Exemption notification ceiling applied on aggregate first clearances, so one product's limit did not cancel benefit for other goods.

Notification No. 175/86-C.E. was interpreted as allowing exemption for specified goods until the aggregate ceiling for first clearances is reached, even where a manufacturer produces more than one item under different tariff headings. Exhaustion of the limit for one product does not automatically deny exemption to other specified goods, and the clearances are not to be clubbed so as to forfeit the benefit prematurely. The Tribunal followed its earlier interpretation of the notification and applied the exemption by reference to the overall ceiling rather than product-wise exhaustion alone.

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Issues: Whether the benefit of Notification No. 175/86-C.E. dated 01.03.1986 was to be computed separately for each product falling under different tariff headings up to the prescribed limit, or whether the clearances of the products had to be clubbed for applying the overall exemption ceiling.

Analysis: The Tribunal held that the issue was governed by its earlier decision interpreting the same notification. On that interpretation, where a manufacturer produces specified goods under more than one heading, the fact that the limit for one item is exceeded does not deny exemption to the other goods so long as the overall ceiling for first clearances has not been crossed. The notification was read as permitting exemption until the aggregate ceiling is reached, rather than requiring immediate denial of exemption to all goods once the limit for one item is exhausted.

Conclusion: The exemption was to be applied with reference to the aggregate ceiling for first clearances, and not by clubbing the two items so as to deny the benefit to the other goods prematurely. The appeal was allowed in favour of the assessee.

Ratio Decidendi: Under the notification, exhaustion of the exemption limit for one specified product does not automatically forfeit exemption for other specified goods until the overall ceiling for first clearances is reached.

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