Exemption under Notification No. 1/93-C.E. counted only from the opt-in date; earlier clearances were excluded.

Under Notification No. 1/93-C.E., the exemption was available only from 20-5-1994, when the relevant goods became covered and the assessee could legally opt for the benefit. Clearances made before that opt-in date were not to be counted for computing the exemption slab, because they were outside the period in which the notification could operate for the assessee. Following the binding High Court view, the value of earlier duty-paid clearances was excluded from the aggregate clearances for the financial year, and the exemption limit had to be worked out from the date the assessee elected to avail the notification.

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Issues: Whether the benefit of Notification No. 1/93-C.E. dated 28-2-1993, as amended, was available to the assessees only from 20-5-1994 and whether the value of clearances for the exemption limit had to be computed from the date on which the assessees opted for the exemption in the relevant financial year.

Analysis: The goods in question were brought within the scope of the notification as specified goods only from 25-4-1994, and the entitlement to the exemption was further affected by the shift from Rule 56A proforma credit to Modvat availability from 20-5-1994. The governing precedent held that clearances made before the assessee could legally avail the exemption were not to be counted against the exemption slab, and that the benefit of the notification became practically available only when the assessee opted for it in the financial year. Following the binding High Court view, the earlier duty-paid clearances prior to the opt-in date were not includible for computing the exemption limit.

Conclusion: The notification benefit was available only from 20-5-1994, and the value of clearances was to be computed from the date on which the assessees opted for the exemption. The issue is answered in favour of the assessees.

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