Exemption for scoured cotton fabrics upheld where no bleaching was proved and only specified processes were shown.

Exemption under Notification No. 40/95-C.E. could not be denied where cotton fabrics were only subjected to scouring and singeing, both being specified processes covered by the notification. A chemical report based on the assessee's letter and technical literature, and not on a proper test of the sample, lacked sufficient evidentiary value to prove bleaching. The factual finding that no bleaching process was carried out was therefore sustained, and the exemption benefit remained available to the assessee.

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Issues: Whether the respondents were entitled to exemption under Notification No. 40/95-C.E. for cotton fabrics cleared after scouring, or whether the process undertaken amounted to bleaching so as to deny the notification benefit.

Analysis: The disputed fabrics were subjected to scouring and singeing, both of which were specified processes under the notification. The chemical report relied upon by Revenue was not based on a specific test of the sample, but on the assessee's letter and technical literature. The report therefore lacked the evidentiary value of a proper test result and could not displace the factual finding that no bleaching process had been carried out. On examination of the process, the earlier authority found that only specified processes were undertaken and that the fabrics were not converted into bleached fabrics.

Conclusion: The respondents were entitled to the exemption under Notification No. 40/95-C.E.; the Revenue's objection that bleaching had been undertaken was rejected.

Final Conclusion: The exemption claim was upheld and the Revenue's appeal failed.

Ratio Decidendi: An exemption cannot be denied on the basis of an opinionated chemical report unsupported by a proper test, where the processing actually undertaken falls within the specified processes covered by the notification.

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