Coir product exemption upheld for rubberised mattresses and cushions based on test results and industry classification

Rubberised coir mattresses and cushions were treated as exempt goods under Notification No. 115/75-C.E. because the notification covered products manufactured in factories within the scheduled coir industry, and the Board's circular clarified that rubberised coir mattresses with about 55% coir fell within coir products under Section 3(d) of the Coir Industry Act, 1953. The chemical test report showing 55.5% coir content and 33.8% latex content supported exemption, while the alleged change in manufacturing process was unsupported by evidence. The departmental chemical engineer's opinion was rejected because he had not inspected the factory or samples, and banking or departmental filings alone could not sustain the demand, penalty, or confiscation.

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Issues: Whether rubberised coir mattresses and cushions manufactured by the appellants were entitled to exemption under Notification No. 115/75-C.E.

Analysis: The notification grants exemption to goods manufactured in factories covered by the industries specified in the schedule, including coir industry. The Board's circular clarified that rubberised coir mattresses containing about 55% coir fall within coir products under the definition in Section 3(d) of the Coir Industry Act, 1953. The chemical test report showed coir content of 55.5% and latex content of 33.8%, supporting the claim to exemption. The finding based on a supposed change in manufacturing process was unsupported by evidence. The opinion of the departmental chemical engineer was discarded because he had not inspected the factory or the samples, and documents filed with bankers and the Industries Department could not alone sustain the demand.

Conclusion: The goods were eligible for exemption under Notification No. 115/75-C.E., and the demand, penalty, and confiscation were unsustainable.

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