Exemption under one notification denied, but unchallenged exemption under another preserved duty-free clearance and defeated the demand.

Straight blended oils fell outside Notification No. 287/86-CE because that exemption covered only preparations made by blending or compounding mineral oils with other oils or substances for industrial use other than as lubricant, so relief under that notification was unavailable. However, the products had also been held to fall within Notification No. 120/84-CE, which exempted blended or compounded lubricating oils and greases, and that finding was not challenged by the Revenue. The demand therefore could not be sustained, because the independent and unassailed exemption continued to protect the goods from duty.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 287/86-CE in respect of the two products described as straight blends, and whether the Revenue could succeed in demanding duty when the finding that Notification No. 120/84-CE applied to the products remained unchallenged.

Analysis: The notification governing speciality oils exempted only those preparations made by blending or compounding mineral oils with other oils or any other substance, intended for industrial use other than as lubricant. Straight blended oils were therefore outside the scope of that exemption. On the facts, the two products in question were straight blends and could not claim relief under Notification No. 287/86-CE. However, the appellate order had also held that the products were covered by Notification No. 120/84-CE, which exempted blended or compounded lubricating oils and greases without the additional restriction found in the later notification. The Revenue's appeal did not assail that separate finding.

Conclusion: The assessee was not entitled to exemption under Notification No. 287/86-CE, but the demand still could not be sustained because the unchallenged applicability of Notification No. 120/84-CE preserved the duty-free clearance.

Final Conclusion: The appeal failed as the Revenue did not dislodge the independent basis on which the products were held exempt, so the demand was not revived.

Ratio Decidendi: Where an exemption under one notification is denied, the demand cannot be sustained if an independent and unchallenged exemption under another applicable notification continues to cover the goods.

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