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"Some good may. be produced partly by machine and partly by hand: (i.e. a dress made up by hand from machine made cloth, perhaps with additional hand embroidery or other decora- tions) . .. in such cases a product should be regarded as hand-made or handicrafts if the essential character of the product in its finished form is derived from the 'hand made' aspect of its production."

In the Import Policy of 1984-85, handicrafts and agar- baties and dhoop figured under a Heading apart from handi- crafts and stated that dhoop and agarbaties had been listed under traditional item in Appendix 17 at Serial No. V under Group Heading "Toiletry and Perfumery" while the handicrafts had been given separately in that Policy and this envisaged the handicraft to be manufactured by hand. General Note I against the entry 'Handicrafts' in the Policy Book stated as follows:

"Occupation of making by hand usable products graced with visual appeal. Handicrafts encom- pass activities that require a broad range of skills and equipment, including needle work, lace-making, weaving printed textile, decoration, basketry, pot- tery, ornamental metal working, jewelling, leather working, wood working, glassblowing, and the making of stained glass."

It was found by the Tribunal that raw materials were mixed by hand and the first essential procedure in the manufacture of dhoop etc., is kneading of the raw materials and the next essential stage is the formation of the dhoop into sticks or coils. Both these processes were carried out by the aid of power. Only cutting of the sticks to the desired length was stated to be by hand. It was not the case of the appellant that the formation of the dhoop sticks or coils, etc., there had been use of the skill of the human hand to give the dhoop its essential character. But the Tribunal found that it was difficult to accept that these were handicrafts merely because some authorities have chosen to treat agarbaties as handicrafts. Therefore, the Tribunal agreed with the Collector that these were not handicrafts. In that view of the matter, the Tribunal upheld the order of the Collector on this point and held that these were dutia- ble. In view of the evidence examined by the Tribunal and in the light of the well settled principle and the background of the definition of handicrafts, it appears to us that the Tribunal was right in coming to the conclusion that only a very small portion of required work was done by hand. The main part of the manufacture of agarbaties, etc. was done with the aid of power. It was the machine that produced predominantly the end product. In that view of the matter, we are of the opinion that the Tribunal was right in holding that agarbaties were not handicrafts. In coming to the aforesaid conclusion the tribunal had considered all rele- vant materials and records and applied the correct princi- ples of law. These findings of the tribunal on this aspect are unassailable. In the premises, when the appeal was filed and came up before this Court for hearing on 2nd March, 1989, on examination of these materials, this Court was satisfied that this contention of the appellant cannot be accepted and agarbaties were not handicrafts. It was, howev- er, further held by the Tribunal that the revenue was enti- tled to levy tax for a period of five years prior to the issue of show-cause notice and not six months pursuant to rule 9(2) of the Central Excise Rules. The relevant portion of rule 9(2) provides as follows: