Improper laboratory testing defeated exemption denial for henna products, leading to remand for fresh adjudication and re-testing.

Denial of exemption under Notification No. 12/12-CE, as amended, could not be sustained where eligibility depended on laboratory testing that was not carried out on a proper scientific basis. The Tribunal noted that the prescribed standard for henna powder was applied to henna paste, without comparison to a proper standard plant source, and that some re-testing supported the assessee's position. As the basic facts necessary to determine exemption eligibility were not established with certainty, the impugned orders were set aside and the matter was remanded for fresh adjudication with proper re-testing.

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Issues: Whether the denial of exemption under Notification No. 12/12-CE, Sl. No. 134, as amended by Notification No. 12/13-CE dated 01.03.2013, could be sustained when the laboratory testing of henna powder and henna paste was found to have been conducted by an improper method.

Analysis: The dispute turned on the nature of the product and the correctness of the testing process. The Tribunal noted that the chemical examination was not conducted on a proper scientific basis, as the standard prescribed for henna powder was applied to paste and the required comparison with a proper standard plant source was not carried out. It also noticed that re-testing in some cases supported the assessee's claim. In these circumstances, the basic facts necessary for deciding eligibility to exemption were not established with certainty.

Conclusion: The impugned orders were set aside and the matter was remanded to the Original Authority for fresh adjudication, including proper re-testing of the product.

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