Exported goods excluded from home-consumption clearances; deduction allowed only where export evidence proved 505 fare meters shipped.

Goods cleared for export and actually exported were not to be included in the aggregate value of clearances for home consumption under Notification No. 89/79-C.E., because actual export took them outside the home-consumption computation. The Tribunal followed earlier precedent and rejected the contention that such goods were deemed consumed in India merely because they were fitted to vehicles. On the evidence, clearances through another exporter were accepted as exported where supported by purchase orders, invoices, packing lists, shipping bills and customs certification, and deduction was allowed for 505 fare meters. The remaining clearance value was not fully excluded from the exemption computation.

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Issues: (i) Whether goods cleared for export and actually exported were liable to be included in the aggregate value of clearances for home consumption for the purpose of exemption under Notification No. 89/79-C.E.; (ii) Whether the clearances of fare meters through other exporters were to be treated as exported goods and therefore deductible from the value of home clearances.

Issue (i): Whether goods cleared for export and actually exported were liable to be included in the aggregate value of clearances for home consumption for the purpose of exemption under Notification No. 89/79-C.E.

Analysis: The notification granted exemption to small scale manufacturers and linked the ceiling to clearances for home consumption. Goods cleared for export and actually exported could not, on the facts found, be treated as clearances for home consumption. The earlier Tribunal view that actual export is sufficient and that such goods do not enter the home-consumption computation was followed. The argument that the goods were fitted to vehicles and thereby consumed within India was rejected in respect of the clearances that were proved to have been exported.

Conclusion: Goods actually exported were not includible in the home-consumption value for exemption computation and the assessee succeeded on this issue.

Issue (ii): Whether the clearances of fare meters through other exporters were to be treated as exported goods and therefore deductible from the value of home clearances.

Analysis: On the evidence, the clearances through Bajaj were supported by purchase orders, invoices, packing lists, shipping bills and customs certification showing export. The Department did not substantiate the allegation that those meters were fitted to vehicles and thus consumed domestically. In contrast, the API documentation contained a contradiction, and only the direct export clearances and the Bajaj clearances were accepted as exported for deduction purposes. The record supported deduction of 505 meters as exported goods.

Conclusion: The assessee was entitled to deduction of the value of 505 fare meters as exported goods, but not to complete relief in respect of all 528 meters.

Final Conclusion: The appeal was allowed only to the extent of the 505 fare meters held to have been exported, with consequential relief, and the remaining clearance value continued to be liable to inclusion for exemption computation.

Ratio Decidendi: Goods cleared for export and actually exported cannot be treated as clearances for home consumption when computing eligibility under an exemption notification.

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