SSI exemption turnover computation and pat scrap excisability were remanded for fresh determination.

For SSI exemption computation, clearances already exempt or chargeable at nil duty, and brand-name clearances, were excluded from the preceding year turnover under the notification scheme, so the turnover had to be reworked before deciding eligibility for 1990-91. The Tribunal treated the earlier notification position as continuing until amendment and remanded the SSI claim for re-quantification of duty. On pat scrap arising during manufacture of aluminium circles, the record lacked a clear finding on excisability, so the issue was also remanded for fresh adjudication after hearing the parties and recording a specific duty-liability finding.

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Issues: (i) Whether the assessee was entitled to small scale industry exemption for 1990-91 by excluding clearances covered by exemption and brand-name based clearances in computing the preceding year turnover under the relevant notifications; (ii) Whether pat scrap arising during manufacture of aluminium circles was chargeable to excise duty.

Issue (i): Whether the assessee was entitled to small scale industry exemption for 1990-91 by excluding clearances covered by exemption and brand-name based clearances in computing the preceding year turnover under the relevant notifications.

Analysis: The exemption scheme required the aggregate value of clearances in the preceding year to be computed in the manner prescribed by the notification. Clearances falling under exemption or nil duty, and clearances of branded goods, were not to be counted for the threshold computation. The Tribunal also treated the prior position under Notification No. 180/1988-CE as continuing until the later amendment, so that the earlier clearances could not be used to deny the assessee the benefit for the subsequent year. On that basis, the turnover for the preceding year had to be reworked before deciding the SSI eligibility for 1990-91.

Conclusion: The assessee was held entitled to reconsideration of the SSI exemption claim, and the matter was remanded for re-quantification of duty for 1990-91.

Issue (ii): Whether pat scrap arising during manufacture of aluminium circles was chargeable to excise duty.

Analysis: The adjudicating authority had not recorded a clear finding on how duty liability arose on pat scrap. The Tribunal therefore declined to determine the issue on the existing record and directed fresh consideration after affording opportunity of hearing and recording a specific finding on duty liability.

Conclusion: The issue of duty on pat scrap was remanded for fresh adjudication.

Final Conclusion: The assessee obtained partial relief on the SSI exemption computation, but the duty demands were not finally set aside and both matters required further determination below.

Ratio Decidendi: For SSI threshold computation, clearances excluded by the notification scheme cannot be counted, and where the record is insufficient or no clear finding exists on excisability, the proper course is remand for fresh determination.

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