Exemption eligibility under paper pulp notification turns on Revenue proof of excluded materials in the qualifying pulp.

Exemption under Notification No. 138/1986-C.E. depended on paper or paperboards being made from pulp containing at least 50% by weight of pulp from materials other than bamboo, hard woods, soft woods, reeds or rags. The Revenue had to prove that the disqualifying portion of the pulp was made from the excluded materials; that burden was not discharged. A mere reference to imported wood pulp was insufficient, because its composition was not examined or shown to fall within the excluded categories. The exemption benefit was therefore available to the assessee.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 138/1986-C.E. despite using imported wood pulp, and whether the Revenue had proved that more than 50% of the pulp used was made from the excluded materials specified in the notification.

Analysis: The notification granted concessional duty where paper and paperboards were manufactured out of pulp containing not less than 50% by weight of pulp made from materials other than bamboo, hard woods, soft woods, reeds or rags. The decisive requirement was not merely that the assessee used non-exempt pulp, but that the Revenue had to establish that the disqualifying portion of pulp was made from the excluded materials. No such allegation or proof was brought on record. The mere description of one component as imported wood pulp did not by itself show that it was made from the listed materials, and the constitution of that pulp was not examined.

Conclusion: The assessee was entitled to the exemption benefit and the Revenue failed to dislodge that entitlement.

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