Plastic adhesive used only as a binder does not make sandwich paper fall within the exemption exclusion.

Sandwich paper made by bonding two paper layers with molten LDPE adhesive was held not to be a product of paper or paper board impregnated, coated or covered with plastics under Notification No. 49/87. The determining factor was that the plastic merely acted as a binder and did not saturate the paper or fill its interstices; therefore, the product did not answer the notification's exclusion clause. On that construction, the paper remained eligible for the exemption and the Revenue's objection failed.

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Issues: Whether sandwich paper manufactured by the respondents was excluded from the benefit of Notification No. 49/87 dated 1-3-1987 as a product consisting of sheets of paper or paper board impregnated, coated or covered with plastics compressed together in one or more operations.

Analysis: The lower authorities had found that the product was neither impregnated, nor coated, nor covered with plastics. The evidence showed that two layers of paper were merely stuck together by using LDPE plastic as an adhesive. The expression "impregnated" requires the medium to saturate or fill the interstices of the paper, which was not the case here. The molten LDPE was used only to bind the two layers together and did not bring the product within the excluded category in the notification.

Conclusion: The product did not fall within the exclusion in Notification No. 49/87 and remained eligible for the exemption; the Revenue's appeal was rejected.

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