ORDER
V.P. Gulati, Member (T)
1. The issue in the appeal relates to the benefit of Notification 46/89 in respect of use of minor oils etc. in the manufacture of soap. The benefit of notification is available subject to fulfilment of certain conditions set out under the notification. What has been held against the appellants in the learned lower authority’s order is that condition No. 2 of the notification, has not been fulfilled.
2. The learned Advocate for the appellants has reiterated the pleas which he made at the time of personal hearing before the authority below which are reproduced below for convenience of reference :
“Dr. Jois, the learned Counsel for the petitioner submitted that the petitioner has been manufacturing and clearing soap in different forms such as bars, noodles, cakes, etc. The classification list filed by the petitioner has been accepted and approved by the Department as soap in any form under Tariff Heading 3401.10 of the Central Excise Tariff Act, 1985, the petitioner, therefore, become eligible to the benefit of Notification No. 46/89 dated 11-10-1989 issued under Rule 57K of the Central Excise Rules, 1944 which is popularly known as Cash Credit Scheme in respect of minor oils used in the manufacture of soap. It was submitted that the petitioner is using minor oils which is not disputed. The only ground on which the benefit of the notification has been denied to the petitioner under the impugned order is that the petitioner is clearing the goods on payment of duty to certain job workers for further processing and the learned Counsel assailed the correctness of this view, not only on the wording of the notification but also on the accepted position of the approval of the petitioner’s classification classifying the goods as soap coming within the Tariff Heading 3401.10.”
He has further urged that the appellants’ goods have been cleared after being assessed as soap falling under Tariff Heading 3401.10 and the Department has realised duty in respect of the same as soap. The goods as manufactured by the appellants and as emerged in the hands of the appellants have to be considered only as soap in respect of which all processes relevant to the manufacture of soap can be taken to have been carried out. He has pleaded what is done outside the appellants’ factory in the hands of the buyers of the soap is neither the concern of the appellants nor that of the Department. All that is required to be satisfied is that the soap in the form it is known as soap and as held by the Department as soap should have been manufactured in the appellants’ factory, for levy of duty as soap under Tariff Heading 3401 which reads as soap in any form. He has pleaded it is not the case of the Revenue that what has been manufactured by the appellants was not soap. He has pleaded the Tribunal in the case of Ojas Corporation v. Collector of Central Excise reported in 1988 (35) E.L.T. 189 where the question was whether the power was used in or in relation to the manufacture of the soap as the soap emerged in bar form which was later on cut to sizes by use of power would not disentitled the assessee from the benefit of notification in respect of soap which was available in respect of soap manufactured without the aid of power. The inference he pleads drawn is that soap which is manufactured in the form of bars, noodles etc. which may have to be cut further subsequently is nothing but only soap, for that reason he has pleaded once it is held that the soap had been manufactured in the appellants’ factory the condition No. 2 has to be taken to be fulfilled.
3. The learned JDR for the Department has pleaded that no doubt the product manufactured by the appellants was assessed as soap and was allowed clearance after payment of duty as soap under Tariff Heading 3401.10 inasmuch as subsequently it was further processed outside the appellants’ factory by the buyers to form it into smaller sizes of soap for marketing purposes would go to show that all processes for the manufacture of soap as required under condition No. 2 of the notification have not been satisfied. He has pleaded that the person who purchases these soaps from the appellants send after forming them into smaller cakes, bars and noodles for sale in the market. The plea is that the soap in the marketable form came to be manufactured in the hands of job workers and therefore condition No. 2 requiring all processes to be carried out in the assessee’s factory for the purpose of benefit of notification cannot be taken to have been carried out.
4. We have considered the pleas made by both the sides. We observe that the concession envisaged in the notification is to be allowed to the manufacturer who manufactures soap and clears the same from his factory as soap. In the present case it is not in dispute that the appellants manufacture bars and noodles of soap which they cleared from the factory after payment of duty under Tariff Heading 3401. It is therefore to be taken that the authorities were satisfied with what had been manufactured by the appellants and cleared from the factory was only soap. If that to be so the authorities cannot turn around and say that all processes required for manufacture of soap had not been carried out when they themselves have allowed clearance of the product from the factory as soap for the purpose of levy of Excise duty. In that view of the matter we find force-in the plea of the appellants. The case law cited by the appellants also supports the appellants’ plea that what had emerged as bars and noodles was only soap. The benefit of notification has to be made available so long as it is shown that the processes which gave rise to the product which answers to the description of soap have been carried out in the appellants’ factory. In the present case there is no dispute that the bars and noodles which emerged answer to the description of soap. We therefore hold that the appellants cannot be ruled out the benefit of notification for the reason that condition No. 2 had not been satisfied. We therefore allow the appeal of the appellants.