Exemption for dry distemper with glue below the prescribed limit reaffirmed under the binding-agent test.

Dry distemper was treated as eligible for exemption under Notification No. 114/73-C.E. where glue was used only as a binding agent and the content did not exceed 4% by weight. The notification had already been construed to allow the exemption in that situation, and the Department did not rebut the assessee's factual assertion on glue content. Earlier decisions on the same question were followed, confirming that a binding agent below the prescribed limit does not defeat exemption.

---

---

Issues: Whether dry distemper was entitled to exemption under Notification No. 114/73-C.E. where glue was present as a binding agent below 4% by weight.

Analysis: The exemption notification had already been construed to permit the benefit where glue was present only as a binding agent to the extent of less than 4% by weight. The Department did not rebut the assessee's factual claim that the glue content in the product did not exceed that limit. The earlier decisions on the same issue were followed.

Conclusion: The product was held eligible for the exemption, and the assessee succeeded on this issue.

Ratio Decidendi: Where an exemption notification disqualifies only mixtures containing a binding agent above the prescribed limit, the presence of glue as a binding agent below that limit does not defeat the exemption.

---