Restored excise exemption for DGTD-registered units applied where clearance limits were met, defeating the duty demand.

A DGTD-registered unit's eligibility for excise exemption turned on the interaction between the original exemption notification, the amendment withdrawing benefit for such units, and the later restoring notification. Notification No. 174/89 restored exemption to units that had availed it during 1986-87, provided the aggregate value of clearances for the relevant later years stayed within the prescribed limit. On the stated facts, those conditions were satisfied, so the restored exemption applied and the duty demand was not sustainable.

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Issues: Whether the assessee, a DGTD-registered unit, became entitled to the benefit of the exemption notification after the amendment withdrawing the benefit, and whether the demand of duty was sustainable in view of the later restoring notification.

Analysis: The assessee had validly availed the exemption under Notification No. 175/86 dated 01.03.1986 until the amendment brought by Notification No. 244/87 dated 30.10.1987 excluded units registered with DGTD. Notification No. 174/89 dated 01.09.1989 restored the benefit to such units if they had availed the exemption during 1986-87 and if the aggregate value of clearances for the relevant subsequent years did not exceed the prescribed limit. The factual requirements for availing the restored benefit were found to be satisfied, and the notification was treated as applicable for determining eligibility on the basis of the specified earlier financial years.

Conclusion: The assessee was entitled to the exemption benefit under Notification No. 174/89 dated 01.09.1989, and the demand of duty was not sustainable.

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