we are of the view that the case may be placed for hearing before a Bench of three Judges. Let the records be placed before the Hon’ble the Chief Justice for orders.
