Exemption entitlement under Notification No. 101/66 could not be defeated by failing to challenge a non-final intimation.

Entitlement to exemption under Notification No. 101/66 had to be determined on the merits at adjudication because the earlier communication expressly stated that the final decision would be taken only then. The adjudicating authority accepted the test report showing that the principal ingredients were below 5% and dropped the demand; that finding was not rebutted on merits by the Revenue. The earlier letter was only an intimation and did not conclude the issue, so the claim to exemption was not barred by the absence of a separate challenge to that communication. The appellate order was set aside and the assessee obtained consequential relief.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 101/66 and whether failure to challenge the prior letter barred the claim to exemption.

Analysis: The revised classification list was filed to avail the exemption under Notification No. 101/66. The subsequent letter made it clear that the final decision would be taken only at adjudication. The adjudicating authority accepted the test report showing that the principal ingredients were less than 5% and dropped the demand. The Revenue did not controvert that finding on merits. The letter relied upon by the Revenue was only an intimation and did not conclude the issue, so no separate challenge to it was required.

Conclusion: The appellant was entitled to the benefit of Notification No. 101/66 and the objection based on non-challenge to the letter was rejected.

Final Conclusion: The impugned appellate order was set aside and the assessee succeeded with consequential relief.

Ratio Decidendi: Where an earlier communication expressly leaves the final decision to adjudication, entitlement to an exemption notification must be determined on the merits at adjudication and cannot be defeated solely for want of a separate challenge to that communication.

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