Chemi-mechanical pulp treated as mechanical wood pulp for exemption where technical evidence met the prescribed fibre-content threshold.

Chemi-mechanical pulp was treated as a recognised variation of mechanical wood pulp for exemption purposes under Notification No. 163/67-C.E., as amended. The Tribunal relied on the manufacturing process, chemical examiner's report, expert opinion and industry literature to hold that the paper contained not less than 50% mechanical wood pulp by weight of fibre content. It also found that the later tariff classification change and HSN notes could not narrow the exemption where the notification itself remained substantively unchanged. The Revenue's denial of the exemption was therefore unsustainable, and the newsprint qualified for the benefit.

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Issues: Whether newsprint manufactured from chemi-mechanical pulp qualified for exemption under Notification No. 163/67-C.E., as amended, on the footing that such pulp was a variation of mechanical wood pulp.

Analysis: The notification exempted paper containing mechanical wood pulp amounting to not less than 50% of the fibre content. The dispute turned on whether chemi-mechanical pulp could be treated as mechanical wood pulp after the change in tariff classification from 1-3-1986. The Tribunal examined the manufacturing process, the chemical examiner's test report, the expert opinion of the Central Pulp & Paper Research Institute, and industry literature. It found that chemi-mechanical pulp was a recognized variation of mechanical pulp, that the paper sample contained not less than 50% mechanical wood pulp by weight of fibre content, and that the Board's circular placing chemi-mechanical pulp outside the exemption was not persuasive in the face of the technical evidence. It further held that the change in tariff structure and HSN notes could not override the plain scope of the exemption notification when the notification itself had not changed in substance.

Conclusion: The newsprint manufactured by the appellant was entitled to the exemption, and the Revenue's denial of the benefit was unsustainable.

Ratio Decidendi: Where technical evidence and expert opinion show that chemi-mechanical pulp is a variation of mechanical pulp and the paper contains the prescribed proportion of mechanical wood pulp, an exemption notification referring to mechanical wood pulp must be construed to include such pulp unless the notification itself is amended to exclude it.

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