Exemption for processed shawls upheld where goods were already ready to use and no further processing was required.

Processed shawls cleared as double-width goods were held to qualify for exemption under Notification No. 65/87 because the record showed no further stitching, hemming or whipping was needed before clearance. The shawls could be divided by a fringe into two equal-width shawls and were therefore already in a ready-to-use and marketable condition. The Revenue bore the burden of justifying denial of the exemption, but failed to show that additional processing was necessary. The exemption was therefore available to the respondents.

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Issues: Whether the respondents were entitled to the benefit of exemption under Notification No. 65/87 dated 1-3-1987 for the processed shawls cleared by them.

Analysis: The material on record did not show that the shawls processed by the respondents required any further stitching, hemming or whipping before clearance. The findings of the Commissioner (Appeals) were that the goods were processed as double-width shawls, divided by a fringe, and could be obtained as two shawls of equal width without further processing. The Revenue failed to establish that the goods were not in a ready-to-use condition or that additional processing was necessary to make them marketable. The burden to justify denial of the exemption lay on the Revenue, and that burden was not discharged.

Conclusion: The respondents were entitled to the exemption under Notification No. 65/87 dated 1-3-1987, and the Revenue's appeal failed.

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