Aggregate value computation under exemption notifications turns on whether waste and scrap fall within the notification's own exemption structure.

Waste and scrap arising from manufacture of goods already covered by Notification No. 1/93-C.E. formed part of the exemption scheme and their value had to be counted in the aggregate value limit, even if duty was paid on clearance. Waste and scrap generated in job-work manufacture under Notification No. 214/86-C.E. were expressly permitted to be cleared on payment of duty or returned to the principal manufacturer, and Notification No. 1/93-C.E. contained no basis to include them in its aggregate value computation. The duty calculation was therefore to be redetermined by including the first category and excluding the second.

---

---

Issues: (i) Whether the value of waste and scrap generated in the manufacture of specified goods cleared under Notification No. 1/93-C.E. was includible in the aggregate value limit for that notification; (ii) Whether the value of waste and scrap generated in the manufacture of goods cleared under Notification No. 214/86-C.E. was includible in the aggregate value limit for Notification No. 1/93-C.E.

Issue (i): Whether the value of waste and scrap generated in the manufacture of specified goods cleared under Notification No. 1/93-C.E. was includible in the aggregate value limit for that notification.

Analysis: Waste and scrap arising from the manufacture of goods already covered by Notification No. 1/93-C.E. were themselves specified goods under that notification. Their exemption, subject to the aggregate value limit, meant that the goods were part of the exemption scheme. Actual payment of duty on such clearances did not change their character or exclude them from the computation of the first-clearance value limit.

Conclusion: The value of waste and scrap of this category was includible in the aggregate value limit of Rs. 30 lakhs under Notification No. 1/93-C.E.

Issue (ii): Whether the value of waste and scrap generated in the manufacture of goods cleared under Notification No. 214/86-C.E. was includible in the aggregate value limit for Notification No. 1/93-C.E.

Analysis: Waste and scrap arising from job-work manufacture under Notification No. 214/86-C.E. were expressly permitted to be cleared on payment of duty or returned to the principal manufacturer. Notification No. 1/93-C.E. contained no provision attracting this category of waste and scrap into the computation of the aggregate value of first clearances. Such clearances were therefore outside the reckoning for the Rs. 30 lakhs limit.

Conclusion: The value of waste and scrap of this category was not includible in the aggregate value limit under Notification No. 1/93-C.E.

Final Conclusion: The duty computation was required to be redetermined by including the first category of waste and scrap and excluding the second category, with the appeals disposed of by modifying the lower order to that extent.

Ratio Decidendi: Where an exemption notification contains no provision bringing a separately cleared category of goods within the aggregate value computation, only those clearances that fall within the notification's own exemption structure can be counted for the limit.

---