Rubber sheet exemption applies where compounded rubber is rolled into sheet form and input-credit conditions are met.

A compounded rubber product rolled into a sheet-like form was treated as a rubber product in the form of sheets for exemption under Serial No. 3 of Notification No. 18/95-C.E., because the manufacturing process produced a material matching that description. The condition that no Modvat credit under Rule 57A of the Central Excise Rules, 1944 had been taken on inputs used in manufacture was also satisfied. On that basis, the exemption was admissible and the duty demand and penalty were unsustainable; the impugned order was set aside and the appeal allowed.

---

---

Issues: Whether the product "VINOPRENE", a compounded rubber material rolled into a sheet-like form, was entitled to exemption under Serial No. 3 of Notification No. 18/95-C.E. as a rubber product in the form of sheets, and whether the penalty and duty demand could be sustained.

Analysis: The product was found to be made by mixing and compounding rubber with other ingredients and then passing the lump through a roll mill to obtain a sheet-like form. The description in Serial No. 3 covered rubber products in the form of plates, sheets and strips, and the material produced by rolling answered that description. The condition attached to the notification, namely that no Modvat credit under Rule 57A of the Central Excise Rules, 1944 had been availed on inputs used in the manufacture of the final product, was also satisfied.

Conclusion: The exemption was admissible to the product in dispute, and the duty demand and penalty were not sustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed.

Ratio Decidendi: A product obtained by rolling compounded rubber into sheet form falls within a notification entry covering rubber products in the form of sheets, where the prescribed condition against availing input credit is also fulfilled.

---