Jute bag exemption applies where HDPE tapes do not alter the essential character of poly jute bags.

Poly jute bags woven with jute yarn and HDPE tapes remained within the scope of the jute-bag exemption, because the notification used the phrase "made of" without requiring the goods to be wholly, only, or exclusively jute. Classification of the fabric and bags was not in dispute; the decisive point was that the addition of polymer material did not change their essential character as jute bags. Applying the Calcutta High Court's reasoning on poly-lined jute bags, the text treats the exemption as available where jute remains the dominant material. The assessee was therefore entitled to the concessional rate under Notification No. 65/87-C.E.

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Issues: Whether poly jute bags woven with jute yarn and HDPE tapes were entitled to the concessional rate under Notification No. 65/87-C.E. as sacks and bags of jute.

Analysis: The classification of the fabric and the bags was not in dispute. The dispute turned on the scope of the exemption notification and whether the presence of HDPE tapes took the goods out of the category of jute bags. The notification did not use expressions such as "wholly", "only" or "exclusively". The goods were made from fabric classified as jute fabric, and the use of polymer material along with jute did not justify treating the bags as non-jute bags. The reasoning adopted in the Calcutta High Court decision on poly-lined jute bags was applied, because the essential principle was that the phrase "made of" does not mean made exclusively of jute.

Conclusion: The bags remained jute bags for the purpose of the exemption, and the assessee was entitled to the benefit of Notification No. 65/87-C.E.

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