Page 242 - ELT_2nd_15th April 2020_Vol 372_Part

288 EXCISE LAW TIMES [ Vol. 372

Notification No. 3/2005, dated 24-2-2005. As such, Central Excise duty
amounting to Rs. 9,32,35,179/- and Education Cess amounting to Rs.
8,08,054/- not paid by the party on the clearance of ‘Doctor’ brand ‘Laun-
dry Soaps’ for the period January, 2002 to February, 2006 is recoverable
from the party.
22. The contention of the Appellant that the extended period of limita-
tion could not have been invoked was repelled. Regarding the imposition of
penalty upon Shri Anoop Kumar, Authorized Signatory, the Commissioner
found that he controlled the day to day functioning of the unit and as such was
supposed to know that goods manufactured with the aid of power were subject-
ed to levy of duty. Likewise, penalty was also imposed upon Shri Anil Kumar
Jain, Factory Manager and Shri Mahendra Kumar Jain, Managing Director.
23. It is this order dated 15 November, 2006 passed by the Commis-
sioner that has been challenged in this appeal.
24. Shri B.L. Narasimhan, Learned Counsel appearing for the Appel-
lant has made the following submissions :
(i) The use of the gas for heating and boiling does not amount to use of
‘power’ and hence the product manufactured by the Appellant
could not have been subjected to levy of excise duty under Tariff
Subheading No. 3401.12 prior to 28 February, 2005. After 28 Febru-
ary, 2005 also, Central Excise Duty could not have been levied un-
der Tariff Item No. 3401 19 42 because of the exemption Notification
dated 24 February, 2005 that came into effect from 28 February,
2005;
(ii) Admittedly, the expression ‘power’ has not been defined either un-
der the Tariff Act or under the relevant notification but the meaning
of the expression has to be understood in the context the expression
has been used for the purpose of the Tariff Item and the Exemption
Notification and not by applying the definition of the expression
given in some other enactment or in dictionaries;
(iii) The expression ‘power’ used in the Tariff Item and the Exemption
Notification would cover only ‘electricity’ within its purview as the
purpose of the exemption notification is to encourage manufacture
of items without the use of electricity. This exemption has been in-
voked right from 1964 when ‘soap’ was for the first time subjected
to levy of excise duty and thus, so long as electricity has not been
used in the manufacturing process, the exemption would continue
to be available. This view is fortified by the two Circulars dated 22
March, 1968 and 29 March, 1968 issued by the Central Board of Ex-
cise & Customs in the context of identical worded notifications
granting exemption to some other products which were manufac-
tured without the aid of ‘power’;
(iv) If ‘power’ is understood and interpreted to include any form of en-
ergy, then steam also would get covered by the expression ‘power’
and so reference to steam separately in the Tariff Act and Exemp-
tion Notification becomes redundant. Therefore, in order to obviate
this redundancy it is absolutely necessary to interpret the term
‘power’ in a restricted manner to mean ‘electricity’ only;
EXCISE LAW TIMES  15th April 2020  258