SSI exemption threshold excludes duty-paid clearances of specified goods from the aggregate value of exempted clearances.

Where SSI exemption is linked to the value of clearances of specified goods, duty-paid clearances of the same goods are not to be included in the aggregate value of exempted clearances for computing the exemption threshold. The Tribunal in the cited CESTAT Ahmedabad matter treated this position as settled and held that submersible pumps on which duty had become payable were not countable with exempted clearances for the first-clearance limit. On that basis, the demand and penalty were unsustainable.

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Issues: Whether duty-paid clearances of submersible pumps were required to be included while computing the aggregate value of exempted clearances for the purpose of the SSI exemption limit.

Analysis: The dispute turned on whether the clearances of pumps on which duty had become payable from 1-3-2002 could be added to the exempted clearances while working out the first clearance limit for the relevant exemption. The Tribunal accepted that the legal position on this point stood settled and that, for computing the exemption limit, duty-paid clearances of the pumps were not to be counted along with the exempted goods.

Conclusion: The duty-paid clearances were not required to be taken into consideration while computing the clearance value of exempted goods, and the demand and penalty were unsustainable.

Ratio Decidendi: Where an exemption is linked to the value of clearances of specified goods, duty-paid clearances of those goods are not to be added to the exempted clearances for computing the exemption threshold.

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