Plant design and actual use determine exemption eligibility for agro-residue pulping units under duty notification.

Entitlement to concessional duty under the exemption notification depended on whether the unit was a wood pulp plant or a plant designed for pulping agricultural residues. The Tribunal relied on investigation evidence showing that wood chips were not used in pulp manufacture and that their limited purchase was only for a boiler trial run, a fact not disputed. Applying the earlier decision on identical facts, it held that a plant must be judged by its design and actual use, and that mere capability of processing some wood-related material does not disqualify a unit otherwise meant for agro-residue pulping. The respondent was therefore entitled to the concessional rate of duty, and the Revenue's challenge failed.

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Issues: Whether the respondent was entitled to the concessional rate of duty under the relevant exemption notifications for the goods cleared during the disputed period.

Analysis: The disputed benefit turned on whether the respondent's plant was a wood pulp plant or a unit designed for pulping agricultural residues. The evidence recorded during investigation showed that wood chips were not used in the manufacture of pulp and that the limited purchase of wood chips was for a boiler trial run. That statement was not disputed. The Tribunal followed the earlier decision on identical facts, where it was held that a plant is to be judged by its design and actual use, and that mere capability of processing some wood-related material does not disqualify a unit otherwise meant for agro-residue pulping. On that basis, the respondent's case was treated as covered by the earlier reasoning.

Conclusion: The respondent was entitled to the concessional rate of duty under Entry No. 86A of Notification No. 6/2002-CE as amended, and the Revenue's challenge failed.

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