Exemption notification threshold for binding agent upheld for oxide colour and dry distemper under the prescribed limit.

Exemption under Notification No. 114/73 was available to oxide colour because the department did not prove that the binding agent exceeded the prescribed 4% limit, so the notification could not be denied on unsupported assertion. The same notification was also available to dry distemper because the Tribunal applied earlier precedent treating mixtures with binding agent up to 4% by weight as within the proviso. The exemption was therefore upheld for both products, and the assessee's claim succeeded in full.

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Issues: (i) Whether the benefit of Notification No. 114/73 was available to oxide colour, and (ii) whether the benefit of Notification No. 114/73 was available to dry distemper.

Issue (i): Whether the benefit of Notification No. 114/73 was available to oxide colour.

Analysis: The exemption under Notification No. 114/73 was subject to the condition that the mixture should not contain binding agent or mineral oil exceeding 4% by weight. No evidence was brought on record to show that the oxide colour contained binding agent in excess of the prescribed limit. The departmental assertion was unsupported by proof.

Conclusion: The benefit of Notification No. 114/73 was available to oxide colour, in favour of the assessee.

Issue (ii): Whether the benefit of Notification No. 114/73 was available to dry distemper.

Analysis: The issue was governed by the earlier Tribunal decision recognising that the proviso to the notification permits the mixture to contain binding agent up to 4% by weight. Following that ratio, dry distemper was held to satisfy the notification condition.

Conclusion: The benefit of Notification No. 114/73 was available to dry distemper, in favour of the assessee.

Final Conclusion: The appellate claim succeeded in full, and the exemption benefit was upheld for both products.

Ratio Decidendi: Where an exemption notification excludes only mixtures containing binding agent beyond a specified percentage, the benefit cannot be denied unless the department proves breach of that threshold; precedent on the same notification governs identical questions.

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