1990 INSC 0730
                                        Collector of Central Excise, Jaipur

                                                           Vs

                           Rajasthan State Chemical Works, Deedwana, Rajasthan

                                       Civil Appeal Nos. 3593-94 of 1989

                                         (L. M. Sharma, P. B. Sawant JJ)

                                                      18.12.1990

                                                        ORDER

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 percent in the brine also crystallises and settles 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 v.
Delhi Cloth and General Mills [1963 Supp 1 SCR 586 : AIR 1963 SC 791] and Standard Fireworks
Industries, Sivakasi v. CCE [(1987) 1 SCC 600 : 1987 SCC (Tax) 138 : (1987) 28 ELT 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 v. Union of
India [1981 ELT 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.

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