Exemption exclusion for goods compressed together upheld, while duty demand was remanded for cum-duty re-quantification.

Goods manufactured by bonding paper with HDPE fabric using liquid LDPE and then passing the product through rollers under pressure were treated as goods "compressed together in one or more operations" and therefore fell within the exclusion from concessional duty under the relevant exemption notifications. The denial of concessional duty under Notifications No. 20/94-C.E. and 18/95-C.E. was upheld. Where duty had been confirmed on the entire realisation, however, the duty demand had to be reworked after extending cum-duty benefit. The matter was remanded to the adjudicating authority solely for re-quantification of the demand on that basis.

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Issues: (i) whether stitched paper manufactured by bonding paper with HDPE fabric and passing the product through rollers under pressure was excluded from the concessional rate of duty under the exemption notifications as goods "compressed together in one or more operations"; (ii) whether the duty demand required re-quantification after granting cum-duty benefit.

Issue (i): whether stitched paper manufactured by bonding paper with HDPE fabric and passing the product through rollers under pressure was excluded from the concessional rate of duty under the exemption notifications as goods "compressed together in one or more operations".

Analysis: The product was found to be made by bonding paper and HDPE fabric with liquid LDPE and then passing it through rollers with pressure. On these facts, the product answered the description of goods compressed together in one or more operations, which was specifically excluded from the scope of the concessional notifications.

Conclusion: The denial of concessional duty under Notification No. 20/94-C.E. dated 01.03.1994 and Notification No. 18/95-C.E. dated 16.03.1995 was upheld and the finding was against the assessee.

Issue (ii): whether the duty demand required re-quantification after granting cum-duty benefit.

Analysis: Since the duty had been confirmed on the entire realisation, the demand had to be recomputed by extending the cum-duty benefit while working out the duty liability.

Conclusion: The matter was remanded to the original adjudicating authority for re-quantification of the demand after allowing cum-duty benefit, in favour of the assessee to that limited extent.

Final Conclusion: The exemption claim failed, but the demand was sent back only for recomputation of duty liability after giving cum-duty relief.

Ratio Decidendi: Goods bonded and passed through rollers under pressure are treated as compressed together for the purpose of an exemption exclusion clause, and duty must be reworked on a cum-duty basis where the demand is confirmed on gross realisation.

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