Exemption for intermediate goods in coir industry units upheld for polyurethane foam sheets used in rubberised coir mattress manufacture.

Polyurethane foam sheets manufactured as an intermediate product in a rubberised coir mattress unit were treated as eligible for exemption under Notification No. 115/75-C.E. The Tribunal applied its earlier ratio that a factory manufacturing rubberised coir mattresses falls within the coir industry for the notification, and that the exemption extends to intermediate goods produced in such a covered factory unless expressly excluded. On that basis, the disputed goods were held entitled to the exemption, and the duty demand and penalty were set aside in favour of the assessee.

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Issues: Whether polyurethane foam sheets manufactured as an intermediate product in the manufacture of rubberised coir mattress were entitled to exemption under Notification No. 115/75-C.E. dated 30-4-1975.

Analysis: The factory manufacturing rubberised coir mattress was treated as a factory covered by the coir industry. The notification exempted goods manufactured in factories covered by the specified industries, other than the products expressly excluded, from the whole of the duty of excise leviable thereon. The Tribunal followed its earlier decision extending the same exemption to an intermediate product manufactured in a rubberised coir mattress unit, holding that the earlier ratio applied squarely to the present facts.

Conclusion: The goods in dispute were held entitled to exemption under Notification No. 115/75-C.E., and the demand and penalty were set aside in favour of the assessee.

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