Chemical formulation exemption cannot be denied when evidence supports duty-free input use and retesting is inconclusive.

Exemption under Notification No. 276/67 could not be denied where the available evidence showed that the final product was a chemical formulation manufactured from inputs received without payment of duty. The tribunal relied on the technical opinion from IIT Delhi, invoices describing the goods as a chemical solution, and the contemporaneous show-cause notice treating them as an industrial chemical formulation. Retesting of the sample was inconclusive because the sample had deteriorated with age, so the existing record was sufficient to support the classification and the exemption claim.

---

---

Issues: Whether the appellant was entitled to the benefit of Notification No. 276/67 dated 21-12-67 for the product manufactured from inputs received without payment of duty.

Analysis: The product was treated as a chemical solution or chemical formulation on the basis of the available material, including the technical opinion from IIT Delhi, the invoices describing the product as a chemical solution, and the contemporaneous show-cause notice referring to the goods as chemical formulation for industrial purposes. Since the sample could not be conclusively retested because it had deteriorated with age, the available evidence supported the finding that the final product was a chemical formulation manufactured from duty-free inputs.

Conclusion: The appellant was entitled to the benefit of the exemption notification.

Ratio Decidendi: Where the evidence shows that the final product is a chemical formulation manufactured from inputs received without payment of duty, exemption under the relevant notification cannot be denied on an inconclusive retest of a deteriorated sample.

---