Mechanical pulp exemption for mill board upheld where non-wood raw materials and one-third additive limit were satisfied.

Mill board made from straw and jute cuttings, first converted into mechanical pulp, was treated as eligible for exemption under Notification No. 70/76 because the notification covered straw board and mill board subject to defined conditions. The Tribunal found no evidence that mechanical pulp was confined to wood pulp alone, and accepted that non-wood raw materials could also yield mechanical pulp. It further held that the proviso allowing addition of other materials up to one-third by weight applied to mill board as well as straw board, and the use in question remained within that limit. On that basis, the exemption was available.

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Issues: Whether mill board manufactured using straw and jute cuttings, first converted into mechanical pulp, was eligible for the benefit of Notification No. 70/76, and whether the proviso permitting addition of other materials up to one-third by weight applied to mill board.

Analysis: The notification exempted straw board and mill board subject to the stated definition and conditions. The respondents' case was that straw and jute were mechanically processed into pulp and then used in manufacture, and there was no evidence from the Revenue to disprove that the pulp so obtained was not mechanical pulp. The materials placed before the Tribunal indicated that mechanical pulp could be produced from non-wood raw materials as well, and the Revenue did not establish that mechanical pulp was confined to wood pulp alone. The Tribunal also accepted that the proviso in the notification permitting use of other materials up to one-third by weight was applicable to mill board as well as straw board, as held by the Allahabad High Court, and the respondents' use remained within that limit.

Conclusion: The mill board was entitled to the benefit of the exemption notification; the Department's appeal was without merit.

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