SSI exemption slab computation must include dutiable turnover; exemption eligibility was remanded for fresh determination.

Dutiable turnover under Heading 39.20 had to be included in computing the small scale industry exemption slab, because it could not be excluded merely on the ground that no duty demand was raised for it on limitation grounds. Exemption eligibility had to be determined on the merits, with the consequential slab calculation following that finding. The matter was remanded to the original authority for fresh consideration of exemption eligibility and related slab computation, along with the connected issue, and the parties were permitted to raise other relevant points.

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Issues: Whether the clearance value of goods classified under Heading 39.20 of the Central Excise Tariff Act, 1985 was to be included while computing the slab limit for small scale industry exemption, and whether the matter required remand for redetermination of eligibility to exemption.

Analysis: The disputed clearances were dutiable and specified goods, and the absence of a demand under Heading 39.20 did not justify excluding their turnover from the exemption slab computation. At the same time, the question of eligibility of the goods to exemption under the relevant notification was already the subject of remand in the connected appeal, and the present appeal depended on that determination. The proper course was therefore to set aside the order and remand the matter to the original authority for reconsideration along with the connected issue, while permitting the parties to urge other relevant points.

Conclusion: The turnover under Heading 39.20 was to be taken into account for SSI slab computation, and the matter was remanded for fresh determination of exemption eligibility and consequential slab calculation.

Final Conclusion: The impugned order was set aside and the dispute was sent back for reconsideration on the exemption and slab-limit questions.

Ratio Decidendi: Dutiable turnover cannot be excluded from SSI slab computation merely because no duty demand can be raised for it on limitation grounds; the exemption eligibility must be determined on the merits and consequential turnover computed accordingly.

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