Exemption option under Notification No. 9/98-C.E. could be filed later, with clearances counted for slab computation.

Notification No. 9/98-C.E. was construed as permitting a declaration opting for the exemption to be filed after 2-6-98, because the notification did not require the option to be exercised before the first clearance. The written option operated from the date it was exercised and continued for the remainder of the financial year. Clearances made before the option was filed were still relevant for slab computation, and there was no bar on claiming the benefit after the notification came into force. On that basis, the assessee was held entitled to the exemption and denial of the notification benefit was unsustainable.

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Issues: Whether the benefit of Notification No. 9/98-C.E. dated 2-6-98 was available to the assessee where the declaration opting for the notification was filed after the notification came into force, and whether the condition requiring exercise of option before the first clearance barred the benefit.

Analysis: The notification did not prohibit filing of the declaration after 2-6-98. The relevant condition only required that, once the option was exercised in writing, it would operate from the date of exercise and remain effective for the rest of the financial year. The assessee had already been clearing goods on tariff duty and, after supersession of Notification No. 38/97-C.E. and introduction of Notification No. 9/98-C.E., opted for the new exemption by filing the declaration in October 1998. The value of clearances already made was to be counted for the slab computation, and the notification contained no bar against such later exercise of option.

Conclusion: The assessee was entitled to the benefit of Notification No. 9/98-C.E. and the denial of exemption was unsustainable.

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