Bone product exemption depends on principal raw material, not physical appearance, so ossein and gelatine qualified.

Ossein and gelatine manufactured from crushed bones with chemical treatment were treated as bone products for exemption under Notification No. 221/79-CE. The Tribunal held that the decisive test is the principal raw material from which the goods emerge, not whether the finished products retain the visible physical characteristics of bones. It relied on its earlier view that di-calcium phosphate derived from bones could also qualify as a bone product. On that basis, the exemption was upheld and the departmental appeal failed.

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Issues: Whether Ossein and Gelatine manufactured from crushed bones by treatment with chemicals are "bone products" eligible for exemption under Notification No. 221/79-CE dated 30.6.79.

Analysis: The Tribunal held that the expression "product" must be understood with reference to the principal raw material from which the goods emerge. Since the admitted raw material for both Ossein and Gelatine was crushed bones, the goods retained their character as bone products for the purpose of the exemption notification. The Tribunal also found support in its earlier view that Di-calcium phosphate derived from bones had been treated as a bone product eligible for the same notification, and declined to accept the contention that the goods must retain the visible physical characteristics of bones.

Conclusion: Ossein and Gelatine were held to be bone products eligible for exemption under Notification No. 221/79-CE dated 30.6.79, in favour of the assessee.

Final Conclusion: The departmental appeal failed and the exemption benefit claimed by the respondent was upheld.

Ratio Decidendi: For exemption as a bone product, the decisive consideration is the principal raw material from which the goods are manufactured, not whether the final goods retain the physical appearance of bones.

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