Factory-wise base clearance under exemption notification cannot be clubbed unless the scheme expressly permits aggregation.

An exemption notification that fixed base period and base clearances by reference to each factory required duty to be computed factory-wise. Because the notification placed factories in different categories with distinct commencement dates and separate formulas for calculating base clearance, their individually determined clearances could not be clubbed into one manufacturer-wide figure. Aggregation would unlawfully alter the applicable base period and distort the exemption scheme. The amending notification did not authorise such clubbing or affect the analysis. The impugned orders were therefore unsustainable, and duty had to be recomputed separately for each factory with consequential refund of duty recovered wrongly.

---

---

Issues: Whether, under Notification No. 198/76-C.E., the base clearances of factories falling in different categories could be clubbed to arrive at a single base clearance for the manufacturer, thereby altering the base period applicable to each factory.

Analysis: The notification fixed base period and base clearances with reference to a factory. It recognised different categories of factories depending on when clearances first commenced, and prescribed different methods for computing base clearances for each category. The first three factories and the fourth factory fell in different categories and had different base periods and different formulas for determining base clearance. Nothing in the notification authorised the addition of the separately determined base clearances of different categories to produce one combined figure for the manufacturer. Such clubbing would distort the statutory scheme by interchanging base periods and changing the basis on which each factory's entitlement was to be determined. The amending Notification No. 271/76-C.E. did not justify the clubbing and had no material bearing on the controversy.

Conclusion: The base clearances of the factories could not be clubbed together, and each factory's duty liability had to be determined separately under the applicable category.

Final Conclusion: The impugned orders were unsustainable, and the assessee was entitled to have the duty computed on a factory-wise basis with consequential refund of duty recovered wrongly.

Ratio Decidendi: Where an exemption notification prescribes factory-wise categories and distinct formulas for computing base clearance, separately determined base clearances cannot be aggregated unless the notification expressly authorises such clubbing.

---