Commercial understanding of glycerine's classification required fresh evidence before exemption under the oil mill and solvent extraction notification could be decided.

Glycerine recovered from castor oil by hydrolysis and splitting in a separate plant was considered for exemption under Notification No. 115/75-C.E. as a product of the oil mill and solvent extraction industry. The governing issue was whether the goods were commercially understood as falling within that industry's scope. The majority held that the lower authorities had not examined the trade and industry understanding of glycerine and that the factual record was incomplete. The exemption claim was therefore not finally determined on merits, and the matter was remanded for de novo reconsideration on proper commercial evidence.

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Issues: Whether glycerine manufactured from castor oil was entitled to exemption under Notification No. 115/75-C.E. as a product of oil mill and solvent extraction industry, and whether the matter required de novo reconsideration on the basis of commercial understanding of the goods.

Analysis: The notification exempted goods manufactured in factories covered by the industries specified in the Schedule, and the relevant entry was oil mill and solvent extraction industry. The competing views turned on whether glycerine recovered from castor oil by hydrolysis and splitting in a separate plant was commercially understood as a product of that industry. The majority found that the lower authorities had not examined how glycerine was regarded in trade and industry, and that the issue could not be finally decided without proper commercial evidence. Since the factual foundation was incomplete, the impugned order could not stand and the matter had to be reconsidered afresh.

Conclusion: The question of exemption was not finally determined on merits, and the case was remanded for de novo consideration.

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