Small scale exemption eligibility upheld where prior year clearances, including branded goods, stayed within the prescribed limit.

Small scale exemption under the notification depended on whether the aggregate clearances in the preceding financial year stayed within the prescribed threshold. The dispute was whether branded goods cleared on payment of duty had to be added to the prior year's turnover for eligibility. On the Revenue's own verification report, inclusion of those clearances still left the preceding year's total below the limit, so the eligibility condition was satisfied. The assessee was therefore entitled to the exemption, and denial of the notification benefit was unsustainable.

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Issues: Whether the appellant was entitled to the benefit of the small scale exemption notification for the subsequent financial year, in view of the Revenue's objection that the preceding year's clearances had crossed the prescribed limit.

Analysis: The notification granted exemption subject to satisfaction of the eligibility condition that the aggregate clearances in the preceding financial year should not exceed the prescribed threshold. The dispute turned on whether the value of branded goods cleared on payment of duty had to be included in the previous year's turnover for this purpose. On the Revenue's own verification report, even after taking the branded goods clearances into account, the total clearances for the preceding year did not cross the prescribed limit. The eligibility condition therefore stood satisfied.

Conclusion: The appellant was entitled to the benefit of the exemption notification and the denial of exemption was unsustainable.

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