Aluminium utensils with non-stick coating remained exempt because their essential character as aluminium utensils was unchanged.

Aluminium utensils coated on the inner surface with a non-stick layer continued to qualify as "utensils made of aluminium" under Notification No. 234/82. The coating did not alter the essential character of the goods or displace their identity as aluminium utensils, and the exemption did not require the utensils to be made exclusively of aluminium unless the notification expressly so provided. On that basis, the coated utensils remained exempt from central excise duty, and the exemption in favour of the assessee was upheld.

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Issues: Whether aluminium utensils coated with non-stick material continue to qualify as "utensils made of aluminium" under Notification No. 234/82 and remain exempt from central excise duty.

Analysis: The utensils were admittedly made of aluminium and the non-stick coating was applied only on the inner surface. The coating did not change the essential character of the goods or take away their identity as aluminium utensils. An exemption notification referring to utensils made of aluminium does not require that the goods be made exclusively or entirely of aluminium unless the notification expressly says so. The interpretation adopted was consistent with the principle that the governing material remains decisive where the essential character is unchanged.

Conclusion: The coated utensils continued to be utensils made of aluminium and remained eligible for exemption. The issue was decided in favour of the assessee and against the Revenue.

Final Conclusion: The Revenue appeal failed and the order granting exemption was upheld.

Ratio Decidendi: Where the essential character of exempted goods remains unchanged, a superficial coating or ancillary material does not disqualify the goods from an exemption meant for articles made of the underlying material.

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